US child welfare system could save $12 billion, improve outcomes

Striking a better balance between programs to prevent child maltreatment and services for those who have already suffered from abuse could improve long-term outcomes for children and reduce child welfare system costs in the United States by $12 billion, according to a new RAND Corporation report.

RAND researchers developed a quantitative model that simulates how 24 million children interact with the country's child welfare system. They considered options that increased both the quantity and effectiveness of services delivered to families. The model marks the first-ever attempt to integrate risk of maltreatment, detection, paths through the system and consequences to predict the impact of policy changes.

Researchers analyzed the effects of three common strategies for improving the child welfare system: preventing maltreatment of children so that they don't need to enter the child welfare system, supporting family preservation efforts that keep children in the system with their parents, and encouraging care by relatives (kinship care) when out-of-home care is necessary.

"Our findings suggest that better outcomes can be achieved through a combination of prevention and treatment services, and that these changes will essentially pay for themselves," said Jeanne Ringel, lead author of the report and a senior economist at RAND, a nonprofit research organization. "When a balance is struck between prevention and treatment, children will be less likely to experience poor outcomes - including substance abuse, homelessness, criminal conviction, and underemployment - as young adults."

Every year, about 3 million children face either abuse or neglect, according to the Fourth National Incidence Study of Child Maltreatment. The child welfare system aims to help those who encounter such harm. Services are provided at the community level and include investigating reports of neglect or abuse, providing family preservation services, and placing kids in foster care or care by relatives.

RAND's model estimates that a set of policies aimed at increasing both the number and the effectiveness of prevention and kinship care services would yield $12.3 billion in cost savings for those 24 million children. Under this scenario, spending would increase by $4.3 billion, but these additional costs would be offset by a subsequent reduction of $16.6 billion in system spending.

Total caseload would also fall. When the quality and quantity of both prevention and kinship care increase, the RAND model indicates that cases of maltreatment would decline by about 10 percent. As a result, child welfare referrals would decrease by 3 percent. Importantly, the likelihood of negative long-term outcomes—homelessness, underemployment, criminal conviction and substance abuse - would decrease by about 7 percent.

"Our analysis makes it clear that pursuing both prevention and treatment measures will improve the lives of children and their families," Ringel said.