January 6, 2021

The Value of Harms Avoided: Calculating the Cost of a Fragmented System of Social Services

By Kelly Robson | Hailly T.N. Korman | Rebecca Daulton

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Young people who experience disruptive and traumatic events, such as homelessness, foster care placement, incarceration, and unmet mental and physical health needs, rely on our nation’s child-serving agencies for support to navigate their circumstances, heal from trauma, and return to school, work, and life as healthy and productive citizens. 

Unfortunately, too often our existing service agencies fall short of meeting the needs of these youth. Research shows that many young people who experience these kinds of events must navigate several of these circumstances simultaneously, or in quick succession, and that the negative outcomes of these experiences tend to compound. As a result, students who experience a disruptive event in youth are more likely to experience homelessness, to have unplanned or unwanted pregnancies, and to end up in jail throughout their lifetimes.   

There are many reasons that existing service agencies struggle to provide young people with the supports needed to avoid negative outcomes in adulthood, including stretched capacity and lack of funding. However, the fragmented, siloed nature of child-serving agencies also means that agencies aren’t sharing information, which can result in wasted funds and resources, overlapping or duplicative services, and gaps in support for families.

While there’s no easy solution to these challenges, one lever politicians and policymakers consistently pull when seeking to fix the system is funding. Cutting funding, increasing funding, using existing funding differently…proposals and legislation are all over the map, with no clear solutions in sight. While far from a solution, what could help move the conversation forward is a more nuanced understanding of what’s actually being spent to “reactively” address the traumatic, disruptive events that young people face, in comparison to what would be spent if these events were addressed more proactively.

That’s where this brief comes in. The Value of Harms Avoided: Calculating the Cost of a Fragmented System of Social Services attempts to calculate both the cost of the current system across multiple disruptions that young people might face and the cost of a hypothetical system in which the first intervention works—allowing the individual to leverage support systems in the future at the rate and cost of a person who did not experience a disruptive event as a child.

Based on our calculation, such a system could free up more than $1.5 trillion over the lifetimes of the cohort of youth currently served by care agencies. That is roughly $612,000 per person currently served by any one system. Those dollars could be reinvested in communities, providing additional funds to schools, healthcare services, the environment, or anything else. 

In our approach, we set out to answer three key questions: 

  • What is the cost of the current system? We know that any time a young person accesses services from a government agency, there are costs. Research also tells us that, on average, young people who experience disruption and trauma rely more heavily on the social service net as adults than those who did not experience disruption and trauma. As a result, we estimate the cost of the current system by calculating both immediate and future costs. 
  • What would costs look like if the first intervention worked? We recognize that no system can ever fully eliminate disruptive and traumatic events. However, we believe that the system can get better at addressing those circumstances, ultimately allowing young people to receive the support and healing they need to achieve the same life outcomes as their peers. Here, again, we calculate immediate and future costs, estimating costs to the system if a disruptive or traumatic event in youth or young adulthood predicted neither additional traumatic events in youth nor greater-than-average reliance on social services in adulthood.
  • What is the “value of harms avoided”? Here, we look at the difference between the current system and one in which the first intervention worked. How many dollars could be saved and repurposed elsewhere in the community?

For details on the methodology we used to examine the questions above and to arrive at our estimation (and to view an appendix of our sources, as well as notes on data limitations and any assumptions we had to make) download the brief.

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