Serving more youth with the same amount of money (or less)

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Serving more youth with the same amount of money (or less)

This edition is online optimized.

To request a print copy, please email Communications@ChoicesTeam.org

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In the United States approximately 50,000 children per year are admitted to residential facilities.

According to a US Surgeon General’s report, one-fourth of

the nation’s budget for children’s mental health is spent

on residential treatment (not including child welfare or

other system budgets that make referrals to residential

treatment).

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Overview: How We Got There

Residential treatment is reserved for children who have exhausted all other options of community-based care.

Often, children in residential treatment centers have been in several different foster homes and/or group homes, and an institutional setting was seen as the last resort. This paper examines how some communities are finding success with care management opportunities that help them:

Serve more youth in the community

• Reduce expenses for out-of-home placements and

• Reduce lengths of stay in institutional settings such as residential treatment centers.

Currently, many state budget agencies are requiring administrators to look at primary expenses, such as

Medicaid, and determine ways to serve the same number of people (or more) with less money. Indiana is one of a handful of states that has stayed ahead of the budget shortfall and continues to operate in the black.

Many factors contribute to Indiana’s successful fiscal

management, but its child welfare system has seen remarkable

change in a short amount of time.

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Indiana has experimented with and implemented several reforms. One saves the state an average of

$3 million for every 100 youth served.

The savings is attributed to focusing on youth with the most intensive needs. State budgets typically follow the common rule of thumb, the Pareto principle, often called the 80/20 rule – kids with the highest needs consume the most energy and dollars. Specifically in child welfare agencies, 80% of the dollars are spent on 20% of the kids. Those dollars are often used for costly out of home placements that are no longer considered best practice.

Unfortunately such placements are a reality for the many kids stuck in institutional care settings for years because they have nowhere else to go.

The child welfare system is being forced to reform and is experiencing some of the same growing pains as the medical industry did just a couple of decades ago as illustrated in the story about Katie Beckett. Child welfare funding is often tied to Medicaid or Waivers with specific regulations on what can and cannot be purchased. This is the beginning of budget inefficiency. System flexibility and access to community-based services are keys to

developing system efficiency.

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One Girl Changed the Face of Healthcare

In the early 1980s, the medical industry began shifting from inpatient care to outpatient care. One case in particular marked the beginning of this movement. Katie Beckett contracted viral encephalitis when she was five months old. By the time she turned three she had spent two years of her life in a hospital, and doctors weren’t sure if she would live to be 10. Her private insurance ran out, so state Medicaid dollars began to cover her expensive treatments and long-term hospital stays.

Katie’s family wanted her home, but strict Medicaid rules would only allow payment as long as Katie lived in the pediatric intensive care unit at the Cedar Rapids, Iowa, hospital she had called home for most of her life. Katie’s doctors and nurses believed her parents were capable of caring for Katie, but state regulation didn’t allow for it.

This was in 1981. Katie Beckett recently turned 32 – at home.

It took massive system reform to change the Medicaid system so Katie could go home. On November 10, 1981, then-President Reagan said, “By what sense do we have a regulation in government that says we’ll pay $6,000 a month to keep someone in a hospital that we believe would be better off at home?”

The medical industry has shifted from stringent inpatient care to outpatient care where recuperation is primarily done at home. Not only was it cost effective for the government to reform because Katie’s care was cheaper at home than in the hospital, but Katie got to celebrate birthdays and holidays at home instead of in an institution.

“By what sense do we have a regulation in government that says we’ll pay $6,000 a month to keep someone in a

hospital that we believe would be better off at home?”

-Ronald Reagan

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System Flexibility

System flexibility is in some respects an oxymoron. The system is purposely rigid in an effort to eliminate dishonesty. Seldom can government systems implement swift changes. Many communities have developed mechanisms to increase flexibility so families can access help in the moment and not have to wait for hours, days or even months.

For example, Jonathan Walters of GOVERNING spotlighted Los Angeles County’s child welfare agency in a recent article about no quick fixes for child welfare reform. Los Angeles County recently experienced a string of nearly 40 child fatalities, 17 of them in 2009. LA child welfare fields upwards of 200,000 referrals to its child protection hotline annually. Los Angeles County is not unique. All large systems struggle with a lack of resources. All large systems struggle to balance family preservation with removal.

Meanwhile they have received back-to-back budget cuts of nearly 20%. Walters’ article points out that Los Angeles has made remarkable progress on reducing the number of children in foster care, from a high in 1997 of 52,000 to just under 20,000 in 2009 by using community-based programs.

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Michael Rauso and colleagues from the Los Angeles County Department of Children and Family Services compared the placement outcomes and associated costs of children who graduated from a community-based program (CBP) in Los Angeles County to similar children who were discharged successfully from residential care settings. Their analyses found that children discharged from community-based care:

Were 3.5 times more likely to have case closure within 12 months (58% versus 16%)

• Experienced 100 fewer total mean days in out of home placements (193 days compared to 290)

• Cost the community 60% less than children discharged from congregate care (Mean post-discharge cost for

• the CBP group was $10,737 compared to $27,383 for the congregate care group)

Communities across the country are experiencing similar results with community-based care. It’s widely recognized as the preferable solution because it’s not only better for the kids and families, it saves money. The Dawn Project in Marion County Indiana was one of the first community-based programs in the country tasked with reducing the number of youth being sent to institutions. An important part of Choices’ model, which is nationally recognized for keeping kids at home and in school, is money – not how much, but how it’s disbursed.

Los Angeles reduced the number of children in

foster care from a high of 52,000 in 1997 to just

under 20,000 in 2009.

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The Dawn of a New Day

Youth served in the Dawn Project, the ones in the 20% category mentioned previously, are often involved in two or more child-serving systems: child welfare, juvenile justice, mental health and special education.

Each system was pouring a fair share of its budget into the same kids. Indiana created Choices, Inc., a nonprofit, nonprovider of services, to operate the Dawn Project. Choices serves as an unbiased resource to blend local, state and federal dollars and NOT be a provider of services. Choices manages a per youth, per month case rate and subcontracts with hundreds of community providers to serve youth in the. The case rate is the primary factor in building system flexibility. The case rate covers all services – residential treatment, therapeutic foster care, therapies, medications, transportation – absolutely anything the child needs, including discretionary funds for emergencies. This model shifted resources so that the system is extremely flexible to meet a family’s needs.

A comparison of data from the Indiana Department of Child Services (DCS) Region 10 (Indianapolis, Marion County) and Choices shows the funding model is effective for both families referred to the program and DCS. Note: DCS contracts with Choices, so the following DCS data includes youth served by Choices.

Choices serves youth with extremely complicated needs and serves a higher proportion of youth in residential treatment, foster homes and group homes than DCS. From November 2008 through January 2010, the Dawn Project had a higher proportion of youth in residential treatment, foster homes

(particularly therapeutic foster homes), and group homes than DCS. This is not surprising since the Dawn Project was originally designed to serve the most challenging youth.

In Home Relative Home Foster Home Residential Group Home / Other

Youth Living Arrangements Average Number of Out of Home Placements

50%

25%

Despite serving youth with more intensive needs, from November 2008 through January 2010, Choices youth averaged 1.77 out of home placements while DCS averaged 2.64 out of home placements.

Average Days in Out of Home Placements

Moreover, from November 2008 through January 2010, youth in Choices had an average length of stay in out of home placements of 222 days, while DCS had an average length of stay in out of home placements of 585 days.

2.5

0.0

600

0 Choices

DCS

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Increased Access to Services

Youth with long histories of system involvement, including hospitalization, multiple foster homes and group homes, are so deep into system resources that it’s difficult to back out of that level of intense services. Indiana’s DCS has implemented a process to allow for cross-system care coordination (DCS’ service standard for care coordination) to help increase access to services that are individualized and community-based.

A child welfare worker who must balance government mandates with family engagement often struggles with how to back reduce intensive, high-cost services because of the amount of time needed to do so. The mandates are a necessary evil because they too often cause case managers to err on the side of caution, i.e., restrictive care for youth who may be a risk. Care coordination – as opposed to case management – is the practice of creating a flexible system that allows for a unique mix of services for each youth. Indiana’s care coordinators, employed by Choices, have low case loads that afford them the time it takes to build sustainable treatment plans. Nonprofits typically have more flexibility than

government systems.

An example of this flexibility is Choices ability to authorize services, and pay for them, within five minutes. If the child and family team approves the need, there is no other committee review. Families need access to services in the moment, not in seven days to see if things change.

Lower case loads afford care coordinators the time necessary to develop

relationships with a broad array of providers to help meet the needs of the family in the moment. The child and family team is the core vehicle care coordinators use to increase access to services for families. The broad array of providers is the engine, and the families are the drivers of this process. Families can access any service they need. For example, in a typical case management scenario, at 10 p.m. when a child is threatening to harm him/herself or someone else, law enforcement would be called.

In contrast, the care coordination process includes a child/family specific, ready to implement crisis plan so families have multiple resources and know how to access help before they feel forced to involve the police or visit an emergency room.

The Choices’ Community Provider Network includes a broad array of resources, from evidence-based practices to individualized client contracts for mentoring and transportation. No formal government process is required for individual providers to begin serving families. Choices creates an individualized contract, runs a background check and can begin paying immediately for services provided. In 2010, nearly 800 agencies and independent consultants provided services to 320 youth and their families. Choices has 66 defined service codes, and within each service code care coordinators can authorize services to multiple providers. It’s a diverse, rich network that gives families voice and choice. In contrast, Indiana’s child welfare system has approximately 32 defined service categories – one of which is cross-system care coordination – and issues requests for proposals for these services bi-annually.

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Managing Tensions

Government systems fight a tension between paying now or paying later. Too often, funding is only accessible for the youth and families in which the youth’s problems have become so severe that few alternatives exist.

Preventative care is a luxury that many states cannot afford. Authorizing and pre-authorizing care changed the medical field from a hospital driven approach to a patient-focused community-based system. Similar changes are occurring – and needed – in the children’s mental health or child welfare field. For children with emotional problems, even severe ones, hospitalization is not a long-term solution. Medicaid waivers to help pay for community alternatives are possible, and a shift in funding to private, nonprofit entities has proven to increase access to community alternatives that are sustainable past system involvement.

Youth referred to Choices have typically spent 270 days in residential treatment, and have lived in a dozen or more foster homes. The main difference between youth referred who are living in residential treatment versus youth living in the community (such as therapeutic foster care) is simply that – where they are living at the point of referral. They have the same number of needs, but youth who are living in the community show larger gains in meeting their treatment goals, and increasing their strengths.

Another important distinction between these two placement categories is that DCS spends 45% less ($35,000 per youth) when they refer the youth who are at risk of going to residential treatment to Choices in lieu of residential.

In 2009, DCS referred 102 youth to Choices’ Dawn Project who were directly diverted from residential treatment.

The only true difference between these two groups was whether youth had a history of residential treatment. Of these referrals, 83% of youth referred before residential remained out of residential. This not only leads to better clinical outcomes for youth, but it also results in a substantial cost savings to DCS.

Service Cost Per Day for DCS Length of Stay (Days) Total Cost per Youth Episode

Residential $293.24 270 $79,174.80

Choices $126.94 341 $43,286.54

Savings per youth= $79,174.80 (cost of residential treatment episode) - $43,286.54 (cost of a Dawn episode) =

$35,888.26.

Savings to DCS = $35,888.26 * 85 youth = $3,050,502.10

In 2009, Choices saved the Indiana Department of Child Services more than $3 million by successfully diverting

youth from residential treatment.

Community Placement

Residential Placement

Intake Discharge Intake Discharge 7

9 7

11

7 8

12 10

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Community based care is a viable option for serving youth with intensive needs. Keeping kids at home and in school is

not only best for families but best for taxpayers. States like Indiana have found creative solutions to budget shortfalls,

in part by decreasing the use of residential treatment. In one year, Indiana decreased the number of youth in residential treatment from 1,600 youth to 800 youth.

For more information on Choices data visit:

www.ChoicesTeam.org

To access statistics for the Indiana Department of Child Services visit:

www.in.gov/dcs.

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STAYING AHEAD OF THE BUDGET SHORTFALL

Serving More Youth with the Same Amount of Money (or Less) Published by Choices, Inc.

2011

This publication is the property of Choices, Inc. and may not be duplicated or modified without the express written consent of the company and authors.

4701 N. Keystone Ave., Suite 150 Indianapolis, IN 46205 www.ChoicesTeam.org

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