PerformanceBased Contracting

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Performance-Based Contracting

• State of Illinois
• 2000 Innovations Award Winner
• Presented by Marsha Edgington-Bott

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Permanency

• Every child deserves a stable and lasting family
  life. This basic principle of permanency,
  endorsed as far back as the 1909 White House
  Conference on the Care of the Dependent Child,
  has been a goal of public child welfare systems
  for most of this century.

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Illinois Performance Contracting

• Introduced in 1997
• Since that time performance contracting has been
  critical in moving Illinois from one of the
  nations lowest-performing child welfare systems
  in moving children to permanency to a national
  leader

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Crisis in Permanency - Nationwide

• Foster care caseloads rose nationwide from
  280,000 children in 1986 to 502,000 children in
  1996.
• There were 6.9 foster children for every 1,000
  children.
• This was the highest prevalence rated recorded
  this century.

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Illinois Crisis

• There were 17.1 foster children for every 1,000
• This was the highest prevalence rate in the
  nation.
• Foster care growth was eating up more than its
  share of state revenues
• Workloads of 50 to 60 children per caseworker
• Illinois substitute care system should have been
  half its actual size in 1997
• Median length of time entering children stayed in
  care had increased from 8 months in 1986 to 56
  months in 1996

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Investing in Permanency

• The rate of children exiting the system fell
  below the rate of new cases coming in
  system-wide.
• Part of the problem was the basic contracting
  structure.
• Contracts based on a fee-for-child payment were
  undermining permanency because once the child is
  ready for permanency, an agency faces losing
  revenue unless the child is replaced with a new
  referral.

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Performance Contracts in Illinois

• Significant investments in activity that would
  support permanency
• Focused staff positions
• Resources enabling providers to begin serving
  children more quickly upon placement
• More resources for support of children returning
  to their biological parents
• Administrative funds to support different models
  of child welfare service provision

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Contract Realignment

• The contract realigned financial incentives to
  secure accountability and reinforce the
  importance of achieving outcomes over maintaining
  children in care.
• Agencies were allowed to use superior performance
  in moving children to permanency as a way of
  lowering their caseloads, maintaining their
  contract level and financially enhancing their
  program.

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Agency Redesign

• Redesign of how agencies receive new cases for
  placement services
• All agencies were required to accept 24 of their
  caseload in new referrals
• All agencies were expected to move 24 of their
  caseloads to permanency
• By exceeding the 24 benchmark an agency could
  secure caseload reductions without loss of
  revenue.
• Falling short of the benchmark meant serving more
  children without a change in contract level

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Measures of Success

• The rise in adoptions
• The rise in subsidized guardianships
• The rise in overall agency performance levels
  since the programs implementation.

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Adoptions

• During fiscal year 1999, more children were moved
  to adoption than in the combined years of
  1987-1994.
• Fiscal year 1997 adoptions 2,229
• Fiscal year 1998 adoptions 4,293
• Fiscal year 1999 adoptions 7,315
• Fiscal year 2000 adoptions 6,200

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Subsidized Guardianship

• A new permanency option through Title IV-E waiver
  from the federal government
• Designed to create a permanency option for
  relatives committed to the long-term care of
  children placed in kinship care
• Fiscal year 1998 1,276 children placed
• Fiscal year 1999 2,199 children placed
• Fiscal year 2000 1,700 children placed

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Prior to Performance Contracting Initiative

• Average permanency rate for agencies placing
  children in relative care was 6.7.
• End of fiscal year 1998 averaged 20 with the
  best agencies achieving 44.
• End of fiscal year 1999 system-wide performance
  for relative care climbed from 20 to 30.
• End of fiscal year 2000 system-wide performance
  for relative care climbed to 34.

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Traditional Foster Care Permanency

• In 1998 performance contracting was expanded to
  traditional foster care.
• Fiscal year 1999 permanency rate climbed from
  14 to 24
• Fiscal year 2000 permanency rate climbed to 25

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Impact of Performance Contracting

• Caseload decline a 40 decline from 51,000
  children in care to nearly 30,000 in just three
  years
• The reinvestment made possible through consistent
  gains in permanency
• Reinvestments support better service delivery for
  the children and families in Illinois child
  welfare programs
• The savings generated by the declining caseloads
  are used to fund contracted caseload reductions
  20 by the year 2000

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Sharing the Lessons

• The structure of performance contracts allows
  capacity to be easily transferred from the worst
  performing agencies to the best performing
  agencies without additional cost.
• Lowering caseloads is the way to reinvestment in
  the future of children.

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The Groundwork

• The state laws of Illinois had to be changed so
  that undo hesitancy about terminating parental
  rights was removed as a barrier in adoption.
• In 1997 Illinois passed the Permanency
  Initiative, which eliminated long term foster
  care as a permanency goal, reduced the timelines
  to one-year, and directed the Dept. to engage in
  concurrent planning to help achieve permanency at
  the earliest opportunity.

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More on Groundwork

• Partnerships with the Courts specific judges
  took the lead establishing the legal groundwork
  for moving Illinois wards into permanent homes.
• The Dept. supported real partnership with
  private service providers which emphasized
  sharing information on system performance,
  barriers to improving and dealing with the
  ongoing challenges inherent in serving a
  vulnerable population.

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Since 2000