In Texas, Trepidation as Child Welfare Privatization Moves Forward

Texas State Capitol. Photo: Houston Public Media

In December 2015, a federal judge issued a scathing ruling against Texas’s child welfare system, saying “foster children often age out of care more damaged than when they entered” and ordered a laundry list of fixes the state needed to implement. Tasked with overhauling a long-broken system, Texas leaders have decided the best way for the state to dig out of its child welfare woes is to put more power in the hands of local, private providers.

But several key experts on the state’s child welfare system fear that the state’s swift move toward privatization could end up costing more money and producing worse outcomes for the children in care.

In late 2016, amid a flurry of news stories about children sleeping in the offices of child protective services agencies, the legislature approved more than $140 million in emergency funding to hire more caseworkers and give them raises. But in 2017, the Texas legislature convened for its biennial session with changes to child welfare looming especially large. And while the federal lawsuit went through the appeal process, with the Fifth Circuit ultimately holding up key parts of the judge’s ruling and nixing others in July of this year, the legislature was pressured to make significant changes ahead of the appeal decision, instead of waiting another two years to be in session again.

The state’s lawmakers settled on a bill by State Sen. Charles Schwertzer (R), who was at the time serving as the head of the Health and Human Services committee, which called for drastic moves into privatizing Texas’s child welfare system. Dubbed “community-based care,” the model focuses on two phases.

First, it puts a single nonprofit contractor in charge of foster care placements in each of 11 foster care regions around Texas. Each nonprofit is on the hook for securing placements, growing foster care capacity, and coordinating and delivering services to foster children and their families in their region. The second phase, which has yet to be implemented, will see foster care case management shift from the state, via the Department of Family and Protective Services, to these private contractors.

Texas will privatize its child welfare services, dividing it into 11 “catchment” areas. Photo: Texas Department of Family and Protective Services

The bill passed easily, but it wasn’t without its detractors. F. Scott McCown, a former district judge and former head of the Center for Public Policy Priorities, a nonprofit policy institute focused on low-income children and families in Texas, was vocal about his reservations, testifying against the bill in front of the Senate Committee on Health and Human Services in 2017.

McCown is still worried about Texas’s move into privatization.

“Almost anything in the human service area that’s been privatized has ultimately given you a worse system than you already had — private prisons, private mental health hospitals instead of public systems. You don’t have the accountability, you don’t have the transparency, and you don’t get the results,” McCown said, in an interview with The Chronicle of Social Change.

Kansas, which operates a mostly privatized child welfare system, was sued last year for “churning” children through a huge number of placements — some kids, the suit alleges, have had up to 100 placements, many of them for a single night. In Florida, the most privatized state system, a federal review found that the state was underperforming in 11 of 14 categories.

And indeed, Texas’s first attempt at privatization in 2013 crashed and burned in less than a year, with a for-profit contractor, Providence, pulling out of its five-year contract with the state due to underfunding. In 2014, though, a Fort Worth-based nonprofit called ACH Child and Family Services received a contract from the state to take over placement services for the seven-county region surrounding Fort Worth.

So far, ACH’s efforts have been deemed a success. The latest reports noted that ACH had improved on the baseline in several key areas, including placing more kids in foster homes rather than restrictive placements like residential treatment centers, placing more sibling groups together, and increasing the number of 18-year-olds completing their Preparation for Adult Living classes.

ACH has made strides in an important arena — updating the information technology to better equip its workers to make placement decisions for kids. The nonprofit created a data portal that allows workers to identify the best place for a child within four hours of their removal, and has shared the portal with other nonprofits around the state that are implementing phase one. Updating the state’s badly outdated information system was a key piece of Judge Janis Jack’s list of remedies against the state, although that part of the order was struck down on appeal by the Fifth Circuit Court.

But the nonprofits that have undertaken phase one of Texas’s privatization attempt are running into a familiar problem: underfunding. ACH pursued the contract with the understanding that it would have to put in $6 million of its own money to make the numbers work. And after proving the model could work, the legislature increased ACH’s funding for the first phase. But phase two has lagged, with a current projected start date of September 2020, as the nonprofit negotiates with the state over the budget.

“This was sold to [the legislature] that it was cost-neutral, and we said we cannot deliver quality services if it’s cost-neutral,” said Wayne Carson, the executive director of ACH. “The state’s case management system has not been a good process. We don’t feel the families get a lot of support to reunify with their kids, we hear about caseworkers that rarely meet with their kids, the turnover was high. In my opinion, their caseload sizes were just too high.”

Carson has asked for a caseload cap of 14 cases per each worker, with one supervisor per six workers. That’s an additional $5 million for ACH, which is responsible for about 1,300 children, or about 8 percent of the state’s system. The state has agreed — but it raises questions about whether that level of additional funding to achieve workable caseloads will be available to all the regions around the state.

ACH is further negotiating around the per diem amount for each child, which will be the same no matter the level of care — the state says $88 and ACH pegs it at $90, a seemingly small difference that could work out to millions annually.

The caseload sizes will be an attractive bargaining chip, though, as the nonprofit seeks to retain many of the state’s caseworkers to move into the private sector. Many young workers are excited for the shift, Carson said, but older workers, who have put in a lot of time with the state, are understandably wary about losing their pensions.

“We’re a neighbor of Dallas and there’s some pretty large parts of the child welfare system that aren’t under this model yet, so there are opportunities for them to relocate to another office that’s not too far away,” Carson said.

Of course, that won’t be true for many of the state’s workers as the plan is rolled out around the state. McCown said the move into privatization will prove to be a net loss for many of the state’s caseworkers.

“A public system is going to pay better in the long run than the nonprofits, with retirement and healthcare and the basic raises that the state gives its workforce,” McCown said. With this move to privatization, “you’re disinvesting in your workforce,” he said.

In Bexar County, which includes San Antonio, another well-established nonprofit, The Children’s Shelter, won the contract, and it has been running placement services under the moniker Family Tapestry since the beginning of the year. The philanthropic community has also stepped up, providing more than $7 million to boost the nonprofit’s chance at success.

“One of the things that is unique about Bexar is that the local philanthropic community is fully embracing community-based care,” said Judge Peter Sakai, who presides over the county’s children’s court and was not in support of privatization ahead of the legislature’s decision. “It’s well-funded and well-capitalized and right now, it’s been working.”

But not every county system has a well-established nonprofit of the size that could take on such a hefty effort. Harris County, home to Houston, is one of those — with 2,674 kids in foster care as of August 2019, there is no single local nonprofit currently able to handle placement services, let alone case management. And rural areas, with smaller populations but less access to placement settings for children with higher needs, have their own challenges in implementing the “community-based care” model, which aims for kids to be placed within 50 miles of their homes.

And in at least one case, the nonprofit providing services will not have deep ties to the community. In the region encompassing Amarillo and Lubbock, a Kansas-based nonprofit, St. Francis Community Services, won the contract, and the region is expected to begin handling placement services in January 2020.

“It’s not community-based care, it’s privatization,” McCown said. “It’s Orwellian to call it community-based care when the community you’re talking about is Topeka, Kansas.”

Roxanna Asgarian is a freelance journalist based in Houston.

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