The tidal wave of problems that thrust Child Protective Services into newspaper headlines crested with the 2016 death of Grand Prairie 4-year-old Leiliana Wright. Her paternal grandparents, alarmed by their granddaughter’s bruises, had sent photos of the girl’s beaten face to CPS. But the assigned investigator was slow to check on the girl and her younger brother and failed to review their mother’s criminal history, which included a felony conviction and a documented history of child abuse. The investigator was juggling seventy cases—five times what safety experts recommend. A few months after the grandparents’ complaint, Leiliana was beaten to death by her mother’s boyfriend. She spent most of her final hours bound by electrical wire in a dark closet.
To the public, CPS has often felt like a complicated mess that inspires feelings of hopelessness and helplessness. A 2015 court ruling by a federal judge in Corpus Christi demanded changes to the system for foster care kids, “who almost uniformly leave State custody more damaged than when they entered.” Over 260 pages, the judge cited the state’s faults, and the list was long. Instead of reducing workers’ caseloads, the Department of Family and Protective Services had increased them, with 43 percent of caseworkers managing more than 21 cases. Extensive paperwork requirements resulted in caseworkers spending only 26 percent of their time actually visiting children. The Texas Department of Family and Protective Services relied on “squeaky wheels” for improvement, yet the environment was “unsupportive and punitive” toward workers who complained. CPS had a high staff turnover rate, disrupting relationships with children.
Worse, in the judge’s opinion, none of these criticisms were news to the department. Over many years, study after study showed CPS had major problems, and yes, the legislature adjusted the system. Those tweaks had only yielded a few positive results while fundamental issues persisted, and many children suffered the consequences. The judge concluded, “Texas’ foster care system is broken, and it has been for decades.”
Nowhere was this more obvious than the gruesome statistics showing a spike in child deaths in 2016: 217 Texas kids died from abuse, a 34 percent increase over the previous year. A review of DFPS by the state’s Sunset Advisory Commission arrived at many of the same conclusions as the federal judge.
All of this spurred newfound urgency for a transformative overhaul of the foster care system. Something had to be done. Many legislators felt they had been pouring money into DFPS without seeing better outcomes—only terrible headlines. Sizable majorities in both chambers of the 2017 legislature rallied behind the proposal of Senator Charles Schwertner, then the chair of the Health and Human Services committee, to increase the privatization of child welfare services.
It was a historic and divisive move. While seemingly everyone agreed that Schwertner’s Senate Bill 11 included much-needed improvements—significantly increasing funding for DFPS and requiring better data collection—it manifested a huge philosophical shift, one conservatives had long sought, to further localize and privatize services. (They branded it “Community-Based Care” to stress the desire to keep kids in their geographical areas.) Meanwhile, many foster care experts and child advocates worry that turning near complete control over to private contractors merely diminishes transparency and introduces problematic financial incentives into the system.
Once SB 11’s provisions are enacted, which has already begun to happen region by region this year, the state stands to lose much of its direct contact with the care of foster children. The contractors taking charge will largely be judged on a collection of self-reported statistics, with few state employees in place to inspect their work.
It’s not hard to see how this might easily invite a host of problems. Just look back at the state comptroller’s horrific 2004 report called “Forgotten Children,” which rang the bell early for increased privatization but argued that the crucial element would be transparent supervision of the private sector. The photographic evidence it provided was memorable. Because investigators had so few housing options, CPS was tolerating contractors that provided deplorable conditions straight out of a Dickens tale. One “therapeutic camp,” licensed in Texas for 22 years and receiving about $1.3 million annually, housed boys in primitive open shelters; the boys cooked their own dinner with water they heated themselves on a fire, and their outhouses discharged sewage all over the surrounding area. Systemwide, there was a dearth of inspections or oversight, as well as of CPS staffing. When the comptroller’s review team checked in on eighteen outsourced entities, “Several said they had children for more than a year that had not received a single caseworker visit.”
If these conditions could happen with state oversight, child welfare advocates worry, what’s to prevent an unscrupulous or incompetent contractor from housing children in similarly deplorable circumstances? The 2019 legislature is expected to fund significant expansions of CPS privatization. Friday is the last day to file bills in this session, so time is running out for lawmakers to introduce greater transparency into this experiment—the failure of which could have dire consequences for children caught up in it.
“A Serious Conflict of Interest”
Senator Charles Schwertner grew politely exasperated when critics flooded the room to testify before the Senate Committee on Health and Human Services in February 2017. The Central Texas orthopedic surgeon with conservative credentials and a neighborly smile leaned forward in his dark green leather chair, rested his elbows on the dark wood dais, and offered a warning shot. He wanted to make drastic changes to the foster care system. Continuing down the current path, he said, “is a nonstarter, and I think anyone advocating for that is not acting in the best interest of the children.”
SB 11’s proponents argued that privatizing foster care would lead to greater efficiencies, but many of the experts at the hearing were there to raise major concerns. Chief among them was Judge Scott McCown, director of the Children’s Rights Clinic at the UT-Austin School of Law. He served as a state district court judge from 1989 to 2002, overseeing a child protection docket, and from 2003 to 2013 he served as executive director of the Center for Public Policy Priorities think tank to address poverty and child welfare issues. A stout and serious man, McCown barely moved but to blink, and his words came slowly, in succinct, fact-laden paragraphs, delivered with the gravitas of a national proclamation. Private contractors should be able to work with families, he said. They can play a support role and coordinate services the state deems necessary to a family struggling with abuse or neglect issues: a parent that needs anger management training, for example, or mental health intervention. Contractors can find foster homes for kids and facilitate visits to the doctor and dentist. But he drew the line at case management. SB 11 would delegate case management—the state’s responsibility as the appointed conservator of a child—to a “single source continuum contractor” (SSCC, for short) that would employ various subcontractors.
“And in the name of the state—beyond the state’s control—the general contractor would be in charge of prosecuting this civil court case and making decisions as to whether a child goes with Aunt Sally or stays in their foster care,” McCown told the committee. “And this is a managed care organization that will be making money or losing money based on decisions it makes. And that is a serious conflict of interest.” Properly funded, he argued, the pilot program the state had tried with Fort Worth–based ACH Child and Family Services, keeping case management with the state, would work. SB 11 was crossing the final threshold of privatization, he warned, asking the fox to guard the henhouse.
The conflict of interest wasn’t his only concern. McCown’s testimony was a bullet-point list that would cause escalating heart rates among people of any political persuasion. States that have fully privatized foster care haven’t shown better results, he argued, and furthermore, they showed a significant cost increase, a trend he blamed on the oligopoly the model created. “There are very few organizations that can do this,” he said. “Once they negotiate that initial contract and you have shut down your public system, and it’s gone, then you’re at their mercy on pricing.” He also suggested that after full privatization Texas would begin taking significantly more children into care. When Florida privatized case management, he said, the number of children removed from their parents rose dramatically—14 percent between 2012 and 2015, compared to 1.2 percent in Texas. “You can imagine,” he told legislators, “you devolve all this down to nonprofits and the removal rate goes up. You have a dramatic cost driver.”
One after another, child welfare advocates in the room echoed McCown’s worries—particularly the conflict of interest, a charge that caused Schwertner visible irritation. Nonetheless, SB 11 moved out of the committee, and, sixteen weeks later, it passed the House 107-41 before sailing through the Senate 31-0. It will roll out in stages: stage one for coordination of services, stage two for case management. By the end of this legislative session, lawmakers hope to have contracted foster care regions in half the state to begin stage one. ACH, which is moving into stage two, will run the entire foster care system for the Fort Worth area, including case management, as early as March 2020 if the legislature approves the necessary funding.
Privatization is a risk that has not always turned out well. The first SSCC pilot, implemented in 2013, was a bomb. A for-profit, out-of-state company called Providence wasn’t well funded or well connected in Texas communities and ran out of money. Many advocates also look disparagingly upon the Florida and Kansas child welfare systems, which SB 11 used as models. Kansas was the first to privatize in 1995, in response to an ACLU lawsuit. Instead of transitioning in stages, Kansas chose a rapid overhaul that threw the system into chaos. Nonprofits lacked the time to build their organizations—some quickly tripling in size. Courts weren’t always sure which agency was accountable for the children. Child-welfare workers for the state, now without jobs because of privatization, didn’t apply for the nonprofit jobs, as anticipated; rather, they retired or moved to other state agencies. Due to high turnover, some children saw a new caseworker each month. Since costs weren’t tracked in Kansas’ legacy system, nonprofits significantly underestimated their costs, and even with the state kicking in extra funds, one contractor went bankrupt and others lost money. Florida, which transitioned more slowly, spent $27.5 million on five pilot programs—four of which failed—and still received mixed results.
Those results haven’t improved. In January 2017, the U.S. Department of Health and Human Services’ Children’s Bureau rated Florida as needing improvement in 11 of 14 categories and gave the state 90 days to come up with a plan to improve care. In more than half of the eighty foster care cases studied, agencies didn’t provide appropriate services before removing children from their homes, and they weren’t thorough in following safety plans. In a report last August, Kansas failed to meet 16 of 30 federal and state child welfare performance measures. “The frequency with which children cycle through foster homes is mentioned often,” an advocate said in the report, “to the point where the words that I have heard are ‘couch surfing.’”
In a decentralized system where the providers are also the managers, serious oversight is warranted. No reports from Kansas or Florida discuss the conflict of interest, as no whistleblower has come forward to testify that company mandates influenced their decisions. But common sense tells us there is a tension there, just as there will be in Texas. Under the current statute, one state staffer for every 200 foster children in a region will read occasional case files. But no one handling oversight for the state will make monthly visits to the kids, nor interview them, nor investigate whether the information in those files is accurate. The contractor controls the bulk of the narrative. If a contractor does have a nefarious agenda—a legitimate worry, given foster care’s history—it will be increasingly difficult to piece that agenda together.
Privatization’s Guinea Pig
While Schwertner had heard arguments for putting more money into the current CPS system, he disagreed with that course of action. In his mind, that option only offered more of the same top-down, Austin-centric government approach that was causing the problems. “I think it’s important that we reengage regional not-for-profits and churches that have an active and historical interest in the care of children,” he told me. The state had its own problematic incentives, he said, and while community-based models in places like Florida and Kansas may have problems, he believed Texas would have better outcomes. Certainly, ACH was showing promise.
Indeed, ACH’s CEO, Wayne Carson, is the best advertising for privatization, having served as SSCC for Region 3B, a near-rectangular area of seven counties that includes Fort Worth. He firmly believes in the model’s potential. When I visited ACH last fall, driving past the red brick entrance to the 20-acre campus in one of Fort Worth’s poorer neighborhoods, the nonprofit’s endowment money was on display. New red brick buildings dotted the campus, and dormitories dating back to the early 1900s, when the site was an orphanage, were freshly remodeled: apartments for single parents on the brink of homelessness, apartments for 18-to-21-year-olds who have aged out of the foster care system and need assistance getting a bank account, a car, and a job. One old dorm had been transformed into offices for a foster care and adoption program. A shelter for runaway teenagers sat adjacent to an on-site school. (Another campus in south Fort Worth includes six houses and a family center.)
Carson is a tall man with short, white hair, wire-rim glasses, and long creases down his cheeks. He has the warm smile that you might expect from a social worker—which he was, having started his career as a group home parent at ACH in 1987, back when the company was on seven acres of downtown Fort Worth and just beginning to add clinical services to its residential care program. I asked him how he felt about taking on case management.
“The reason I like the idea of adding case management to the model is because right now we are working with the child and the CPS workers are working with the family,” he said. If he wants to get innovative, he argues, he needs more control. “The way the system is organized, it’s fragmented and it’s disconnected. We have two different data sets, and we have two different levels of expectation in two different ways of supervising and a lot of difficulty in connecting service plans, and so I really thought that the system could be organized in a way that could be more successful so that everybody working in it can do better.”
He understands the concern about a vendor’s conflict of interest. People have been asking him if ACH will be financially incentivized to keep kids in care instead of getting them into permanent homes. “What people don’t understand is, this contract evolves to [a stage that] would actually incentivize us to send kids home earlier because we get paid kind of the same amount; it doesn’t matter how long they’re in care,” he said. “So, yeah, you want them to go out so you can save money. There has to be some level of confidence that we’re actually making decisions that are in the best interest of the kids. And I think some of that’s easy to measure: What’s the average length of time before a permanency decision is made? And then, if they go home, we need to check up on them. Do they come back into the child welfare system? If we’re sending kids home when they shouldn’t be going home, then there’s going to be re-abuse happening, and they are going to be coming back into the system. And we should be held accountable for that.”
Even without case management, he believes the new model has been showing benefits in his community, where foster care is no longer a faceless agency. “Now, we’re kind of the quarterback. We know what the needs are, and we can connect people in ways that are difficult more remotely from Austin,” he said.
As he prepares for the next stage of privatization, he is encouraged by state support. The pilot contract ran January 2014 to August 2017 for between $35 million and $45 million. (The number was flexible and dependent on how many kids would be taken into foster care.) His renewed contract, which runs through August 2020, is for roughly $45 million to $47 million, and lawmakers seem primed to invest in privatization. “I don’t mind putting money in something that’s working better for our children and families,” Schwertner told me.
The improvements ACH has made in stage one required heavy lifting and $6 million of its own money. The nonprofit had to build its own statewide database showing how many foster care beds are available at any given moment in a community, to reduce the practice of shuttling kids far from their homes. Staffing also needed to be beefed up considerably. While the state’s original contract estimated the project’s workforce at a pitiful 9.3 people, Carson created an organizational chart to follow through with all the services required—coordinating, troubleshooting, and overseeing operations for all 1,300 kids in the region’s foster care system—and found he’d need 51 workers. “That seemed reasonable,” he said. A third party crunched the numbers and supported him.
The third investment was in residential treatment centers. RTCs, also called group homes, often get a bad rap since they don’t offer a family setting. Regardless, they’re a social necessity. Extended family and foster parents often lack the resources to care for teens and high-needs children with emotional or developmental issues—those who require a lot of doctor’s visits or special attention, or who might act out or become suicidal without therapeutic expertise and constant supervision. Finding temporary homes for these children was a major challenge. When ACH started working with the state in 2014, about 20 percent of the kids that came into care were high needs; by 2018, that number rose to 35 percent. Like the rest of the state, Region 3B lacked enough placements for these children. So ACH built an RTC and invested in mental health treatment to minimize the length of stay.
Just about any child advocate you ask will tell you that ACH does amazing things—even critics of SB 11 like McCown admit that. Many child advocates believe that ACH is unique in its level of philanthropic commitment, quality of services, and long history in its community. Carson says he knows similar organizations exist in Texas, just waiting for a chance to prove themselves. But how many of them can replicate ACH, especially if the state only funds these contractors at the same levels at which it has funded CPS?
“Wayne [Carson] is the most competent one of the bunch,” McCown said. “He has the best values of anybody in the bunch. And he’s got the most community ties of anybody in the bunch. And he can’t do it. [ACH] just signed a contract for case management, which is kind of a fake contract because it says, ‘We’ll do this if the legislature gives us more money.’ And so that’s an admission that they can’t do it for what the legislature is funding it for now.”
Ever since ACH became the guinea pig for the privatization experiment, other providers interested in following ACH’s footsteps and becoming SSCCs have been calling Carson and asking for his advice. He warns them not to set themselves up for failure, as Providence did, but to insist on funding for a robust staff and sufficient resources to build a database—requirements the state has, thus far, fulfilled as it has expanded the privatization model and contracted with partners in two more regions for stage one: Bexar County and an area of North Texas abutting the Panhandle, including Abilene and Wichita Falls. (Selected for rollout after that are the Panhandle and the region surrounding Bexar County.)
Caseworkers will have to make the transition to the private sector if they want to keep their roles, and Carson said he is hoping to get as many current CPS workers as possible to transfer over to ACH when the time comes. But there’s no telling, for the vast majority of workers, whether a private contractor’s position will be the same, better, or worse as their current one; they’ll all be different, so each caseworker’s future will depend on where he or she lives. This will, of course, be the same experience for the kids. As McCown told me, “For every Wayne Carson, there’ll be a Daffy Duck who is suddenly running your system, and you’ve got no control.”
“This Was a Really Big Risk”
Down the street from the stately capitol, a little yellow-brick bungalow houses the offices for the National Association of Social Workers’ Texas chapter, a sparsely furnished workspace for a handful of employees. The organization’s government relations director, Will Francis, is redhaired and tall enough that he always looks like he’s squeezing into dollhouse furniture.
When I visited last winter, he’d had a busy day. First, a judicial conference on childhood trauma, then a day of lobbying, as legislators started filing their bills. While he spent his early career as a CPS caseworker in Central Texas, visiting families and assessing risk, he now acts as the social workers’ mouthpiece to the legislature, and there is plenty for him to weigh in on. “I should just live at the Capitol,” he said.
Ramping up to this session, there was fear among advocates that legislators view foster care as a hefty item they checked off of their ever-growing to-do list last session. School finance reform and property tax reform are the primary issues in 2019. Yet new problems always arise for CPS, and those require adjustments. “You can’t just say, ‘We’re done with this, now let’s move on to the next one,’” Francis said.
But it appears the legislators have. As we move toward funding case management in this session’s budget—something the nonprofits would require in order to go forward with that transition—thus far, no legislator has filed a bill asking for more transparency in the newly privatized CPS system. That fact isn’t setting off alarm bells when it comes to forthright institutions like ACH, but it could pose problems down the line with providers that are more protective of their data. Ideally, contractors would supply the same performance data the state must deliver, but a lot of that information is going to disappear behind a proprietary wall.
As the state loses the ability to lay eyes on kids and talk to them, there’s greater potential for private providers to hide behind reporting—real or fudged. “Take, for example, kids sleeping in offices,” Francis said. (For awhile, the state didn’t have enough contractors or foster care parents, so kids taken into care slept in CPS offices.) “You know, that’s horrible. But we found that out, and we knew because it was the state doing the reporting. If that happens [with a private contractor], it’s going to take a whistleblower. I mean, that’s the only way we’re going to find out.”
He continued painting an alternative scenario—one a contractor may face, given the chronic housing shortage for foster children. “Let’s say we took a kid out that was being abused [in a foster care home], and the rest of the kids we kept there,” he said. “Where are we going to put them? Are we going to put them in an office? That’s a ding, and then the legislature yells at us again. So let’s keep them in an unsafe place because at least the placement itself doesn’t reflect poorly on our numbers.”
Kristene Blackstone, associate commissioner for CPS, underscored the department’s confidence that it plans rigorous oversight for the new model. “Children in care have a large network of people constantly in and out of their daily lives; that is the way it is currently, and that won’t change in the new model,” she explained via email. “In addition to caseworkers and the supervisor above them (which will also be in place in Community-Based Care with the contractor), there are judges, Court Appointed Special Advocates, child attorneys, parents’ attorneys, parents, other family members, foster parents, caregivers, medical and mental health professionals, educators, etc., who are involved and provide oversight, insight, and/or input into a child’s care, services all working towards moving a child to permanency.” This is all true. Still, there is no getting around the fact that as stage two goes forward, one crucial set of eyes—the public case manager, the one who sees the kids every month and ideally knows them—will be replaced by an employee of a private institution. And that makes critics nervous.
“The state system has transparency built into it,” Francis said. “Would I like more? Yes. But it does have transparency built into it. Is [privatization] a giant trust fall? In some ways, yeah.”
Like some other advocates, Francis is interested to see if nonprofits will expose just how underfunded the legacy system has been all these years. It remains to be seen how well the legislature will fund the privatization roll-out. If the state took the same money it has so far devoted to privatization and gave it to the public system, the state’s institutions could very well make needed improvements. The private sector has flexibility because the legislature gives them flexibility. “It’s very easy to scapegoat CPS,” Francis said. “But CPS is a traumatized system. They’re so used to getting hammered by the legislature, by advocates, by the public, by the news, they’re in duck-and-cover mode. We’ve never really loosened up and allowed them to grow. Because of that, we never will know what their potential was. We may very well see in the private area. A lot of my concerns may either not be proven or may be things we can address if we’ve had that transparency. And that’s all really a good thing.
“If history proves proponents correct,” he said, “I will be the first one to congratulate them. I mean that. But if not, this was a really big risk we took.”