Why Small Benefits Work Better

The Fixes blog in the New York Times on an excellent program called Youth Villages that helps to keep kids in their homes and out of foster care.  There's a few things I want to pick out about this article, which I'll go through.  The central them is that in home care is almost always cheaper than institutional care.

By age 23 or 24, fewer than half of the former foster care youths in the study were working. Close to a quarter had no high school diploma or equivalency degree and only 6 percent had completed a two- or four-year post-secondary degree. Nearly 60 percent of males had been convicted of a crime and 77 percent of females had been pregnant.

This frames how bad the issue is.

The idea is to help youths return to their original families wherever it is possible to do so safely by providing their parents, or in some cases other relatives, with an extensive array of in-home support services. This approach may seem counterintuitive, given that child welfare agencies intervene when courts deem parents unfit to care for their children. However, evidence indicates that intensive in-home services can bring substantial changes in families — and produce more successful outcomes than out-of-home models like foster homes or institutional care.

This isn't counter-intuitive to anyone that works in government.  Trying to get this through people's heads is one of the key roles my agency plays.  Government, and especially the Federal government, knows just how terribly wasteful institutional care is and works hard to try to get public support for these programs.  It doesn't work, because the reaction is always we only want to give services to people that really need it.  Everyone else should just be more personally responsible and the wouldn't need services.

While this may or may not be true, the result of this attitude is that by the time anyone is in bad enough shape that it's evident they really need it and aren't trying to skim from the public purse, it's already a crisis and institutionalization is usually the only option.  Raising eligibility requirements makes this worse.  Lowering eligibility requirements so that more people qualify for cheaper service intervention can save money in the long run and has much higher success rates in turning these people into production citizens.  This will be costly in the short run however, since it requires temporarily paying for the high number of institutionalized people in the system currently as well as the increased benefits.  Since means testing and other forms of eligibility requirements are so popular to save money right now, expect things to move in the opposite direction.

Youth Villages monitors outcomes for every child it serves and allows independent researchers access to its data. The organization reports that, two years after completing its in-home programs, 83 percent of youths served were living successfully in families, 85 percent were in school or had gained a high school or equivalency degree, and 82 percent reported no trouble with the law.

 This is a bigger impact than I'd expect to see, but it's not a field I have direct knowledge of.  In home supports consistently give better results than the kind of interventions that only someone that really needs it would take however.

In Massachusetts, for example, the average cost for Youth Villages’ four- to six-month Intercept program, which currently has a 78 percent success rate in the state, is $18,000 per youth. By contrast, one youth in residential care can cost the state more than $125,000 per year (the average length of a stay) — and the success rate is about 40 percent.

More stark results than in my field, but believable.

Youth Villages’ results are challenging the prevailing notion that states can do better than vulnerable families at raising children.

This may be prevalent among the public, but everything I read and see in government says this is common knowledge.  We are constantly frustrated at how difficult it is to make the system work to provide in home supports and how we can't get the public behind these initiatives.

The problem is that most child welfare agencies are not oriented around returning children to permanent families — and their funding does not lead them to prioritize this goal. Money intended for out-of-home care doesn’t follow the child home. In fact, the federal government dedicates much more money to out-of-home care than it does to programs that provide flexible in-home services like Youth Villages. Large institutional care providers don’t get paid by the government for successful youth outcomes; they get paid to fill beds. Some entrenched interests have even fought to keep Youth Villages from working in their states.

And this is why.  The Feds absorb most of the losses so the Federal bureaucracy is constantly pushing to reform this.  They are constantly failing because states are far more easily captured by local interests than the Federal bureaucracy is.  Since the states administer the programs, and the Feds only supply funding to respect state authority, it is easy for the states to choose to continue failed programs that capture the benefits of them in the form of jobs while pushing the costs onto the Federal taxpayers, who don't have a say in State matters. It doesn't help that Federal match for a lot of these services (I don't know specifically about foster care, but I do for similar types of services in other Departments) means that institutional care isn't much more expensive for states than in home care is.  While institutional care operators are too small of a fish to capture the Federal bureaucracy, they have a lot less trouble swallowing state legislators whole.

In Tennessee, Youth Villages has been credited with playing a catalytic role, helping the state’s Department of Children’s Services to upgrade the foster care system. Help came in 2000 when Tennessee was sued by a group called Children’s Rights which alleged, among other things, that the state placed far too many children in institutional care. (Many states are today operating under court oversight because their child welfare systems fail to provide safety and permanency for children.)

This is common looking at state governments. Often it takes a lawsuit to eliminate the influence of local interests.  Sometimes these are initiated by the Feds, though not in this particular case.

This is a topic that frequently drives me nuts in government so I thought I'd point it out as a good example.  It's also closely related to things I see in my job.  There's been a lot of public sector bashing recently as a result of the Wisconsin union stand off.  This links back in with what I know from being a state worker, though one with a lot of political science and historical knowledge, that the government's is all kinds of messed up, but we know this is due to impossible demands from a public which refuses to listen to us and instead listens to people who are ideologically opposed to government and have no idea what is wrong with it.

Our problems are that we can't get decent oversight of programs at the level of government that pays for it so states have an easy time of internalizing benefits while externalizing costs.  We also know that pressure on government to cut budgets often leads to inefficient allocation of resources because the only way to do this that matches the political cycle is through activities like raising eligibility requirements and restricting optional programs like home care.  We can't touch the most expensive parts, such as institutional care, since the public demands services for the very worst cases, which are also the priciest.  What this results in is a bunch of people being permanently worse off in life because they never get the intervention that could have prevented them from ever reaching rock bottom and they instead cost us a fortune because once they hit rock bottom they end up in this kind of massively expensive mandated care, that leaves most of them an unemployable mess for most of their lives.  It's fixable, but it takes more funding and more rationalized government.  Try to divide authority and cut funding, and the result will be continued growth of bureaucracy, failed programs, and increases in expenditure anyway.  Pay what it takes to do it right, and we'll all at least benefit.