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May 19, 2009

OLYMPIA—Gov. Chris Gregoire today approved sweeping changes to the child-welfare system that will use performance-based contracts and private-sector competition to drive state dollars toward proven strategies for helping children and troubled families.

"This is an innovative and exciting first step that will change the way we provide and fund child welfare services," said Rep. Ruth Kagi (D-Lake Forest Park), the lead sponsor of the reforms.

"In the past, we've based funding on caseload sizes and service volumes, which rewards and encourages bigger caseloads and more services. The new approach will focus on rewarding those service providers who most effectively help at-risk children and families," Kagi said.

The reform gives the Department of Social and Health Services until January 2011 to convert some 1,800 existing child-welfare system contracts into performance contracts.

In addition to emphasizing contracts that reward improved performance, the reforms set up demonstration regions that will allow private-sector contractors to provide a full range of child-welfare services, including case-management. A study will compare outcomes in the demonstration areas to outcomes in areas where case management continues to be provided by DSHS. The results of the study will be reported in 2015.

According to Kagi, the demonstration regions will cover between 20 and 40 percent of current service caseloads. CPS investigations and foster-home licensing will remain within the purview of the Children's Administration.

As a further incentive to improve outcomes, the reform calls for state leaders to develop a plan for reinvesting savings from reduced caseloads into prevention and intervention services that reduce the need for, or duration of, out-of-home placements.

"This reinvestment strategy makes much more sense than the current approach of taking money away whenever we successfully reduce caseloads," Kagi said.

The child-welfare reforms could generate millions of dollars of benefit to the state by moving the system toward evidence-based practices that improve outcomes.

According to a 2008 report from the Washington State Institute for Public Policy, expanding the state's portfolio of evidence-based programs in child-welfare services could generate long-term net benefits of between $317 and $493 million, including up to $62 million of net taxpayer benefits.

House Bill 2106 passed the House unanimously after passing the Senate by a vote of 37-10.

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