Innovative Business Model Advances Quality Child Care

Publication Date: December 20, 2011

High quality child care has been proven time and again to be one of the most important factors in the development of a child’s brain. Yet in our society, quality care is chronically under-resourced and inaccessible to many. But thanks to the development of a shared services business model, new economies of scale are being realized for child care providers in our region.

Over the past decade in Pennsylvania, significant child care reforms have taken place – including the establishment of quality standards and the dedication of new resources – but challenges remain for many child care providers, who frequently struggle to operate in the black while achieving the level of quality that children need and deserve.

As part of a longstanding commitment to increasing the supply and quality of early care and education, WPF is funding Shared Services, a new business model created by the Delaware Valley Association for the Education of Young Children (DVAEYC) and the Public Health Management Corporation’s (PHMC) Targeted Solutions consulting unit.

According to Ronnie Bloom, WPF’s program director for Children, Youth, & Families, the model gives child care centers a “powerful means to attain economies of scale that help them with the double bottom line of maintaining quality and staying in business in this tough economic climate. “

We asked the leaders of the Shared Services project, Sharon Easterling of DVAEYC and Amy Friedlander of PHMC’s Targeted Solutions to tell us more about the model and how it is changing child care in Pennsylvania.

What problem does Shared Services seek to address?

SHARON EASTERLING:  Child care quality is incredibly important in supporting a child’s growth and development, but in the United States, child care is chronically underfunded and consistently of marginal quality. Quality initiatives such as Keystone STARS have tried to address the problem by linking additional financial resources to meeting higher standards – but we have found that the level of financial support does not keep pace with the additional cost of higher standards – and therefore, providers are finding it difficult to meet and sustain high quality programming.

AMY FRIEDLANDER:  Providers typically do not use automation to its fullest potential. As a result, directors spend more time tracking down information, calculating due dates for forms and outstanding monies owed by hand, and counting hours of professional development staff received or the number of days a child was in care during a month than is necessary. This time and energy could be better spent addressing the pedagogical and quality needs of the center.

What is the Shared Services model, and how is it improving centers’ ability to provide quality care?

EASTERLING:  Providers benefit by participating in a local alliance and are able to evolve from isolated, stand-alone programs to a network of high quality programs that share back office functions for maximum efficiency and effectiveness. The program leverages the collective buying power of child care providers across the country through competitive pricing for the goods and services child care programs are using. These cost savings are reinvested back into critical elements such as staff compensation and benefits, to help sustain the quality effort. It also serves as a repository for our collective knowledge on best practices. Providers, who are working to meet the higher standards of STARS or national accreditation, save significant time and effort by building on the work of those who have gone before.

How does the model work for providers?

FRIEDLANDER: We’ve developed two in-depth services for providers that are designed to help them conduct administrative tasks more efficiently and effectively, thereby allowing them to focus on quality programming. ChildWare is a web-based management information system custom-designed to help centers meet Pennsylvania child care requirements and funding streams. ECEhire.com is a source of qualified, screened candidates for providers in need of teachers. Providers can license ChildWare for an annual fee. Targeted Solutions provides on-site training and data entry to help providers get up and running with ChildWare, makes a user manual available on-line, and conducts monthly phone calls with ChildWare users to review administrative and management reports that might identify problems for further review. Child care centers can review teacher candidates on the ECEhire.com website after registering. If they find someone they want to interview, they use their credit card on the website to purchase their contact information. They can also purchase the credentials that Targeted Solutions has gathered on the candidate for an additional fee.

What sorts of challenges have you experienced in creating and implementing this model?

EASTERLING: Getting the attention of child care directors who are largely overworked and underpaid! It sometimes feels like if we ask them to think about “one more thing” it will be the proverbial straw that broke the camel’s back. Most programs WANT to implement the changes we are offering through shared services. Finding the time to convert a data base, or fill out credit applications, etc., continues to be challenge. We are working to address this by offering technical assistance with these tasks – much as we now do for Keystone STARS.

FRIEDLANDER: Intensive services require time from providers to implement. Time is perhaps the most scarce resource in the child care field! We use technology to assist with this challenge whenever we can, including the ability to “capture” a ChildWare user’s screen so that Targeted Solutions staff can see what the user is seeing and walk her through her moment of confusion.  

How is Shared Services improving the fiscal health of the field?

FRIEDLANDER: There is no question that using automation to invoice payors will assist individual centers to improve their billing ratios. ChildWare has multiple fiscal reports that providers can use to track what they have billed against the funds that have been received, to look at amounts owed by specific families, to look at the lag time between invoice submission and payment, etc. Directors can also use ChildWare to begin to look at revenue by classroom and waiting list by child age in order to plan fiscally sound expansion, to look at vacancy by classroom to look at expansion/contraction issues, and to look at referral sources in order to better market their programs. Directors that use ECEhire.com are saving hours (and dollars) involved with creating and posting recruitment ads, reviewing responses received, scheduling and conducting interviews, verifying preferred candidate education and experience. As more centers use these tools, we hope that their fiscal health will improve.
 
What is the impact of Shared Services on the lives of children and families?

EASTERLING: Whenever a program is able to meet higher standards and teachers are supported in best practices, children benefit. Young children who attend a child care program from infancy through kindergarten, will spend more time in child care than in all their K-12 years combined. This is the time in a child’s life when the brain is in its most formative state. The importance of providing a high quality child care environment for these children cannot be overstated – and Shared Services contributes to the field’s ability to reach and sustain high quality standards.