Reforms to U.S. Child Welfare System Could Reduce Costs and Improve Outcomes

Expanding prevention and treatment services in the U.S. child welfare system could improve the lives of children and reduce total lifetime expenses of such services by 3 to 7 percent, according to a revised RAND Corporation report.

RAND researchers developed a quantitative model that simulates how a representative group of 24 million children born between 2010 and 2015 interacts with the country's child welfare system from birth to age 18. The researchers considered options that increased both the quantity and effectiveness of services delivered to families. The model marks the first-ever attempt to integrate risk of maltreatment, detection, paths through the system and consequences to predict the impact of policy changes.

Every year, about 3 million children in the U.S. face either abuse or neglect, according to the Fourth National Incidence Study of Child Maltreatment. The child welfare system aims to help those who encounter such harm. Services are provided at the community level and include investigating reports of neglect or abuse, providing family preservation services, and placing kids in foster care or care by relatives.

RAND researchers analyzed the effects of three common strategies for improving the child welfare system. Those strategies are preventing maltreatment of children so that they don't need to enter the child welfare system, supporting family preservation efforts that keep children in the system with their parents, and encouraging care by relatives (kinship care) when out-of-home care is necessary.

The 3 to 7 percent savings equates to a reduction of approximately $5.2 to $10.5 billion in lifetime costs for the 24 million children considered by the model. Lifetime costs are the sum of expenses associated with preventive and child welfare system services provided to children, such as costs of an investigation of a maltreatment report or a temporary foster care placement.

Beyond these cost reductions, the RAND model estimates that a set of policies aimed at increasing both the number and the effectiveness of prevention and kinship care services would yield numerous additional benefits.

The estimates show that cases of maltreatment would decline by about 2 to 4 percent, substantiated cases of child maltreatment would decrease by 1 to 3 percent and the likelihood of negative long-term outcomes (homelessness, underemployment, criminal conviction and substance abuse) would decrease by about 2 to 6 percent over a child's lifetime.

Researchers say it is not surprising that increasing both prevention and treatment could reduce maltreatment, improve system experience and improve young adult outcomes. But what the RAND analysis revealed is that these improvements can be achieved with lower lifetime costs for the group of children considered by the model.

“From a public health perspective, these results are very good news,” said Jeanne Ringel, lead author of the report and a senior economist at RAND, a nonprofit research organization. “We find that only by increasing both prevention and treatment (in the form of kinship care) are all policy objectives met.”

Those policy objectives are reducing maltreatment, improving the experience of youth in the system, improving outcomes in young adulthood and reducing lifetime costs for the group studied.

The RAND report was initially released in May, but researchers withdrew it to conduct further analysis after other child welfare researchers pointed out that there might be better data to use for several of the inputs used in the model—specifically those related to lifetime rates of child maltreatment and resulting engagement with the child welfare system.

RAND researchers further reviewed the literature and conducted secondary data analyses, then used revised model inputs to more closely reflect lifetime rates. These revised inputs did raise the baseline rate—those reflecting the current status quo—generated by the model. In addition, researchers used the opportunity of revising the report to make several other changes, including improvements to the process used to calibrate the model, adjustments to the cost calibration points, use of a different discount rate for calculating costs, and correction of minor programming errors identified during the code review.

As a result of these changes, the model's estimation of the magnitude of the effects of policy changes on various aspects of the system (e.g. maltreatment, referrals) has changed to some extent. However, the pattern of results and the basic story they tell has remained the same.

Support for the study was provided by the Pritzker Foster Care Initiative. The report, “Improving Child Welfare Outcomes: Balancing Investments in Prevention and Treatment,” is available at www.rand.org. Other authors of the study are Dana Schultz, Joshua Mendelsohn, Stephanie Brooks Holliday, Katharine Sieck, Ifeanyi Edochie and Lauren Davis.

The project was conducted under the auspices of four units at RAND: Health; Labor and Population; Education; and Justice, Infrastructure and Environment.