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Foster Care Contractor Pulls Out, Leaving ‘Redesign’ In Doubt

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The massive for-profit company Texas hired to further privatize its foster care system has pulled out, casting more doubt on the privatization effort that was supposed to improve the troubled system without costing the state any extra money.

Today, Providence Service Corp. of Texas informed the Department of Family and Protective Services in writing that it was terminating its $30 million-a-year contract with the state just 18 months into its five-year agreement. Providence was the first company contracted by the state under a set of changes dubbed “foster care redesign.” The only other company contracted for redesign, the Fort Worth-based nonprofit ACH Child and Family Services, began providing services at the beginning of July and remains in its contract.

Though Providence’s decision is being called “surprising,” the Observer reported in June in the feature “Fostering Neglect” that many child welfare advocates and even the CEO of Providence expressed skepticism that the plan was financially viable. Nine months into the agreement, Providence was already $2 million over budget.

Providence had been hired to provide services to foster kids in a 60-county rural swath of West and North Texas and to oversee all the private child-placing agencies in the area. Advocates, most of whom are already concerned that redesign could make a bad system worse, were further alarmed in July when two young foster children drowned after being placed with a family by the child-placing agency owned by Providence’s parent company.

At the time, the state didn’t seem likely to change its relationship with Providence, but in a statement today from the Department of Family and Protective Services, the attitude seemed to be “good riddance.” Although Providence is the one who pulled out, the release notes:

“Recently, DFPS notified Providence about several issues with the performance of their contract.

Some of those issues included:

• Missing performance targets on key goals such as placing siblings together and keeping children close to home.

• Failing to develop staff and network of providers needed to place children as quickly as required.

• Unable to develop a full array of services to better serve children.”

Judge John Specia, the department’s commissioner, told the Observer that Providence pulling out is “not going to impact the children. The children are going to stay where they are.” Over the next 30 days, the state will reabsorb the 1,100 children served by Providence.

As for whether the basic financial plan of redesign—providing more services and management without more money—was viable, Specia said, “We’re looking at that very carefully. We’re doing a study right now on the cost of doing redesign.” He expects results mid-September.

Providence’s withdrawal is “a set-back,” Specia says, but, “it doesn’t change the need to change the system. The issues are still there. To be honest, we’re going to have to really evaluate where we go and make sure it’s going to work next.”

That’s what child welfare advocates like Ashley Harris of Texans Care for Children have been asking for all along. In a statement today, Harris said, “It should now be clear to everyone that just barreling ahead with further privatization isn’t going to work. It hasn’t worked in other states, and it’s not working in Texas. We can do some things on the cheap, but protecting a child after the state takes custody of her is not one of them.”

Emily DePrang joined The Texas Observer in 2011 as a staff writer covering criminal justice and public health. Before that, she was nonfiction editor of the Sonora Review. Before that, she was a waitress. She's also appeared in The Atlantic, Salon.com, and VICE. She holds an MFA in Nonfiction from the University of Arizona and has won some things, including the Public Service Award from the Society of Professional Journalists (2012), the National Health Journalism Fellowship from USC Annenberg (2013), and a nomination for a National Magazine Award in Reporting (2014). She still sometimes thinks about waitressing.