Privatization…Good for the State or for the Child? Gaining Insight into the Trajectory of Experience for Children in Foster Care in States That Are Fully Privatized, Partially Privatized or Non-Privatized

Background/Purpose

States have implemented models of privatization in public child welfare believing that privatization increases efficiency of the system and effectiveness of the services provided (Ram, 2012; Freundlich & Gerstenzang, 2003).  However, the rationale behind privatization does not support the opinion that privatization models produce cost-savings or effective services (Hubel, Schreier, Hansen, & Wilcox, 2013). Despite the vast amount of literature related to the operations of the public child welfare system, minimal research has been conducted regarding privatization generally and its levels of efficiency and effectiveness specifically related to the trajectory of experience of the child in care. The primary aim of this study is investigate how the differences between state foster care systems and their levels of privatization impact the trajectory of experience of children in foster care.                      

Methods

This study employed a secondary data analysis using the Adoption and Foster Care Analysis and Reporting System (AFCARS) data for this study (n=683, 031). Using a purposive sampling method, states (n=51) were grouped into three groups: fully privatized, partially privatized, and non-privatized. Bivariate and multivariate comparisons were conducted by level of privatization to determine differences between privatized, partially privatized, and non-privatized foster care systems and their rates of efficiency and effectiveness in categories related to areas such as number of days in care, removals, number of placement settings, removal manner, removal reason, and children exiting to emancipation to demonstrate the experiences of children in care.

Results

A discriminant function analysis (DFA) was conducted to determine any differences between the three levels of privatization of the foster care system. Four separate DFA’s were run and for all the models; equality of variance-covariance matrices could not be assumed. Box’s M equaled 61, 015.50, F (110, 4978768827) =, p< .001; thus, equality of variance-covariance matrices cannot be assumed. The primary three-group discriminant analysis produced two discriminant functions.  The first function had a canonical correlation of .314, whereas the second function had a canonical correlation of .150.  For functions one through two, Wilk’s Lambda equaled .881, Chi-square (20, N= 73, 193) 9,258, p< .001.

These results suggest that the models slightly to moderately discriminate among the three groups of states based on levels of privatization and their rates of efficiency and effectiveness. Specifically, non-privatized foster care systems differentiate the most from fully privatized and partially privatized foster care systems and are both more efficient and more effective in relation to the child’s trajectory of experience in care, with standardized coefficients for function 1 of 0.015 and 0.712 respectively.

Conclusions/Implications

Ultimately, the results of the analysis demonstrated that non-privatized foster care systems demonstrate higher rates of efficiency and effectiveness.  In other words, children in fully privatized foster care systems are experiencing higher amounts of placements, staying in care at longer rates of time, and exiting to emancipation at higher rates than in non-privatized foster care systems. While further research is warranted to extend these findings, the results from this study demonstrate the necessity of stronger data regarding privatization of public child welfare.