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DHS News August 2013      


Performance Based Contracting 

Eighteen of the largest providers of child welfare out-of-home care are involved in the pilot year of a Children, Youth and Families (CYF) contract process designed to not only achieve financial efficiencies but improve outcomes for children.  Called Performance Based Contracting (PBC), the pilot program got underway at the start of the state fiscal year, July 1.

During the pilot year, the 18 providers are being introduced to PBC and tweaks to the process are being made by DHS as well. The process will not “go live” until FY 2014-15.

A team composed of professionals from the DHS Office of Data Analysis, Research, Evaluation (DARE), the Office of Administrative and Information Management Services (AIMS), and CYF have been discussing PBC with the providers for months, said Katy Collins, a DARE analyst who is on the team.  In June, the team met with the 18 providers individually to review the contract goals set for them, based on a data analysis of the populations they serve.

Goals are drawn from information compiled in DHS’ Key Information and Demographics System (KIDS) about placements. The information is refined by the Chapin Hall social services research center at the University of Chicago before goals are set.

The incentives for providers to meet the goals can be financial and professional. Overall, the goal of PBC is to improve the outcomes of children by decreasing length of stay in placement, increasing the use of least restrictive care environments, and improving the likelihood that children who return home, stay home.  These goals, if met, will help DHS to reduce costs by 30 percent within 5 years, a target that is part of DHS’ participation in the federal Child Welfare Demonstration Project (CWDP).

However, goals built into PBC are not solely geared toward saving money. Finding what works best for children and supporting them is a primary aim as the CWDP moves forward, and components of PBC fit that target. When providers are able to meet a goal set for them and consequently reduce costs, the savings can be recouped by the provider and used where it sees a need.

During the pilot year, DHS is committed to improving access to and quality of aftercare services for children, with the goal of preventing re-entries into care. Re-entry rates have been hovering around 26 percent of cases, according to DHS data compiled for the years 2006-10. Part of the issue behind re-entries has been inadequate aftercare. When it has been made available, it often was completed by a provider other than the one that handled the child’s placement.

Providers in the PBC pilot are pursuing aftercare programs to assist with stable transitions by children to home. Aftercare offers an example of where providers might recoup money and re-invest it. Some children and families may be found not to need aftercare. The resulting savings could be used by the provider for more staff, for example, or steered toward some area of service the provider believes would benefit children.

That sort of innovation is among the goals of CWDP.  Providers have recognized not only the need for keeping abreast of changes in practice but also the necessity to watch finances carefully in an era of constantly shrinking budgets, Katy said.

 “Everyone wants to serve kids in the best possible way,” she said.


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