Bridging Disciplinary Boundaries (January 11 - 14, 2007)

Objective: Performance contracting and managed care, which have spread in the past decade from the behavioral and physical health sectors into the child welfare sector, have been associated with disparities in service provision to clients. Little is known concerning whether, how, and why service provision to foster children and families responds to these market models. This paper answers the following questions concerning foster care service provision: 1) Is service provision different in performance-based, managed care versus fee-for-service contracting environments?; 2) Does variation in service provision exist among child welfare agencies?; and 3) Should differences exist, what factors explain differential service patterns?

Methods: Quantitative data were collected on a sample of 243 foster children served by nine nonprofit agencies in Wayne County, Michigan (Detroit). These agencies contracted with Michigan's public welfare agency to provide foster care services under one of two contractual mechanisms: a per child, per-diem reimbursement system; or a performance-based, managed care reimbursement system that contained bonuses for the movement of foster children into permanent placements. Because foster children were randomly assigned to nonprofit agencies, the results of this study are derived from a true experimental design. The panel dataset contains 930 days of information on children's service histories, individual and familial characteristics, and the characteristics of caseworkers responsible for these children and families. Random effects negative binomial regression models examined whether children and families served by managed care agencies received as many services as did those served by non-performance-based, managed care agencies, controlling for child, family, and caseworker characteristics.

Results: This paper finds that the intensity of foster care service provision is diminished in the performance-based, managed care contracting environment. Dramatic differences in agencies' service intensity also exist, even among agencies within similar contracting regimes, and even after controlling for time in care, type of allegations of maltreatment, and child, primary caregiver, and caseworker characteristics. Yet the variation in service provision is due only in very small part to who these foster children and families or their caseworkers were. This paper concludes that while the intensity of foster care service provision is somewhat influenced by these factors, it is much more heavily influenced by which agency is serving children and families and the institutional arrangements under which the agency was reimbursed.

Discussion: The finding of a performance-based, managed care-related decrease in foster care service provision is similar to results from studies in the managed care behavioral and physical health care sectors. The result of agency-based service disparities, however, is novel in child welfare research, and suggests that interagency disparities in service provision exist in the child welfare sector. Implications for practice include the need for greater attention to how market-based and interagency disparities in service provision affect the safety, permanency, and well-being of foster children and families. Implications for research include the need to examine why such disparities in care exist, and whether these disparities are associated with negative child and family outcomes, including a lower likelihood of reunification and lengthened stay in foster care.