Don't Worry About the Size of the Government

Setting out to shrink the size of agencies at all costs can actually raise them—as Louisiana's child-welfare system found.

Which is better: More government or less?

Most people have an ideological answer ready, but from a practical standpoint, it’s a ridiculous question.

Better is better.

When I met Suzy Sonnier, secretary of the Louisiana Department of Children and Family Services, earlier this year, she was facing most government officials’ least favorite task—reducing her department’s budget. I was there as a consultant for the state, to help her meet a deficit-driven directive to cut spending in most state agencies by roughly seven percent.

This was a particularly steep challenge for DCFS. It had already endured cuts of 12.4 percent in recent years—more severe than the state as a whole. Most of these cuts were absorbed by “back-office” staff, but some came in reductions in front-line caseworkers, who deal with child abuse, troubled youths, and kids stranded in the no-man’s land of foster care. These aren’t problems that go away just because government funding to address them does. In fact, they tend to get worse.

Sonnier, like an increasing number of children’s-services leaders, tried to chart a path between continuing to pour money into remediating these problems and simply cutting services short-term just to watch problems fester (and costs rise.) This vision required bringing together the many disparate government agencies that currently attempt to serve families with needs ranging from lack of health care to poor nutrition to behavioral or substance-abuse problems—something often referred to in the field as a “Coordinated System of Care” (CSoC). In some ways, this is simply the latest iteration of a concept called “No Wrong Door.” Under No Wrong Door, no matter where a family goes for help—seeking food stamps, or Medicaid, or income assistance, or help paying for fuel oil—they get the help they need, instead of being shunted off to the “right” agency or phone number in the kind of unending loop with which most of us are all too familiar. What’s more, they get all the help they need, not just whatever they were originally calling about.

In Sonnier’s vision, caseworkers charged with coordinating this CSoC for any given child or family wouldn’t just act as bureaucratic traffic cops, improving coordination between various government silos and programs. Instead, they would act as a market-empowered consumer, strategically “buying” programs and services for families from amongst the various governmental and non-governmental options. (As my colleague Jone Bosworth, who ran children’s agencies in several states, points out, governments have turned to private providers for the bulk of human-services delivery for decades.)

“No one’s looking at holistic needs of the family any longer,” Sonnier told me. “The issues are systemic in the family—but you cannot get a systemic response.” Her real goal was to focus on the front end of the system—to prevent kids and their families from needing further services. Sonnier’s predecessor, Ruth Johnson, who now oversees a wider range of state government operations in Louisiana, called it “No Wrong Door on steroids.”

For instance, roughly a quarter of Louisiana’s foster-care placements are for fewer than 30 days. Why are these children being placed in foster care at all? If something could be done beforehand to avoid removing them from their homes, it would save a decent amount of foster-care expense. The issues are starker, and the costs higher, with instances of systemic failure like school dropouts, child abuse, and delinquency.

The problem is how to identify those who haven’t fallen into trouble yet and keep them from doing so. Sonnier believes that a coherent early-warning system needs to be local, rather than state-level. This requires better integrating child-welfare services with schools and the public-health system, as well as nonprofit social-service agencies and local churches. These are the organizations and individuals most likely to come into regular contact with kids, notice a problem such as family break-up, parental neglect, substance abuse, trouble with schoolwork—and to be in a position to evaluate whether additional assistance could prevent larger social consequences.

Louisiana has some limited examples of comprehensive services provided through schools—most notably, the Mahalia Jackson Early Learning Center in New Orleans. The state has also established an effort called Families In Needs of Services, in which some delinquency or abuse proceedings are diverted to an administrative process for determining needed services. But because it’s run by the court system, it mostly involves kids and families who are already in trouble, and it’s far from comprehensive. As Sonnier sees it, the challenge is how to formalize this system and work proactively in the executive branch rather than just when a kid winds up in the courts.

There are several lessons in this vision for government programs more broadly, which I’ll explore in future posts.

1. Modernization: Government solutions generally involve putting individuals into big one-size-fits-all programs, historically in institutions. Industrial-era know-how told us that factory economies of scale produce the most efficient outcomes. Information-age know-how ought to be telling us now that individualized solutions are doable, more effective, and often even cheaper. This generally means community-based solutions—and can suggest increased non-governmental service delivery, such as involving faith-based organizations and private businesses, an area in which conservatives like Paul Ryan are on to something.

2. Competition: While the private sector can be a good mechanism for service delivery, privatization without public oversight is no panacea. Florida, for example, has been a leader in promoting the community-based care model, but largely as a veneer for privatizing children’s services; the Sunshine State also has long been notorious for failing to prevent child abuse.

3. Prevention: We know from fields as diverse as health care and crime control that preventing ills is cheaper, not to mention more desirable, than curing them. But we tend to ask government to solve problems once they ripen, instead of preventing them. We could suppose a number of reasons for this: a political system designed to deter governmental intervention until problems are so bad as to require it, ideological objection to government doing anything that it doesn’t “have to” do, a belief that individuals should succeed or fail on their own—at least, until their failures impinge on the rest of us and need to be cleaned up. Whatever the reason, the result is higher cost and more government, not less.

In contrast, Child Welfare Demonstration Projects in several states have shown that investing heavily in prevention and community-support services reduces future child-welfare costs—not to mention maltreatment, trauma, and removal from home. A recent analysis found that Healthy Families Florida, a home-visiting program, prevented child abuse and neglect in 98 percent of participating high-risk families at a cost of $1,800 per year per child. In contrast, conservative estimates put the cost to taxpayers of child welfare, hospitalization, special education, and juvenile-justice services for an abused child at $72,709 per year.

Shifting funding from back-end remediation to front-end prevention, however, looks an awful lot—at least in the short-term—like “new” money and “new” government programs. That’s practically heresy today. But as the old TV ad used to say, you can pay now or pay later: A former state prison commissioner told me recently, “Corrections is the dumping ground for all the problems we’ve failed on”—and Corrections ain’t cheap. But in an exercise like the one Sonnier found herself in—and a larger political environment—focused primarily on budget cutting and short-term benefit, there’s little real room for upfront investment (“more government!”) even when it winds up costing less in the long-term.

The path Louisiana ultimately chose was to focus on reducing caseworker turnover and enabling caseworkers to more frequently stick with a family and address its full range of child-welfare (if not broader) challenges—something like No Wrong Door, but perhaps on Red Bull instead of steroids. Studies show that children with more than one caseworker are almost 60 percent less likely to receive a permanent placement, thereby costing at least $13,000 per year. At current caseload levels, and tossing in the $23,000 cost of training a new caseworker, we calculated that each child-welfare worker retained reduces taxpayer costs by roughly $50,000 per year. That’s an improvement—but not the proactive, and ultimately more cost-effective, solution that Sonnier, Johnson, and others ultimately envision.

What would it really mean to take money out of cleaning up our messes and instead spend it on preventing them? One model is Maine, where the legislature decided to reduce the role of expensive institutions in handling at-risk youth. That slashed the number of children in state custody from more than 3,000 children, with 24 percent in residential care, to fewer than 2,000 children and only 10 percent in residential care. Over the next two years, $4 million in savings were reinvested in providing a variety of local, individualized support services, keeping more kids in their own homes and producing additional savings of $19 million, roughly a 2.5:1 annual return on investment. Analysts in Washington state projected the same rate-of-return.

Ultimately, smart costs less. You want to cut government? Make it work better.