Henry J. Kaiser Family Foundation
This paper covers two topics: strategies for financing integrated services for children and families, as well as some of the down sides of services integration as a strategy at all. These two topics may not be as contradictory as they appear at first blush, since the considerable difficulties of untying the Gordian knot of financing is one of the reasons why integration may not be the best, or certainly the only, strategy for all of us in the field to pursue.
Reforming the financing of services for children and families is a means to an end. We should do so to the extent that it is necessary to enhance the effectiveness of the services we provide. The argument that is made—and I have made it myself—is that the categorical nature of programs make it difficult to tailor services to real needs. All that is true, but it is important not to exaggerate the significance of the financing issue. Without any change in financing, schools could be mandated to make their facilities available to the community. Welfare case workers could be moved out of their offices and into community settings. Community agencies could agree on uniform assessment tools and abide by service plans. Schools and Head Start agencies could work together more closely. All of these things and many more could be accomplished without major changes in the way in which we finance the services we provide.
After many years as an advocate of financing reform, I have become convinced that the obstacles to services integration are as much professional, organizational, and political as they are a function of the absence of
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Effective Services for Young Children: Report of a Workshop The Challenges of Services Integration for Children and Families Drew Altman Henry J. Kaiser Family Foundation This paper covers two topics: strategies for financing integrated services for children and families, as well as some of the down sides of services integration as a strategy at all. These two topics may not be as contradictory as they appear at first blush, since the considerable difficulties of untying the Gordian knot of financing is one of the reasons why integration may not be the best, or certainly the only, strategy for all of us in the field to pursue. FINANCING SERVICES INTEGRATION Reforming the financing of services for children and families is a means to an end. We should do so to the extent that it is necessary to enhance the effectiveness of the services we provide. The argument that is made—and I have made it myself—is that the categorical nature of programs make it difficult to tailor services to real needs. All that is true, but it is important not to exaggerate the significance of the financing issue. Without any change in financing, schools could be mandated to make their facilities available to the community. Welfare case workers could be moved out of their offices and into community settings. Community agencies could agree on uniform assessment tools and abide by service plans. Schools and Head Start agencies could work together more closely. All of these things and many more could be accomplished without major changes in the way in which we finance the services we provide. After many years as an advocate of financing reform, I have become convinced that the obstacles to services integration are as much professional, organizational, and political as they are a function of the absence of
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Effective Services for Young Children: Report of a Workshop this or that federal waiver, pooled financing scheme, or other new financing arrangement. Without question, reforming financing will strengthen our efforts, but it is not a magic cure. Moreover, if our service system is poorly arranged, it is also underfunded. Welfare checks provide support at a fraction of the federal poverty level. Staff salaries in community agencies yield turnover rates of 40 percent or more. And 15 percent of the population in the average state lacks health insurance coverage. It hardly needs saying that you can't pool, capitate, insure, or guarantee funding with nothing. When I took over as human services commissioner in New Jersey in 1986, we were paying physicians $7.00 under Medicaid for a general office visit. No matter how you slice it, $7.00 will not go very far. Reforming the financing of services for children and families will not solve the underfunding problem. That said, there is little question but that more flexible funding arrangements and more permanent funding streams would help in our efforts to make services for children and families more effective. What follows then are two modest suggestions to move us forward on the financing front at the national level. The paper by Frank Farrow in this volume focuses on state-level initiatives. A Vehicle for Federal Action There sits in the White House a now virtually inactive entity known as the Low-Income Opportunity Advisory Board (LIOAB). Established through executive order by President Reagan, the LIOAB brings together in the White House all the federal agencies responsible for the major social programs. It has high-level representation and is directed by senior White House staff. The LIOAB has the authority not just to tinker with categorical programs, but to help effect the thoroughgoing changes necessary to enable states and communities to pool financing, to reorganize services, and generally to change the rules and try out new approaches. (Technically, the board's authority does not supersede the authority of individual agencies or agency heads, but its recommendations amount to the same thing.) Can the board help? There is precedent that says it can. Quietly, near the end of the Reagan administration, the board provided federal waivers for no less than 16 major state and local welfare and social services experiments. These projects tested major changes in how the welfare system worked and together helped lay the groundwork for nation legislation. Not all were state-level initiatives; a variety of community-based efforts were undertaken as well. The LIOAB could be revitalized tomorrow and asked to play the same role for services for children and families. Using the board, the President
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Effective Services for Young Children: Report of a Workshop could establish a national integrated children's services initiative, soliciting proposals from state and local government and communities, with a commitment to establish 10 to 20 major efforts. These projects would have at their heart a single point of contact for children and families in a defined geographic area and pooled financing, bringing together multiple funding streams and giving professionals the flexibility to design individual family service plans. By way of example only, let's imagine that through this approach we created a new entity called Family Maintenance Organization (FMO). The FMO would allocate resources from a fixed amount for each enrolled child or family, established by pooling existing funds. Professionals would have the flexibility to devote resources to preventive services before major problems occur, such as home visiting for families in crisis whose children are at high risk of foster care placement. All services would be neighborhood based. This is just an example; capitation need not be the approach taken. Funds could also be pooled at the statewide, regional, organizational, family, or individual level. The important point is that flexibility is provided to meet service needs and that bills for services provided are paid. In an initiative such as this the exact approaches taken would have to bubble up from the local or state level. No one knows what approach is best, and circumstances vary greatly across the country. To get started, the President could announce the new initiative. The LIOAB would establish guidelines and solicit proposals, implementing 10 to 20 integrated service programs for children. If the White House was not interested, the Department of Health and Human Services could take the lead itself. Secretary Louis Sullivan has a keen interest in this approach and jurisdiction over a majority of the relevant programs. But to really bring in programs administered by the departments of Labor, Agriculture, and Education and to avoid conflict with the Office of Management and Budget, it would be better if the White House took the lead. In the alternative, Congress could mandate that the board take on this job. But it would be better if the board/administration were to seize the initiative itself. Congressional mandates aside, bureaucracies work best when they actually want to carry out the assignments with which they have been charged. In theory, such an initiative could be undertaken on a revenue-neutral basis, but I see no reason why we should assume this going in. Figuring out whether a new approach costs or saves money used to be considered a legitimate undertaking in the federal government. The idea that demonstrations should only be undertaken (and waivers granted) when they are guaranteed to save money is one of recent vintage, and the depth of feeling on this issue in the Bush administration has yet to be tested.
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Effective Services for Young Children: Report of a Workshop Financing School-Based Services Perhaps the leading example of services integration for children and families in the country right now is the school-based services movement. I believe that school-based services hold great promise for the future. For reasons well known to this audience, it is absolutely essential to break down the barriers that exist between the schools and our health and human services systems. Yet, with some exceptions, school-based services programs are inadequately funded and rely, to their peril, on "soft" money from foundations and government. This is a promising strategy that needs a better funding base if it is to be institutionalized and taken to scale. One step that could make a big difference would be to make school-based services programs participating Medicaid providers. My guess is that between 70 and 95 percent of the young people using school-based health and human services programs are Medicaid-eligible. Moreover, in most states the majority of services provided are covered by Medicaid and EPSDT. Thus, opening up the Medicaid-funding spigot could very significantly help to stabilize school-based projects. With about 50 percent of Medicaid-eligible children not now receiving services, it could also go a long way toward reaching the underserved. To my knowledge this could be done immediately. Without any change in state or federal law or a federal waiver, states could define the characteristics of school-based services programs eligible to participate in their Medicaid programs and reimburse for services covered in their state Medicaid plans. Alternatively, the federal government could mandate that states offer participation in Medicaid to school-based services programs meeting specified standards laid out in federal rules. Participation in Medicaid could also be used as a carrot to leverage more comprehensive services than Medicaid can cover, by stipulating that eligibility to participate would depend on the ability to provide a range of services beyond those actually covered by the state's Medicaid program. In this way, Medicaid could be used to encourage the colocation and coordination of a broader range of services that children and families need. THE PITFALLS OF INTEGRATED SERVICES Having said that integration and coordination can improve services for children and families, and that changes in financing can assist in the implementation of services integration schemes, I also offer the caution that we keep services integration in perspective as we consider the full range of options available in assisting children and families in need. Our goal is effective services, and services integration is but one approach. Indeed, it runs the risk of becoming today's fad, inheriting that mantle from case management—that often so ill-defined buzzword of the last 10 years.
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Effective Services for Young Children: Report of a Workshop First, the most practical problem with services integration is that it is so hard to do. We are much better at mailing checks and expanding existing programs than we are at the slow process of institutional, professional, and bureaucratic change. Increasing the earned income tax credit, increasing welfare grants, expanding Medicaid eligibility, paying for more child care, guaranteeing minimum child support payments . . . if we can find the dollars, we know that these are things we can do well. As this institutional reformer of long standing knows from firsthand experience, one of the benefits of income versus services strategies is their "doability" in the real world. The best strategy (services integration) is not always the best policy choice in practice. Second, as we always discuss, services integration programs are inherently difficult to take to scale. Comprehensive, intensive, preventive, neighborhood-based, family-centered strategies are expensive and are usually highly leadership dependent. Such approaches will do a lot for a limited number of families and children. Broader changes in big public systems (such as welfare, Medicaid, the tax structure, or the child welfare system) may do less on an individual basis (and if poorly crafted may do nothing at all) but can reach many more families in need. This trade-off between breadth and depth of impact is an important one to keep in mind as we debate the merits of this or that interesting local services integration scheme. Third, expertise and specialization can make a difference, although they are in disrepute these days. I sometimes think that case management and primary care are solutions we prescribe at least a little more often for poor people than we do for ourselves. Fourth, as noted earlier, services integration can do little to add dollars to an underfunded system. Nor is it likely to save as much money as is often alleged. Too often it will supplement rather than replace existing services and identify further unmet needs that will cost money in the end. Fifth, as political scientists have longed observed, categorical programs win greater funding and are more resistant to the budget ax when it threatens to fall. This is no small consideration in this period of federal deficits and hard-hit state budgets. Sixth (and to take on everything we hold dear), primary prevention—usually one of the key underpinnings of services integration schemes—is right-minded but also somewhat inefficient from a policy point of view. The reason for this is that in primary prevention resources are devoted shotgun style to a large number of individuals and families who might never develop problems at all, and on whom public resources might not have ever been spent. This is a problem that is best solved by targeting primary prevention activities on the highest-risk groups, but our success in targeting in this way has been less than perfect over the years. Secondary prevention, by contrast, deals with known individuals with known problems, on whom
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Effective Services for Young Children: Report of a Workshop considerable sums would surely be spent. Once again, the best intervention is not necessarily the best policy choice. Seventh, I worry that in our recent emphasis on intensive, integrated services, we confuse the best strategy for a minority group or the poor with the best strategy for all. Certainly, for multiproblem children and families, and for children in contact with the protective services system, the most comprehensive service interventions make sense. But in our rush to make everything comprehensive, we should not forget that most poor Americans do not neatly fall into these categories. Most are working and move in and out of poverty, or on and off of welfare, rather than remaining for long spells. For these low-income Americans, targeted interventions—some needed job or skills training, health coverage during a transition to work, assistance with child care costs, etc.—can make a huge difference. No doubt comprehensive, case-management-driven service systems would benefit almost all Americans, but they are probably not the best policy choice for assisting the largest number of America's poor. Eighth, and most broadly, most calls for integrated services would place those service efforts in the context of broader community mobilization schemes. While the grass roots nature of these community-based strategies have brought liberals and conservatives together in support of integrated services as an approach, I worry about community-based strategies as our main weapon in the fight against poverty in the decade ahead. The results of such efforts—bubbling up, community by community across the country—are certain to be quite variable and difficult to sustain. Changes in big programs, systems, and institutions, by contrast, are likely to be more universal in nature and, arguably, more lasting in their effects. So, thinking about the role and difficulties of financing services integration has led me to want to keep the strategy itself in perspective. All responsible advocates of services integration make exactly these points. Nevertheless, I do sometimes feel that those of us in the business of helping children and families are in danger of letting this particular strategy dominate our thinking these days. Our goal is to help children and families, and there are a variety of routes to that end.