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May 2008Vol. 9, No. 4Privatization Initiatives: Design Elements and Evolving Roles

The privatization of public services is a growing trend, and many State child welfare systems are turning to private agencies in an effort to improve services for children and families and control costs. In order to help States and other jurisdictions make sound decisions about privatization, the Office of the Assistant Secretary for Planning and Evaluation (ASPE), U.S. Department of Health and Human Services, is publishing a series of six papers on privatization, each focusing on a different aspect of child welfare privatization considerations.

Papers 2 and 3 were recently made available on the ASPE website.

Paper #2, Program and Fiscal Design Elements of Child Welfare Privatization Initiatives, stresses the interrelationship of decisions about program goals, the scope of services, and expected outcomes and benefits. Main sections of the paper explore:

  • Program design considerations, including goals, services, target populations, size and scope, case management elements, accountability, and different types of contracts
  • Fiscal designs, including global budget transfers, case rates, performance-based payment models, and bonuses and penalties
  • Challenges in implementing new fiscal models, such as estimating costs, anticipating risk, achieving funding flexibility, and managing cash flow
  • Lessons learned

Examples from States that have instituted privatization measures are included.

Paper #3, Evolving Roles of Public and Private Agencies in Privatized Child Welfare Systems, explores the transition of case management functions from public to private agencies and the sharing and division of roles and responsibilities after privatization. The paper covers:

  • A brief history of privatization
  • The transition to privatized case management, including the preparation and training of public and private child welfare workers
  • Specific examples of how jurisdictions in seven States have divided case management responsibilities related to children in out-of-home care
  • States' experiences using State Automated Child Welfare Information Systems (SACWIS) in jurisdictions where foster care has been privatized

While the experiences and challenges of transitioning to privatization have varied among jurisdictions, all report the importance of preparation, communication, flexibility, and clearly defined roles and processes.

Related Items

  • Children's Bureau Express wrote about the first paper in this series in "Assessing Readiness for a Privatized Child Welfare System" (December 2007/January 2008).
  • Extensive information on privatization is available through the Children's Bureau's National Quality Improvement Center on the Privatization of Child Welfare Services at