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From the files of privatization failures

A story from last week.

State officials have decided to slow the rollout of a controversial overhaul of the foster-care system after the private contractor running a pilot program abruptly pulled out Friday.

Judge John Specia, commissioner of the state Department of Family and Protective Services, said a second pilot of the overhaul will continue but other planned expansions will not move forward until his agency studies what went wrong.

“It would be foolish of us to not look at this situation, look at the contract being terminated, talk to the legislative leadership, talk to the providers and advocates and then fully make a decision about moving forward,” said Specia, hours after receiving notice that Providence Service Corp. intended to opt out of a five-year contract after just 18 months. “That’s necessary at this point.”

Lawmakers said the cancellation of the contract would force them to take a closer look at the overhaul, called “Foster Care Redesign.” There will be no disruption of services for the children, as the state will take over the work after a transition period of at least 30 days.

But the development marked a setback for the “redesign” program, which was approved in 2011 as a way to improve the system without increasing costs.

[…]

“As we move forward, the Legislature should carefully examine whether Foster Care Redesign still represents the best solution to the challenges facing our state’s foster care system,” said state Sen. Charles Schwertner, a Georgetown Republican who chairs the Senate Health and Human Services Committee.

Providence, based in Tucson, Ariz., had been failing to meet some of its performance metrics and recently unsuccessfully sought more money from the state, officials said.

Mike Fidgeon, the company’s chief operating officer, said it had proved impossible to provide services for roughly 1,100 children in the pilot’s 60 West Texas and North Texas counties without spending more than the state had spent in previous years, as the contract required.

“The contract guiding us doesn’t adequately address the needs of the children and families,” Fidgeon said. “The most responsible way forward is to conclude the current arrangement and work to help the Legislature more adequately fund the state’s foster care system.”

Providence started work last February after winning its $30 million annual contract. ACH Child and Family Services of Fort Worth was tapped for a second pilot, in Tarrant and six nearby counties. More contracts were expected to be put out to bid soon.

But Providence struggled from the start to produce better outcomes or even stay afloat financially.

Emphasis mine. Funny how these things work, isn’t it? The free market can always do it better and more cheaply than the government, and spending must always be cut. It would be funny if there weren’t real people – children, to be specific – on the business end of it. The Legislature created this mess as part of its orgy of budget slashing in 2011, the Legislature can figure out how to fix it. See this Observer story from May for more.

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