In rating child care provider quality, Wisconsin can learn from other states

In June 2010, Wisconsin’s Joint Committee on Finance approved YoungStar, a new quality rating and improvement system (QRIS) for the state’s nearly 8,500 child care providers. YoungStar supporters believe the new system will improve the overall quality of childcare in Wisconsin by motivating and supporting providers to make quality improvements and by providing parents with the information they need to choose high-quality child care options.

In the Forum's latest Research Brief, we examine several issues and challenges that have arisen in other states or jurisdictions with QRIS policies, how those entities have tackled those challenges, and the lessons their experiences might yield for Wisconsin. We found five common implementation challenges that have confronted other states and that have the potential to occur in Wisconsin, as well.

1. Bridging the disconnect between theory and policy: QRIS policies are partly based on a theory that greater demand for quality child care will cause quality to improve. Yet, the QRIS policy provides incentives to child care suppliers, not those in demand of care. This disconnect can be bridged via extensive outreach to parents to educate them about the rating system and its benefits, or by creating financial incentives for parents to choose higher-quality care. Wisconsin is planning an outreach effort, but may also wish to explore demand-side incentives should it become clear that demand for higher-quality care is lacking even after YoungStar is fully implemented.

2. Establishing meaningful differences in quality across tiers: QRIS policies assume that there are real differences in quality across the ratings tiers—meaning higher-rated providers benefit child outcomes more than lower-rated providers. If tiers are poorly defined, or if the cut-points between tiers are arbitrary, there may not be meaningful difference in quality between providers with different ratings. Wisconsin will not know if this is a problem until all providers have been rated and have had time to make improvements needed to move up along the tiers.

3. Coordinating QRIS policy with existing quality improvement policies: Wisconsin already has several policies and funding streams in place aimed at improving child care quality. Coordinating these efforts with QRIS so as to maximize the positive outcomes of these many investments could potentially be a challenge. Provisions regarding technical assistance and improvement grants appear to be reinforcing QRIS goals; however, professional development scholarship and stipend programs have yet to be tied to YoungStar.

4. Promoting higher quality systemwide without causing higher costs systemwide: Increasing the state reimbursement to child care providers serving low-income families as their quality ratings increase, otherwise known as tiered reimbursement, is a common incentive used in many states. Wisconsin’s tiered reimbursement strategy is unique, however, in that it not only increases reimbursement for highly-rated providers, but also reduces reimbursement for low-quality providers. As no other state has implemented a carrot and stick approach, Wisconsin cannot use other states’ experiences to predict the effect the tiered reimbursement will have on costs to private pay parents.

5. Inadequate financial planning: Improving the quality of the child care market is a costly endeavor. To do so will require adequate and sustainable revenue sources, not only for conducting YoungStar rating and improvement processes, but also for subsidizing the higher program costs that may result from the improvements. Because Wisconsin has a unique tiered reimbursement structure, the financial plans of other states are not useful in helping estimate potential costs here.

Despite the 26 child care quality rating and improvement systems across the country, a robust body of research has yet to develop that can provide insight into the effectiveness of specific state child care regulatory policies. As a result, Wisconsin, like other states, must be prepared to closely monitor the costs and the child outcomes resulting from its QRIS policy, and make policy changes as necessary.