Policy Options to Support Children
from Birth to Age Three
Joint Report with Public Sector Consultants, October 2014
This report would not have been possible without the generous support of the Center for Michigan, the Alliance for Early Success, the Herbert H. and Grace A. Dow Foundation, the Lagina Family Foundation, the Max M. and Marjorie S. Fisher Foundation, Phillip Wm. Fisher, the United Way for Southeastern Michigan, and the W.K. Kellogg Foundation.
Extensive research has demonstrated that the period from birth through age three is critical to a child’s development. Depending on circumstances, children can begin with a great start, or they can begin to fall behind, and some of the children who fall behind early will never catch up. Early investment can help to ensure that all children get off to a great start. An extensive research base demonstrates that early investment is far more effective at improving outcomes for at-risk children than later remediation. Early investment can provide lifelong benefits to children, including improving their health and increasing their education attainment and future earnings. In addition, research has demonstrated that early investment pays substantial returns to taxpayers through lower expenditures on special education, grade retention, and welfare programs, through increased tax payments, and through a reduction in crime.
Investing in our children through high-quality, research-based early childhood programs may be the single most effective, and taxpayer friendly, economic development strategy that Michigan can pursue.
This report identifies places where targeted investments are most likely to produce the best outcomes for Michigan’s children and for the state as a whole.
MICHIGAN’S AT-RISK POPULATION
We find that approximately 260,000 Michigan children from birth to age three are at risk, representing 56 percent of children in this age range. We define children as “at risk” if they are at heightened risk of falling behind their peers before they reach kindergarten. Research suggests a number of risk factors negatively correlated with school readiness including:
- Children from low-income families
- Children with developmental delays or disabilities
- Children of parents with low educational attainment
- Children experiencing severely adverse situations
- Children in non-English-speaking homes
Being in a low-income family puts children at risk, and the lower the household income, the greater the risk. This report contains estimates using a variety of income levels as the definition of low income. The estimate of 260,000 uses our preferred income threshold of 185 percent of the poverty line, the same threshold used for reduced-price school lunches and Medicaid.
To identify promising opportunities for investing in at-risk children, we considered the following criteria:
- Opportunities identified by experts and supported by a solid research base
- Opportunities that have standardized models, are replicable, and can be evaluated
- Opportunities to serve the neediest children first
- Opportunities where parent engagement is a key component
- Opportunities with a demonstrated rate of return
Based on these criteria, we identified four program areas for targeted investment: home-visiting programs; access to medical homes; high-quality child care; and preschool for three-year-olds.
Our review of the research leads us to conclude that home visiting is the most promising option for investing additional resources. Home-visiting programs are voluntary programs that link parents with trained service providers (such as a nurse or social worker) who coach families on how to best address the challenges they face and teach ways to improve the home environment for children. The research base supporting home visiting is remarkable for its breadth and quality, and for the positive results these programs have demonstrated.
An evidence-based home-visiting program has a clear, consistent program or model that is based on research. Evidence-based programs have been standardized so that communities that follow the standardized models can be confident that their results will be comparable to those in the empirical research.
Home-visiting programs have been shown to be beneficial to mothers and their children, as well as delivering a return on investment to taxpayers. Benefits of home-visiting programs include improvements in maternal and child health, increased family economic self-sufficiency, and reductions in juvenile delinquency, family violence, and crime.
If policymakers wish to expand home-visiting programs, the following steps would be effective.
1. Provide grant funding to implement evidence-based home-visiting models. Provide funding to ensure that a variety of evidence-based models are available in communities, so that children with a diverse set of risk factors can be served.
Rationale: There is ample evidence that investments in evidence-based, home-visiting programs generate a return on investment. Different home-visiting models are most appropriate for children with different risk factors. Funding a variety of programs helps ensure that families can be placed in the program most appropriate for their specific needs.
Cost: Providing funding for an additional 5,000 children per year would cost an estimated $25 million per year, while providing funding for an additional 10,000 children would cost $50 million per year.
2. Fund technical assistance. Fund dedicated staff who can provide technical assistance to local communities.
Rationale: Local communities need support to implement effective and efficient home-visiting efforts. Technical assistance can help local communities implement current best practices. In addition, technical assistance can help communities with specific tasks such as creating screening programs to direct families into the home-visiting model most appropriate for their risk factors, and fully leveraging any available Medicaid matching dollars.
Cost: Funding technical assistance will cost less than $1 million per year.
3. Serve the neediest children first. Create criteria to ensure that limited state funding dollars are used to serve the neediest children first.
Rationale: While there is ample evidence that home-visiting programs provide a return on investment, limited capacity and the high program cost ensure that, in the short run, many at-risk children will not be served. Eligibility criteria should be put in place to ensure that limited program dollars are allocated to those with the highest need. For example, requiring that children have two or more risk factors, or using a more restrictive income threshold will help ensure that dollars are targeted to the neediest families.
Cost: This activity is part of technical assistance and should not have a separate cost.
4. Assist communities in developing outreach programs. Provide both technical assistance and financial support to develop outreach programs connecting families to the home-visiting program that best meets their needs.
Rationale: Home-visiting programs are voluntary. At-risk families will need to be informed about the potential benefits of home visiting and then connected to the program in their community that best addresses their needs. Technical assistance and financial support will help communities build efficient programs.
Cost: Much of this activity can presumably be done as part of technical assistance and by leveraging existing Medicaid outreach programs. Some additional financial support may be needed, but costs should be relatively low (less than $1 million).
Access to Medical Homes
We also find strong evidence that providing young children with access to a medical home is an effective investment strategy. Children that have a “medical home” have an ongoing relationship with a personal, primary care physician. The physician and other providers in the practice consider the needs of the whole child, provide enhanced access, and coordinate or integrate specialty care as needed. Access to a medical home has been shown to reduce emergency department use, hospital admissions, overall healthcare costs, and to improve the quality of care for children.
Programs that provide support to medical providers and families to enable them to maintain a relationship have been shown to increase the number of children who have access to a medical home. One such program is the Children’s Healthcare Access Program (CHAP) in Kent County.
If policymakers want to increase the number of children with access to medical homes, expanding CHAP programs in Michigan would be an effective strategy. The following steps would be effective in expanding CHAP programs.
1. Provide matching grant funding. Provide matching grants to communities to assist them in creating and running CHAP programs.
Rationale: Communities will need financial assistance to start and run CHAP programs; however, running a successful CHAP program requires the coordination of local community resources. Requiring communities to provide matching funds helps to ensure that the local community capacity is in place and that the local community supports the program.
Cost: Michigan has an estimated 84,000 at-risk children from birth to age three without a medical home. Covering these children and other Medicaid-eligible children through CHAP programs would cost an estimated $10 million per year, assuming local infrastructure is in place. If state funding is provided via matching grants, the state cost would be less than $10 million, but local costs will increase by a commensurate amount.
2. Fund technical assistance. Create a resource center that can help communities navigate the technical challenges of establishing and effectively running a CHAP program. For example, the technical center can assist local community leaders with the exploration and negotiation of arrangements for maximizing federal Medicaid matching dollars.
Rationale: A central technical resource center can ensure that best practices are communicated to all CHAP communities, and a technical resource center can assist local communities in addressing common problems.
Cost: Technical assistance could be provided for less than $1 million per year.
3. Invest in long-term evaluation. Provide funding to evaluate CHAP programs.
Rationale: Maintaining support for CHAP funding and support for the continuing participation of community partners will require evidence that the program is effective and provides a return on investment. Generating this evidence will require program evaluation.
Cost: Evaluating CHAP programs statewide would cost an estimated $0.5 million to $1 million. This is not an annual cost, but a cost that would be incurred each time an evaluation was completed. Program evaluations would likely be needed every three to five years.
High-Quality Child Care
A growing body of research has documented the link between high-quality child care and long-term outcomes for children. Studies have shown that positive child care environments promote child progress in both academic skills (such as reading, math, and cognitive skills) as well as social skills (such as motivation and lack of behavioral problems). The Michigan Department of Education administers Michigan’s child care subsidy program known as the Child Development and Care (CDC) program. The evidence linking high-quality child care to improved outcomes suggests the possibility that additional targeted investment in the CDC program can lead to significantly improved outcomes for children.
It is critical that any CDC program investment focuses on high-quality care. When considering strategies, policymakers should be mindful of two important issues. First, high-quality child care is expensive. Second, it is difficult to measure the quality of child care. Although Michigan has taken positive steps toward identifying high-quality care with the Great Start to Quality rating system, work regarding how to identify high-quality care is ongoing.
If policymakers want to increase the delivery of high-quality child care to at-risk children, the following steps would be effective.
1. Continue to expand investment in tiered reimbursement. Funding increases in the CDC program should be focused on increasing the reimbursement rate for programs that receive a high score in the Great Start to Quality System.
Rationale: High-quality child care is expensive. Increases in the reimbursement rate will help at-risk children access high-quality care. In addition, increasing the reimbursement rate for high-quality care creates an incentive for care providers to increase their quality.
Cost: Bringing reimbursement rates for children from birth through age three to federal benchmarks would cost $73 million. The number of families served in the CDC program has fallen sharply since 2005. If reimbursement rates were raised to the federal benchmarks and the number of children served by the program was increased back to the 2005 level, the cost would be $400 million.
Limiting rate increases to child care providers who receive the highest quality ratings would further limit the cost increase. If Michigan were to increase reimbursement rates for those currently served by three- and four-star quality rated programs to the federal level, the initial cost increase would be $15 million to $20 million per year. In addition, Michigan does not need to move fully to the federal benchmark. Any increase in tiered reimbursement rates would help improve access to high-quality child care.
2. Evaluate the Great Start to Quality System. Validate that the state’s child care rating system provides the highest ratings to providers that are most successful at improving child development, learning, and school readiness.
Rationale: Parents and taxpayers need to be confident that the Great Start to Quality System accurately measures the quality of child care. Michigan’s successful Race to the Top Early Learning Challenge application included a validation of the state’s child care rating system in terms of linkages to child development, learning, and school readiness. Results will need to be carefully examined to ensure that “high-quality” providers under Michigan’s system are actually providing care that leads to improved outcomes.
Cost: Michigan’s successful Race to the Top Early Learning Challenge grant application included $2.4 million for this activity.
3. Fund an awareness campaign for Great Start Connect. Provide resources to ensure that parents are aware of the state’s web resources that provide information on provider quality.
Rationale: The Michigan Department of Education’s web resource (www.greatstartconnect.org), allows parents to access local child care providers’ ratings. Many parents are unaware of this resource, though, and many providers do not participate. Increasing awareness will help connect parents with the highest-quality care and will create incentives for providers to participate.
Cost: Funding an effective awareness campaign will cost an estimated $1 million to $2 million per year.
Preschool for Three-year-olds
At-risk children in Michigan have access to preschool at age four through the Great Start Readiness Program; however, publicly supported preschool programs for three-year-olds in Michigan are far more limited. The research supporting preschool for three-year-olds is not as strong as the evidence supporting other early childhood programs. While some studies show a second year of preschool providing significant benefits, other studies fail to find a significant or lasting impact. Therefore, policymakers may wish to create a pilot program for three-year-old preschool in Michigan prior to providing broader coverage, so that the state can evaluate if this opportunity warrants more significant investment.
If policymakers are interested in expanding access to publicly funded preschool for three-year-olds, we recommend the following approach.
1. Fund a preschool pilot. Fund a pilot program providing preschool to three-year-olds and carefully evaluate the results to establish if a second year of preschool provides a significant enough return on investment to warrant additional investment.
Rationale: While some studies suggest that a second year of preschool can provide significant long-term benefits to at-risk children, the research is not yet conclusive. A pilot program would provide a second year of preschool for some at-risk Michigan children and would provide an opportunity to evaluate the effectiveness of this investment opportunity.
Cost: Assuming a per student cost of $3,625, preschool could be provided for 1,000 three-year-olds at a cost of $3.6 million per year. Providing preschool for 5,000 three-year-olds would cost an estimated $18.1 million per year. Covering the full at-risk population of three-year-olds would cost an estimated $174 million per year.
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