A case study of the effects of privatization of child welfare on services for children and families: The Nebraska experience

Abstract

Privatization, or contracting with non-governmental agencies for provision of state or federally funded services, is a strategy that has gained recent attention from policymakers as a potential tool for successful child welfare reform. The Child Welfare Privatization Initiatives Project was created in 2007 as a joint effort between the United States Department of Health and Human Services and the Office of the Assistant Secretary for Planning and Evaluation. The framework identified by this project produced twelve key considerations for states moving towards a privatized system. This case study considers these twelve considerations in a description of the large-scale effort to privatize child welfare services in the state of Nebraska that began in 2008. Problems leading to a need for child welfare reform and possible factors that motivated policymakers to shift services from the public to the private sector are also described. While proponents of privatization appeared to expect rapid increased efficiency and cost-savings, this case study explores multiple reductions in quality and availability of services for children and families served by the child welfare system that occurred during the effort. Further, the cost of child welfare services in Nebraska increased by 27% and the private agencies invested over $21 million of their own funds as they attempted to uphold contracts. Recommendations for practitioners and policymakers digitalcommons.unl.edu H u b e l e t a l . i n C h i l d r e n a n d Yo u t h S e rv i c e s R e v i e w 3 5 ( 2 0 1 3 ) 2 considering participating in efforts to privatize child welfare services in the future are made based on Nebraska's recent experience.

Meanings and expressions of co-responsibility: A small qualitative study based on the reflections from Chilean social workers involved in public-private child welfare

“…In child welfare, economic arguments in favor of outsourcing interventions are highly debatable. As Hubel et al (2013) note: “cost savings should not be a key reason for privatization” (p. 2053). This connects to the situations faced by clients, which often are highly complex.…”

Trends in local public child welfare agencies 1999–2009

“…However, the limited evidence available suggests that costs may sometimes both rise for states and exceed contractor expectations (Hubel, Schreier, Hansen, & Wilcox, 2013; Unruh & Hodgkin, 2004). One potential reason may be a lack of competition.…”

Economics of Foster Care

“…Privatization can come with potential challenges, including stakeholder buy-in and accurate cost estimates (US Department of Health and Human Services 2007). Hubel et al (2013) studied Nebraska's effort to privatize its child welfare system, which involved replacing the traditional feefor-service model with a capitation amount based on an expected cost of service delivery. 7 The authors find that initial payment rates were too low, leading to substantial problems-namely, reductions in quality and availability of services along with a 27 percent increase in costs.…”