Quasi-market solutions, such as privatization, have been increasingly promoted among states, to reform public foster care agencies otherwise deemed ineffective and inefficient. The promoted promises of privatization have been its ability to increase efficiency, accountability, decrease costs, and consequently improve outcomes for children and their families. However, this study questions if privatization measures up to its promise, in terms of overall system performance and safety and permanency outcomes for children served.
Purpose: The aims of this study were to: a) to compare non-privatized vs. privatized foster care agencies for overall system-level performance in terms of national safety and permanency outcome standards; and b) to explore differences in child-level outcomes by racial groups between non-privatized and privatized agencies to ascertain issues of disproportionality and disparity.
Method: A controlled-comparison matched 5 non-privatized state foster care systems, with 5 privatized state systems based on the 2013 state foster care population (on 9/30/2013). A state-level dataset (N1 = 10 states) was used to compare national performance outcome and other state/system-level measures; and 2 large national child welfare datasets (AFCARS and NCANDS) were configured together to test the effect state system type had on the relationships between child/case-level data (N2 = 118,761 cases) and national performance outcomes.
Results: The findings of this study suggest that overall, privatized foster care agencies fared no better than non-privatized agencies. Where statistical significant differences were found, results marginally favored non-privatized agency performance over privatized agencies. Racial group comparisons on case-level outcome measures found significant differences between racial groups on all measures; and significant differences between state system types on some of these measures.
Conclusions and Implications: This study joins the ongoing body of research on privatization and child welfare, documenting that there is no current empirical evidence that privatizing foster care services propels our U.S. child welfare system to higher overall performance, in improving outcomes for children, or cost-savings. This study concludes that the public good, that is foster care service provision, is not all together amenable to the current mechanics of market competition (privatization). Regarding disproportionality/disparity, this study also offers a foundation for future exploration into the impact of policy on foster children of color.