Presentation Materials: 

E5_PerformanceBasedContracting_presentation.pdf

This presentation will provide an overview of one organization’s experience with performance-based contracting. Included in the discussion will be a review of the financial and operational model, strategies that were implemented to manage the process, and interventions that were developed to move youth to permanency more quickly. As performance-based contracting becomes more acceptable throughout child welfare systems, this workshop will provide valuable insight into the process and pitfalls related to this innovation.

Workshop objectives/takeaways:

• understand performance-based contracting;


• discuss tools to manage the contracting process;


• review the outcome measures and practices of performance-based contracting;


• define the practices that need to be implemented in order to manage performance-based contracting; and


• describe the case management and evidence-based practices necessary to achieve the desired outcomes.

Presenters: Tim Goldsmith, chief clinical officer, and Sarah Hurley, director of research, Youth Villages

Workshop synopsis:

In Tennessee the child welfare system has undergone a remarkable transformation that has dramatically decreased the number of youth in custody, produced more discharges to a permanent setting, and reduced expenditures on placements. This has been mostly achieved through the implementation of performance-based contracting.

This process was initiated by a new state administration that had seen three leaders of the child welfare system come and go. The current commissioner contracted with Chapin Hall at the University of Chicago to develop and implement a new contracting system that focused on permanency while maintain a high level of safety for children.

Extremely controversial among the provider community, this initiative injected, for the first time, a comprehensive financial model that rewarded a quick exit to a permanent setting while also requiring low levels of recidivism. These components were based on the historical performance of each individual agency, which forced all providers to improve on their outcomes over the past three years.

The selling point was that the new initiative allowed successful agencies to collect up to approximately 50 percent of the per diem cost of each case that was discharged prior to the target date. In real terms, this meant that organizations would earn $30 to $50 for each day of discharge that was in advance of the established goal. To prevent unwarranted discharges, there were also penalties established that required a repayment for youth who were returned to custody within one year.

The analytical process and data capture elements to adequately comprehend and manage this process were substantial. As is often the case in child welfare, financial components are typically not a component of case reviews, even though state budget shortfalls in the current economic environment are rampant.

This workshop will detail the Tennessee model and provide an overview of the basic components. Presenters will review the tools that were developed and the processes that were established to insure that cases were discharged in an efficient manner. Youth Villages worked with more than 500 cases in each performance-based contracting year and participated in cases throughout the state. As a result, the implementation strategies were integrated at every level of the organization.