Tuesday, August 10, 2010

Foster care finance reform: NAPCWA offers a plan that fears the future

While we don't know if Bryan Samuels, the Commissioner of the Administration for Children Youth and Families really will turn out to be a champion of genuine child welfare finance reform, we know who is chickening out, big-time: the National Association of Public Child Welfare Administrators, the trade association for the people who run state and local government child protective services agencies.

NAPCWA has made public its plan for child welfare finance "reform." And while the reasons may be different, my guess is a lot of people in Congress are going to react to the plan the same way I did: They can't be serious. Indeed, they may not be serious. The plan is so unrealistic and so likely to be Dead on Arrival on Capitol Hill that I have to wonder if a lot of people in NAPCWA simply want to show they tried before pushing for straight "delinking" – something I'll explain below - and nothing more.

The only good news in the document is that NAPCWA calls for restoring the authority of the Department of Health and Human Services to issue waivers like the one that has done so much to improve child welfare in Florida. Other than that, the plan is worthless.

But it's not the fact that this plan is bad policy, with the potential to actually make incentives worse, that is likely to kill it. It's the fact that it is not cost-neutral; not even close. And if I can figure that out, so can the Congressional Budget Office.

In reading this plan, I was struck by how distant it is from a vision President Obama articulated when he signed the health care law. At that time, he said: "We do not fear the future, we shape the future."
In contrast, the plan for child welfare finance reform released by NAPCWA is a plan that suggests NAPCWA is so fearful of the future that it won't even try to shape it. In the process it puts at risk the futures of thousands of vulnerable children.

As with so much in child welfare practice, this plan belies the rhetoric about keeping families together being the first goal of the system. What the plan really says is: We will continue to do business as usual, and, if we get lucky and save a little by reducing foster care, we'll put some of that spare change into keeping families together. And because we so fear the future, because we don't really believe our own rhetoric about the success and the value of prevention, we insist on maintaining our addiction to the open-ended entitlement of foster care.
Not only would this plan do little or nothing to change the incentives that promote foster care, if this change is accompanied by "delinking," it actually could make things worse.

And what is this grand plan? Essentially it all boils down to this:

  • Keep the open-ended entitlement under which states are reimbursed for a large share of the cost of holding children in foster care – with no comparable entitlement for better alternatives.
  • If a state nevertheless manages to reduce foster care, let the state, in effect, pretend it's still taking away just as many children as ever and use the savings for alternatives, including prevention, family preservation and adoption. It's even possible, though not clear from the plan, that some of the savings could be plowed right back into foster care.
  • But if foster care goes up, states would continue to receive reimbursement for every child taken away. And it would be every child, not just every "eligible child" because the other key component of the plan is --

  • "delinking," the Holy Grail of the foster care-industrial complex. Under delinking the proportion of children whose cases are eligible for federal aid would roughly double, and the gradual erosion of the proportion of cases eligible for aid – the one tiny financial incentive that runs against shoveling ever more children into foster care – would end. (This is not what makes the plan so costly – NAPCWA admits that to get delinking it would have to cut the amount reimbursed per child. It's the part about keeping the entitlement that risks big cost increases, as is discussed below).


    In every possible way, the incentives in child welfare favor foster care: The personal incentives for everyone from the frontline caseworker to the child welfare agency chief, favor it, the political incentives favor it and the financial incentives favor it. Even if one argues that this plan neutralizes the financial incentives – and I don't think it does - it doesn't change the other incentives. So there will be no serious push to reduce foster care. More important, when the going gets tough – when the local newspaper suddenly discovers that a state or county has a child welfare agency and sometimes children known to that agency die - there is no incentive to resist foster-care panic – because, under this plan, the state or county still gets a huge share of foster care costs reimbursed.

    Los Angeles County is a good example. As has been noted often on this Blog, the Los Angeles Times has been running lots of stories about deaths of children known-to-the-system and, initially, scapegoating efforts to keep families together. (There's been a change in direction on the spin lately, but it's too little, too late.) The Los Angeles County child welfare agency director claimed there was no foster-care panic. But when she reneged on a promise to provide the actual numbers, NCCPR filed a California Public Records Act to get them.

    The data show there is a foster-care panic in Los Angeles County. However, the panic is not nearly as bad as other places have endured under nearly-identical circumstances. That almost certainly is because Los Angeles County accepted a Florida-style waiver limiting its foster care funding from the federal government. So, to the extent that there is a foster-care panic in Los Angeles County, Los Angeles County actually has to pay for it.

    In contrast, under the NAPCWA plan, Los Angeles wouldn't have to pay more than under the status quo for the rest of the nation and, for reasons I'll get to below, might actually pay a little less.

    A ceiling on foster care expenditures is essential to stiffen the spines of many child welfare leaders and most elected officials, in the face of newspaper crusades and other pressure to "take the child and run."

                Even more frightening is the possibility that, were this plan enacted in it's entirely, the incentives in a time of foster-care panic could get worse.

    Again, consider the Los Angeles example:

    Because of the waiver, Los Angeles County has to pay the full cost of its current foster-care panic.
    If Los Angeles County were like most of America today, in contrast, it would be reimbursed for a sizable share of the cost of additional placements caused by foster care panic (or any other cause) – but only for "eligible" children.
    Under the NAPCWA plan, Los Angeles actually would be reimbursed for part of the cost of every child wrongfully placed in foster care because of a foster-care panic. (Although the proportion of federal aid per case would be lower, the fine print about something called "claiming rates" appears to mean that, in fact, Los Angeles, and everyplace else, actually would get more. And, of course the gradual reduction in the proportion of cases eligible for reimbursement would end).
    Thus, the NAPCWA plan actually encourages foster-care panic even more than the status quo.


    Although NAPCWA says this plan is cost neutral, it isn't. As noted above, I am not referring to delinking – I understand that the idea is to make delinking itself close to cost-neutral, by lowering the reimbursement per case. The increased costs come about in a different way:

    Under the status quo, the federal government pays more when foster care entries go up, but saves money when they come down.
    Under waivers like Florida's the federal government doesn't pay less when foster care entries go down, but it doesn't pay more either, aside from a small annual increase negotiated with the state to account for inflation. And, of course, it doesn't pay more when entries rise.

    The federal government, and all taxpayers, also reap huge savings in other areas, like running criminal justice systems (especially jails), paying unemployment compensation and public assistance, and maintaining adult psychiatric centers, since reducing needless foster care also reduces the terrible outcomes that plague so many former foster children.
    But under the NAPCWA plan, the federal government would continue to pay more when entries increase but achieve no direct savings when numbers go down.

    Consider two hypothetical states. Each state had 100,000 "foster care days" for eligible children last year (number of children in foster care at any point in the year multiplied by the number of days they were there), for a total of 200,000 days in all. Let's also assume that, in each of these hypothetical states, the federal government pays an average of $100 per foster care day. Total cost to the federal government: $10 million per state, $20 million in all.

    Now, let's suppose in the following year, one state cuts 10,000 foster care days while the other adds 10,000 foster care days. The total cost remains the same, because what the federal government loses in one state it saves in the other.

    But under the NAPCWA plan, the federal government has to pay for those 10,000 extra days in one state, but saves nothing from the reduction in the other state. It winds up paying for the equivalent of 210,000 days – an increase in cost to the federal government of $1million.

    Why would a federal government that is drowning in debt do something like that?

    NAPCWA's document is more of a wish than a plan. It suggests an organization that views prevention as a luxury that would be nice to have, rather than an organization that is "fired up, ready to go" and reform child welfare.