Radical Idea Serves Youth, Saves Money

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Memphis, Tenn.

In 1995, Patrick Lawler, CEO of one of Tennessee's largest youth service contractors, approached state officials with a radical idea: Pay me less for each kid, and give me more kids.

What did his nonprofit agency want? Freedom -  freedom to provide services in various locations such as foster homes and in-home placements, not just in state custodial facilities as Youth Villages had been doing for years.

"I promised that if given the chance to do this, at least 80 percent of these children would remain in their homes successfully for nine months after using provider services," Lawler says.

He kept his promise. The experiment continues - offering lessons for other states, and a welcome sense of accomplishment for a state youth service agency battling charges of ineptitude.

With Tennessee Department of Children's Services (DCS) Commissioner George Hattaway under fire these days - mainly because his agency's foster care component (with some 11,000 youngsters) is beset with lawsuits and critical state audits - even he takes the time to praise Youth Villages.

It is, he says, "our largest private service provider and the most successful agency we've contracted with." According to a DCS spokeswoman, Youth Villages' DCS contract to provide services to 640 children and their families is worth $24.2 million - a sign that DCS likes what Youth Villages does.

But getting to this point wasn't easy.


Against The Grain


Youth Villages is an aggressive, risk-taking nonprofit that began in 1986 with an operating budget of $125,000 and nine employees. Today it runs on a $40 million operating budget, has nearly 800 staff, interacts with more than 1,000 youth daily, operates programs at 27 sites in four states (Tennessee, Mississippi, Arkansas and Texas), and will soon break ground on a $7.5 million school for troubled and developmentally disabled youth.

The agency's growth, in fact, concerns some of its backers. Rick Haynes, executive director of the Memphis-based Plough Foundation - which has contributed $1 million toward the construction of a psychiatric hospital for juveniles to be run and staffed by Youth Villages - says, "I'm a hard sell on administrative matters, but they bring top-notch management and a total system of care that returns youngsters to their homes. They are a very successful organization whose continued expansion, with its attendant pressures, concerns me."

The growth began with an admission of failure.

"We were doing something wrong," Lawler, a former parole officer, says of YV's early years as one of several contracted private service providers for DCS' predecessor, the Department of Human Services (DHS). Handed a $16 million contract, he recalls, YV "worked with anybody - DHS, the Department of Youth Development, the Department of Mental Health, the juvenile court - but the state had no way of keeping score as to what outcomes were. Kids were getting stuck in the system for years. They were being bought a bed."

While Lawler was thinking about this around 1995, a financial crisis loomed for the state. Gary Dowdy, then interim director of what was called the "Children's Plan" under DHS, explains, "There was no financial system in place regarding accountability, there was no financial incentive or risk or any kind of pressure put on the providers to move a child out of the system."

Dowdy recalls a budget at "between $350 million to $375 million" for all children and youth services, "and if we had continued at the same spending levels we would have had a $25 million over-expenditure."

By this time Lawler had been sold on the merits of Multisystemic Therapy (MST), a home- and community-based therapeutic service (using highly trained youth workers) for troubled kids and their families. It was developed by Scott Henggeler, director of the Family Services Research Center of the Charleston-based Medical University of South Carolina.

During this financial crunch, risk-taker Lawler offered Dowdy and Pat Dishman, then director of resident management and development at DCS, his against-the-grain proposal to focus on shifting more youths out of residential care, reducing the state's payment per child and increasing the number of youths served by YV. They agreed to try.


'Get The Kids Home'


"The basic concept was we would cut our per diem rate by one-third per day per youth [from $180 down to $120], and serve one-third more youth at the same [total] cost, if the state would give us the freedom to provide services in a variety of locations," Lawler says.

With effective monitoring and follow-up procedures in place, the home environments of troubled youngsters were stabilized through intensive services and speedy around-the-clock responses to crisis situations.

"With the intervention program," Dowdy gleefully relates, "we were able to use the $25,000 it would have taken to house a kid for a year and spread it over 10 non-custodial services." He emphasizes that the decision to move the youths along to less restrictive environments until they were out of the system was left to the provider. "We eliminated the old rule that every decision at every stage had to be bounced back to the state," he says.

Dishman reflects that "these cost-effective, less oppressive prevention programs are generally the first to go when the financial crunch is on. Ironically, they're considered luxuries."

Their endorsement of Lawler's new approach with a $15 million contract involving 400 juveniles would pave the way for YV to become the largest provider of MST in the country and, that first year, save Tennessee $12 million.

Mavis Snyder, YV's director of foster care, observes that even after several years of successful operation, YV's wholistic programs are viewed askance by some DCS social workers whom YVers call "old line." Says Snyder, "They're accustomed to taking a case from a previous social worker, using the same old notes, forming a conclusion on the basis of these notes and proceeding from there. We want the kids out of the system as quickly as possible, and every case is a possibility."

Over the last three years, YV has shaved 83 days off the average time juveniles remain in its facilities. This saves the state $8,217 per youngster. The average cost for a youth's treatment in residential facilities at Youth Villages ranges between $28,000 and $60,000. The average cost per youth in the YV home-based counseling program ranges from $6,400 to $8,400.

Notes of caution filter through from important sources. June Wood, chief administrator of the Memphis and Shelby County Juvenile Court,  warns, "We're a year or so out from knowing whether the managed care concepts used here are effective or not." 

Today, as in 1995, a mix of federal and state dollars are tapped to fund DCS collaborative programs. For instance, TennCare, the state's version of Medicaid, was set up to insure the low-income and disabled access to preventive health services and is liberally used for YV intervention services.  

Private Grants Pile Up 

Youth Villages does not deal with juveniles with severe behavioral disorders such as sex offenders or chronic crime repeaters. In addition to its contracted services with Tennessee, the Mississippi Department of Family and Children's Services and the Arkansas Department of Human Services, it accepts referrals from psychiatrists, parents, judges and social workers, among others.

Last year YV, through home-based counseling, residential treatment, foster care, community-based services, alternative schools and adoption services, worked with 1,600 children and teens. Some developmentally disabled youngsters stay in facilities for several years because of a moving parent or no place to go, but they are integrated into the community through jobs, school enrollment and entertainment and recreational activities, while YV staff seek homes for them.

But youth may remain in Youth Villages facilities until the age of 22. While it is true that adult services for the developmentally disabled do not kick in until that age, those not disabled and who attend college may stay until completing their education or turning 22.

Lawler, ever the expansionist, has dramatically increased his pitches to regional foundations for private grants to cover program costs, land acquisitions and building construction, and to make certain his staff's salaries are competitive. Just last month he unexpectedly got a $2.5 million windfall from the locally-based Barret Trust. "I applied just by rote," he says. "I didn't think I'd get anything. I'm stunned." 

In its home base here in West Tennessee, which borders Mississippi and Arkansas, YV operates two residential campuses with classrooms for both high-functioning and low-functioning youngsters (including the 85-acre Memphis Boys Town), three community-based group homes, a Family Link Emergency Shelter, three community-based group homes, and foster care and home-based counseling programs operating out of two large office buildings. Other facilities and offices are scattered across Tennessee, along with offices in Mississippi, Arkansas and Texas.

Boyish-looking at 46, the married father of two, and clearly enamored of captains of industry such as Eisner and Trump, Lawler also has a Dr. Kildare-like appreciation for the 24/7 services offered by his so-called Intercept team - his MST counselors - who are on call at the odd hour to help a family in crisis on home turf. "It is the odd hours," asserts MST program developer Henggeler, "that are critical."

Misbehavior and minor crimes by young teens are regarded by MST therapists as warning signs of family problems. "The parents are often a carbon copy of the kids as grownups," observes Lawler. YV does whatever it takes, he says, to get the kids home. "We'll help them get their water turned back on, their lights back on. With these things out of the way, our Intercept counselors [most have bachelor's or master's degrees] can deal with psychological, emotional and substance abuse issues - and connect youth to activities in employment, sports, computers or any healthy interest."

"It is an air-tight continuum, with quality control systems firmly in place," says Richard Mendel, author of "Less Cost, More Safety, Guiding Lights for Reform in Juvenile Justice." (See "Report Roundup," Youth Today, May 2001). "Youth Villages is a very unusual nonprofit in that it's better organized than for-profits."

Dr. Tim Goldsmith, YV's director of clinical services and a master of air-tightness with his system of surveys, follow-ups and monthly staff meetings, notes that many old-line social workers have no notion of the importance of family in youth development and rehabilitation. "I still hear of social workers scolding parents by saying, 'You're a bad parent, you're never gonna get your kid back.'"


Rates of Return


Steve Aos,  associate director of the Washington State Institute for Public Policy, a research arm of the state Legislature, is an economist who claims his agency has been stacking up research for over 25 years to determine whether programs enjoying success elsewhere would be "adaptable" in his home state.

The institute gave a vigorous nod of approval after analyzing evaluation results for YV's Memphis MST program (and two similar programs); the state began implementing MST intervention programs in its juvenile court system in January 1999. As in Memphis, the average caseload per counselor is four to six families a week.

"Before accepting the program, we looked at two perspectives," recounts Aos. "How it would affect the rate of return for taxpayer dollars and, in a broader view, how could we cost out a reduction in fewer crimes and fewer crime victims."

According to Aos (using numbers from past years when costs were lower), revelation No. 1 was: "At $5,000 per kid, the taxpayer is ahead by $31,000 per kid or family because of a 30 percent reduction in the recidivism rate." Revelation No. 2: "High-risk kids reconvicted for felony cases drop from 60 percent to 45 percent with MST - and fewer crimes and victims translates to a taxpayer benefit of $130,000 per kid."

Back in Tennessee, the rates of personal return for YV staff reflect Lawler's philosophy that staffers should be paid "commensurate with what they do." While a case manager's starting pay at DCS is $22,000, salaries for direct-care positions at Youth Villages range between the high teens and high 30s. Salaries for the executive leadership staff range between $45,000 and $105,000. Medical Director Fred Thomason, who was medical director of the Children and Youth Unit at Memphis' St. Joseph Hospital, earns $181,500, and CEO Lawler earns $187,580.

Yet "the turn-over rate of the direct-care staff is horrible," Lawler confesses, "because the late shifts and weekend duties take their toll."

Henggeler adds that MST work is especially hard on young marrieds. "They're trying to raise families and the odd hours interfere, so they, understandably, quit."

Lawler emphasizes that all executive-level staff members donate "between 3 percent and 6 percent of their gross salary back to YV. That helps pay for 100 percent of college tuition for employees who want to continue their education."  Last year 67 staffers took advantage of the program. Youth Villages has a 75 percent retention rate of one year or more, and an organization-wide vacancy rate of 1.5 percent.




Another rate of return for Lawler is professional. His eyes were opened, he says, by the writings of the late Nicholas Hobbs (particularly the book, "The Troubled and Troubling Child"). Hobbs was the creator of what is known as Re-ED, or the re-education of young people and their families through the development of services based on educational, psychological and ecological principles.

Lawler knows several of the 12 "principles of re-education" by heart.  One in particular is posted somewhere conspicuous at each of the facilities: "Life is to be lived now, not in the past, and lived in the future only as a present challenge."

Youth Villages is one of the founding members of the Ohio-based American Re-Education Association, where it networks with member organizations that work with children who have emotional or behavioral problems. YV is also affiliated with the Child Welfare League of America, the Tennessee Association of Child Care, and the American Academy of Child and Adolescent Psychiatry.

That's a big change from a few years ago, when,  Lawler says, "I didn't know anything."

Bill Alexander can be reached at balex@youthtoday.org.