The Massachusetts Child Care Quality Cost Model

Anne MitchellAndrew Brodsky

Presentation to the Massachusetts Department of Early Education and Care

September 28, 2012

Project Goals

Identify child care cost drivers of levels from licensing through QRIS levels

Create interactive model to estimate costs of child care quality in MA

Estimate cost implications of changing reimbursement rates

Identify current and potential financing strategies for child care quality

Cost Methodology

Baseline cost estimates based on cost of licensing

Cost to achieve given distribution of quality based on analysis of cost-related components of QRIS system

If data are available, costs determined separately by region

Excel Model Features

Allows user to change distribution of quality (beginning at licensing)

Allows user to adjust supports for high quality child care (such as grants) and view resulting costs

Allows user to adjust reimbursement rate structure

Excel Model Output

Current and projected enrollment by age and setting

Additional costs based on changes to enrollment and quality distribution, by setting

Additional costs based on changes to reimbursement rates

Cost of quality grants to providers

Factors Affecting Quality

Higher quality ECE costs more than most families can afford

Market-based ECE encourages price competition – low tuition fees – and discourages investments in quality

Considerations for Estimating Costs

Expense drivers: Ratios Group size Staff compensation (salary and benefits)

Revenue drivers: Parent tuition fees/other revenue Revenue collection Enrollment efficiency

Provider perspective: Iron Triangle

Full Enrollment

Full Fee Collection

Revenues Cover Per-Child Cost

Supporting Financial Stability

State can… Set family income eligibility high for entry and

higher for exit Use contracts more than vouchers Set rate ceilings as high as feasible

Providers can… Fill vacancies immediately to keep enrollment as

close to 100% as possible Collect all revenue on time Diversify revenue: Participate in CACFP, PreK &

other revenue sources

DRAFT - 3-27-12

Considerations for Estimating Cost: QRIS

Requirements in licensing rules

QRIS expectations increase by levels

Primarily better qualified staff as quality increases (higher compensation)

More staff time for assessment, family activities and conferences, curriculum planning, staff meetings

One-time costs for equipment

DRAFT - 3-27-12

Massachusetts QRIS SystemCurriculum and Learning

 

     

Level 1 (from regs) Level 2 Level 3 level 4Max group & staffInfants: 7 w/2 staffToddlers: 9 w/2 staffPreschoolers: 20 w/2 staffSchool-age: 26 w/2 staff 

professional development incurriculum, screening tools, and formative assessment

professional development in the curriculum; using the MA ELGs; documenting children's progress; and working with children from diverse languages and cultures and second language acquisition.

 

  ITERS/ECERS self-assessed score avg 3.0(no item below 3.0)

reliable scores:ITERS/ECERS avg 5.0 (no item below 4.0)CLASS 3+

reliable scores:ITERS/ECERS avg 6.0 (no item below 5.0)CLASS score 6-7

Written child progress report shared with parents: 4 x year for infants/toddlers2 x preschoolers1 x school-agers

  Progress reports with parents 3 x year and 4 x year for 0-3 +/or CWD

 

    outside consultants with expertise in children's behavior and mental health to provide support and assistance to staff

 

Massachusetts QRIS SystemWorkforce qualifications and professional development 

   

Level 1 Level 2 Level 3 level 4Director I: lead teacher qualified plus 2 credits in child care admin and 2 credits in ECE/CDDirector II: same as I plus 2 credits

Administrator has CDA plus training in adult supervision, MA ELGs, Strengthening Families, and MA core competencies

Administrator has BA (or progress toward achieving it) with 24 credits ECE and 9 credits admin/mgt

Plus 5 years’ experience

Lead teacher: age 21, high school plus 12 credits ECE/CD or high school plus CDA (specific to 0-3 or preschool)Teacher: age 21 or high school diploma/GED plus two-year high school vocational program in early childhood education or CDATeacher assistant: age16 or high school diploma

All staff min high school plus all educators min 3 credits in ECE

50% of classrooms have educator with BA or higher

 

75% have BA or higher

 

100% BA or higher and all have 30 credits ECE

20 hrs PD annually (FT staff)

All staff have IPDP    

Example Provider-Level Output (NOT Mass.)Center: 106 children, infants, toddlers and preschoolers

QUALITY Net Income as

% of ExpenseAnnual

Gap/ChildRegulated $828,943 Expense

$847,626 Revenue$18,683 Net Income 2% $176

Star 2 $846,319 Expense$847,626 Revenue

$1,307 Net Income 0% $12

Star 3 $890,845 Expense$855,825 Revenue($35,020) Net Income -4% ($330)

Star 4 $946,116 Expense$873,394 Revenue($72,722) Net Income -8% ($686)

Star 5 $1,014,520 Expense$882,765 Revenue

($131,756) Net Income -13% ($1,243)

Quantify the Gap in $

Quantify the Gap as %

Massachusetts Cost of Quality Survey (2012)

Used in the model

Data confirms BLS wages, cost of training and continuing professional development

Data informed non-personnel costs Materials and equipment Child screening and assessment