Summary: Faced with escalating costs and a poorly integrated patchwork of services, state and local child welfare agencies are considering new strategies to meet the needs of the nearly 1 million abused and neglected children in the child welfare system. Managed care in child welfare, like its counterpart in health care, is seen as a way to improve access to care while controlling costs. By coordinating the delivery of only those services that are necessary and appropriate, managed care strives to reduce the inefficiencies of the traditional fee-for-service system while providing quality care. Nationwide, public child welfare agencies have implemented managed care projects in 13 states. with new initiatives planned in more than 20 others. Currently, only about four percent of the nation's child welfare cases are being served under managed care. In general, public agencies have contracted with experienced nonprofit, community-based providers to implement managed care initiatives. The majority of ongoing child welfare managed care initiatives have established a capitated payment system. As more public child welfare agencies move toward managed care, public officials and their private contractors face several challenges. First, as they develop and implement a capitated payment method, agencies need to find ways to maintain adequate cash flow. Second, agencies face the difficult task of developing sound management information systems, which are critical to establishing an appropriate capitated payment rate and a performance-based monitoring system. Third, both public and private agencies face new responsibilities as some traditionally public functions shift to the private sector and new roles emerge.
