Privatization in Practice: Case Studies of Contracting for TANF Case Management Pamela Winston Sheen

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Privatization in PracticeCase Studies of
Contractingfor TANF Case Management Pamela
Winston Sheena McConnellAndrew BurwickIrma
Perez-Johnson
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Overview

• Background
• Study Objectives and Design
• Key Findings
• Key Lessons Learned

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Privatization Has Changed in Scale and Scope

• Increased After Welfare Reform
• Contracts Account for 13 Percent of TANF Funds
  Spent on Services and Administration (GAO)
• Growth Likely to Continue
• Includes TANF Eligibility Determination

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Study Objectives

• Describe What, Why, To Whom, and How Services are
  Privatized
• Assemble Lessons Learned

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Case Study Sites
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Stakeholders Interviewed

• Public Agencies Contracting Out
• Public Agencies Involved in TANF, Food Stamps, or
  Medicaid Case Management
• Contractors
• Public Employees Unions
• Advocates for TANF Recipients

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What is Privatized?

• Two models
• All TANF Case Management and Processing,
  Including Eligibility Determination
• Employment-Related Case Management Only

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Why Privatize?

• Potentially Higher Quality, Lower Cost
• - Competition
• - Flexibility of private agencies
• - Choice
• Pragmatic/Political Factors
• - Need to add capacity quickly
• - Facilitate change in philosophy
• - History of contracting out
• - Limit government growth

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Who are the Contractors?

• Three Types
• - National for-profits
• - Affiliates of national nonprofits
• - Local nonprofits
• Collaboration Is Common
• Differ in Mission, Resources

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How Much Competition?

• Degree of Competition Varies
• - Quasi-sole source
• - Single or few bidders
• - Multiple credible bidders

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Measuring Performance

• Setting Effective Performance Measures is
  Difficult to Do
• Tension between Creating Performance Incentives
  and Creating Unintended Consequences
• In the Study Sites
• - Number of measures varied
• - Outcome and process measures used

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Contract Type Matters
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Monitoring to Uphold Accountability

• Three Types of Monitoring Needed
• - Service quality
• - Program compliance
• - Fiscal integrity
• Responsibilities Shared Among Public Agencies,
  Contractors, and Others
• Balancing Costs and Benefits of Monitoring

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Service Provision Challenges

• Determining Eligibility for Multiple Programs
• Aligning Public/Private Agency Goals
• Ensuring Seamless Movement of Clients
• Promoting Good Working Relationships

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Key Lessons Learned

• Privatization is Often More Difficult Than
  Anticipated
• Competition is Not Automatic
• Effective Performance Measures are Not Simple to
  Develop
• Contract Monitoring is Essential But Not Cheap
• Public Agencies Still Play Critical Role

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Further Information

• Final Report Privatization in Practice Case
  Studies of Contracting for TANF Case Management
• Available shortly at www.mathematica-mpr.com