Contracting in Illinois' Child Welfare System
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. But it is only in the last few years that substantial
progress has been made in bringing permanency to the lives of thousands
of children who otherwise would have spent their childhood in foster care.
Illinois has led the nation in this trend for the past two years, and
was recognized in both 1998 and 1999 by the White House's Adoption 2002
Excellence Award program for dramatically improving the number of children
moved into permanent homes.
introduced Performance Contracting in 1997. Since then, the program has
played a critical role in moving Illinois from one of the nation's lowest-performing
child welfare systems in moving children to permanency to a national leader.
That is one reason why the Department's Performance Contracting program
was listed among 10 recipients of the prestigious Harvard Innovations
in American Government Award in 2000. The national award program, funded
by the Ford Foundation and administered by Harvard University's Kennedy
School of Government in partnership with the Council for Excellence in
Government, is noted for its record of selecting outstanding programs
that can be easily duplicated. More than 85 percent of the programs receiving
Innovations awards over the past fourteen years have been replicated by
other government agencies. (Visit the Harvard Innovations in American Government web
Illinois' innovation in contracting for child welfare services, it is
first important to get a sense of the challenges that faced the state's
child welfare system during the mid-1990s.
the commitment to permanency is a long-standing one, most states struggled
in the early 1990s to make good on the promise. 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-the highest prevalence
rate recorded this century.
the magnitude of the problem was much greater. There were 17.1 foster
children for every thousand -- the highest prevalence rate in the nation.
During this time, tensions were understandably high. Foster care growth
was eating up far more of its fair share of state revenues. Workloads
of 50 to 60 children per caseworker were commonplace, and there were routine
calls to dismantle the agency. It was obvious that change was long overdue.
Although the explosive growth in the Illinois foster care system ended
in 1997, stabilization of intake was not enough. Illinois' substitute
care system should have been half its actual size in 1997. In the course
of analyzing caseload dynamics, it became clear that children were staying
far too long in substitute care. As a result, the median length of time
entering children stayed in care had increased from eight months in 1986
to 56 months in 1996. Addressing the permanency backlog became the top
priority for Illinois' child welfare system.
placements into legally permanent homes is no simple matter after years
of inattention by the child welfare system. As with other states, the
growth in caseloads brought with it an expansion of the level of child
welfare services provided by the private sector. With so much of Illinois'
child welfare system privatized, the renewed focus on securing permanency
for children posed unique challenges. Longitudinal data collected by the
Department showed that the rate of children exiting the system fell below
the rate of new cases coming in system-wide.
part of the problem was inherent in Illinois' basic contracting structure.
Contracts based upon a fee-for-child payment can undermine permanency
because once the child welfare issues have been resolved and the child
is ready for permanency, an agency faces losing revenue unless the child
is replaced with a new referral. This dynamic leads to the predictable
practice of focusing the work on maintaining kids in care rather than
aggressively pursuing permanency.
Contracts in Illinois sought to change this on two levels. First, the
contracts made significant investments in activity that would support
permanency-additional permanency focused staff positions; resources enabling
providers to begin serving children more quickly upon placement; more
resources for supporting children returning home to their biological parents;
and the flexibility to use administrative funds to support different models
of child welfare service provision. Second, and perhaps most importantly,
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.
was accomplished through redesigning how agencies receive new cases for
placement services. Upon the implementation of Performance Contracting
in Cook County, all agencies were required to accept 24 percent of their
caseload in new referrals. Added to this was the expectation that all
agencies would move 24 percent of their caseload to permanency-an outcome
expectation reflecting a nearly threefold improvement over what was then
a system-wide average of eight percent.
and potential consequences were immediately apparent to contracted agencies.
By exceeding the 24 percent benchmark in permanency expectations, an agency
could secure caseload reductions without a loss in revenue. Falling short
of the benchmark meant serving more children without a change in the contract
the Trend in Permanency
The success of the Performance Contracting initiative is best evaluated
using three important measures: the rise in adoptions, the rise in subsidized
guardianships, and the rise in over all agency performance levels since
the program's implementation.
success in steadily increasing the number of finalized adoptions has brought
the state a great deal of national attention. During state fiscal year
1999, more children were moved to adoption than in the combined previous
seven-year period of 1987 through 1994. President Clinton's Adoption 2002
Initiative has now twice recognized Illinois as the nation's leader in
securing adoptions for children. The stated goal of this initiative was
for states to double the number of completed adoptions by the year 2002.
Illinois managed to nearly pass this goal just in the first year, increasing
the number of adoptions from 2,229 in state fiscal year 1997 to 4,293
in 1998. During state fiscal year 1999, Illinois again almost doubled
the previous year's performance by finalizing 7,315 adoptions. Although
Illinois posted just over 6,200 adoptions by the close of the state fiscal
year on June 30, 2000, this represents a slight improvement in the overall
adoption rate as the foster care population continues to shrink. In all
three years, the majority of the increase in adoptions has been realized
out of performance contracts. (
View a chart of wards moved to permanency through adoption
and guardianship, 1986-02)
guardianship is a new permanency option in Illinois made possible through
a Title IV-E waiver from the federal government. The waiver was conceived
of and designed to create a permanency option for relatives committed
to the long-term care of children placed in kinship care. The combined
effect of this permanency option and performance expectations has been
remarkable. During state fiscal year 1998, 1,276 children were placed
permanently with relatives. During state fiscal year 1999, this number
nearly doubled to 2,199 children, with an estimated 1,700 by the end of
state fiscal year 2000. As with adoptions, the majority of these subsidized
guardianships were realized out of performance contracts.
the implementation of the Performance Contracting initiative in Cook County
relative care, the average permanency rate for agencies was just 6.7 percent.
By the end of state fiscal year 1998, the system-wide average for relative
care jumped to nearly 20 percent, with some agencies achieving results
as high as 44 percent. This strong showing continued into the second year
of performance contracting which expanded to traditional foster care in
Cook County, and in a limited way, relative and traditional care in the
rest of the state. During fiscal year 1999, system-wide performance in
Cook County relative care climbed from 20 percent to nearly 30 percent,
while the permanency rate for traditional foster care climbed from 14
percent to 24 percent. By the end of state fiscal year 2000, the system-wide
average permanency rate for Cook County relative care contracts continued
to improve to 34 percent while traditional foster care finished at 25
implementation of Performance Contracting, the dramatic increase of children
moving to permanency has been nothing less than stunning. The impact on
Illinois' caseload alone is striking-a 40 percent decline from a peak
of over 51,000 children in care to nearly 30,000 in just three years.
View a chart comparing substitute care and Adoption/Guardianship
as these gains are, the single most important accomplishment of Performance
Contracting is the reinvestment made possible through consistent gains
in permanency. These reinvestments support better service delivery for
children and families in Illinois' child welfare system. For three consecutive
years, the Illinois Department of Children and Family Services has used
the savings generated by declining caseloads in Cook County relative care
to fund contracted caseload reductions of 10 percent (state fiscal 2000)
and now over 20 percent (state fiscal year 2001).
when the Performance Contracting initiative was first launched for Cook
County relative care in July of 1997, caseloads were funded at 25 children
per worker-the highest caseloads in the state. By the end of the first
year of the initiative (state fiscal year 1998) it was possible to lower
the contracted caseload from 25 children per worker to 22 children per
worker within existing spending levels. By the end of the 2000 fiscal
year, average caseloads were lowered to 18 children per worker-now the
lowest in the state. These gains were made possible because of two dynamics:
the requirement that non-performing agencies give up contract-level and
caseload; and the slowdown in new cases coming into Cook County for relative
As this population
declines and is concentrated with performing agencies, the savings from
the smaller contracted caseloads of non-performers become available for
reinvestment. The structure of performance contracts allows capacity to
be easily transferred from the worst performing agencies to the best performing
agencies without additional cost. The success of these contracts made
what would otherwise be an expensive and unwarranted move a reality. Lowering
caseloads in this way is an investment in the future that will continue
to support improved work in serving Illinois' children and families.
a child welfare system consists of more than just a contracting framework.
Although child welfare financing plays a central role in how service providers
target and secure specific outcomes, they are actors within a much larger
system. Performance Contracting worked because Illinois had laid important
ground work in making improved performance possible.
laws had to be changed so that undue hesitancy about terminating parental
rights was removed as a barrier to adoption. In 1997, the Illinois General
Assembly passed comprehensive legislation ("Permanency Initiative"),
which among other things, eliminated "long-term foster care"
as a permanency goal, reduced permanency planning timelines to one-year,
and directed the Department to engage in concurrent planning to help achieve
permanency at the earliest opportunity.
would not be possible without the partnerships we have been able to forge
with the Court. Under the creative leadership of the Presiding Judge of
the Cook County Child Protection Division, the Cook County Juvenile Court
has taken the lead establishing the legal groundwork for moving Illinois
wards into permanent homes.
the Department has supported a real partnership with private service providers.
Conversations with providers have consistently emphasized sharing information
on system performance, barriers to improving, and the ongoing challenges
inherent in serving a vulnerable population. By reaching consensus on
outcomes and the importance of results, the Department has been able to
steadily turn improved performance into investments which have supported
the very infrastructure of the child welfare system.