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Monday, October 5, 2015

Taking the cash stream out of streamlining

DCYF likely to bring some services back in-house as part of an overhaul
When Rhode Iland's financially ailing child welfare system decided to purchase most of its services from two private nonprofit networks three years ago, officials praised the new "system of care" as a model for streamlining services and cutting costs. A little more than three-and-a-half years later the continuation of the practice appears unlikely.

After years of cost overruns, Jamia R. McDonald, chief strategy officer and the agency's new de facto head, no longer believes that networks are the most efficient way to deliver services. Instead, it's likely that the agency will bring some services back in house and bid out others individually. "The theory was these administrative efficiencies could be gained by overseeing multiple activities .... The agency didn't posture itself well to manage that. We moved administrative oversight. We didn't restructure in any way in-house, and we also didn't create any oversight that ensured [the networks] delivered," McDonald said.

"When you have to change a system, I don't think you turn it off one day and turn on another. If we really want to think differently, the longer we bind ourselves into certain activities, the less opportunity we have to pivot," McDonald said.

Marty Sinnott, chief executive officer of Child & Family Rhode Island and head of the Rhode Island Care Management Network, put it more bluntly: "The contracts were poorly designed and poorly written right out of the gate. The networks have at least kept the lid on what is a poorly designed and poorly managed child welfare system," Sinnott said. "The system of care contracts are neither the problem or the solution. They have functioned under bad public policy and bad public leadership."

In 2012, the state Department of Children, Youth and Families signed three-year contracts with the two providers. The networks assign children under state care to residential and congregate care and subcontract with shelters and other service providers — and have consistently overspent their budgets. There are currently 3,095 children in DCYF care, a number that has grown over three years. (Sinnott pointed to a 30-percent increase over three years in the number of reports of abuse and neglect.) The contracts were set to expire June 30. After months of negotiations, they have been extended, but only for six months.

The fact that the DCYF appeared poised to make changes is not unexpected. In July, Governor Raimondo promised that the "dysfunctional" agency would be overhauled amid a litany of problems, including millions freely spent on contracts with no performance management, and state payment and procurement procedures that had been skirted.

The large network contracts are not the only DCYF agreements headed for change. McDonald said the agency has allowed some contracts for "redundant" services to expire, and other contracts have been reduced. "There were examples where we bought the same service two or three times, and we never used any of those vendors so there was no point in extending," McDonald said, referencing an issue highlighted in an audit of the DCYF this summer.

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