4.2 Assess Market Rates and Analyze the Cost of Child Care

To establish subsidy payment rates that ensure equal access, Lead Agencies must collect and analyze statistically valid and reliable data and have the option to conduct either a (1) market rate survey (MRS) reflecting variations in the price to parents of child care services by geographic area, type of provider, and age of child, or (2) an ACF pre-approved alternative methodology, such as a cost estimation model, which estimates the cost of care by incorporating both data and assumptions to estimate what expected costs would be incurred by child care providers and parents under different scenarios. All Lead Agencies must analyze the cost of providing child care through a narrow cost analysis or pre-approved alternative methodology. Prior to conducting the MRS or pre-approved alternative, Lead Agencies must consult with the State Advisory Council on Early Childhood Education and Care (designated or established pursuant to the Head Start Act (42 U.S.C. 9837b(b)(1)(A)(i)) or similar coordinating body, local child care program administrators, local child care resource and referral agencies, and other appropriate entities; and organizations representing child care caregivers, teachers, and directors. Prior to conducting the MRS or pre-approved alternative methodology, Lead Agencies must consult with the State Advisory Council on Early Childhood Education and Care (designated or established pursuant to the Head Start Act (42 U.S.C. 9837b(b)(1)(A)(i)) or similar coordinating body, local child care program administrators, local child care resource and referral agencies, and other appropriate entities; and organizations representing child care caregivers, teachers, and directors. Note: Any Lead Agency considering using an alternative methodology instead of a market rate survey to set payment rates, is required to submit a description of its proposed approach to OCC for pre-approval in advance of developing and conducting the alternative methodology. Advance approval is not required if the Lead Agency plans to implement both an MRS and an alternative methodology to set rates at a percentile of the market rate, but a Lead Agency conducting a limited market rate survey and using it to inform their cost model would need pre-approval for this approach. In its request for ACF pre-approval, a Lead Agency must provide details on the following elements of their proposed alternative methodology: • Overall approach and rationale for using proposed methodology • Description of stakeholder engagement • Data collection timeframe (if applicable) • Description of the data and assumptions included in the methodology, including how these elements will yield valid and reliable results from the model • Description of how the methodology will capture the universe of providers, and reflect variations by provider type, age of children, geographic location, and quality 4.2.1 Completion of the market rate survey or ACF pre-approved alternative methodology Did the Lead Agency conduct a statistically valid and reliable MRS or ACF pre-approved alternative methodology to meet the CCDF requirements to assess child care prices and/or costs and determine payment rates? Check only one based on which methodology was used to determine your payment rates. a. [x] Market rate survey. i. When were the data gathered (provide a date range; for instance, September – December 2023)? February 2024 through March 2024 b. [ ] ACF pre-approved alternative methodology. i. [ ] The alternative methodology was completed. ii. [ ] The alternative methodology is in process. If the alternative methodology was completed: When were the data gathered and when was the study completed? Describe any major differences between the pre-approved methodology and the final methodology used to inform payment rates. Include any major changes to stakeholder engagement, data, assumptions or proposed scenarios. If the alternative methodology is in progress: Provide a status on the alternative methodology and timeline (i.e., dates when the alternative methodology activities will be conducted, any completed steps to date, anticipated date of completion, and expected date new rates will be in effect using the alternative methodology). c. Consultation on data collection methodology. Describe when and how the Lead Agency engaged the following partners and how the consultation informed the development and execution of the MRS or alternative methodology, as appropriate. iii. State Advisory Council or similar coordinating body: BCDHSC requested the Child Care Advisory Council promote to child care programs via email and social media. The market rate survey was available in the BCDHSC database NH Connections Information System (NHCIS) to complete and communicated request to complete via email directly to all child care programs. The state administrator attended the Child Care Advisory Council meeting and collaborated with Early Learning New Hampshire to discuss the change to the survey being available in the data system NHCIS and how this would impact the results of the survey prior to the MRS being marketed to the child care programs. The Child Care Advisory Council shared concern with the change in the method of gathering information, NHCIS data entry rather than Survey Monkey as done in previous years. It was decided to shift to the entering directly into the system and work with Child Care Aware to provide technical assistance for programs who needed extra support to update their information. iv. Local child care program administrators: N/A v. Local child care resource and referral agencies: Lead Agency staff met with Child Care Aware of NH to develop communication and training materials prior to the MRS being marketed to inform providers of the new MRS methodology with consultation on how to present the information to providers by creating a worksheet, detailed instructions and CCA support methods during the MRS period. vi. Organizations representing child care caregivers, teachers, and directors from all settings and serving all ages: New Hampshire Children's Trust, a contracted vendor for BCDHSC, was consulted prior to create marketing materials that provided user friendly language and supports to complete the market rate survey. This collaboration helped guide the Lead Agencies marketing of the MRS in order to clearly define the ask and the why behind participation and how it influences reimbursement rates from the state Scholarship Program. vii. Other. Describe: N/A d. An MRS must be statistically valid and reliable. An MRS can use administrative data, such as child care resource and referral data, if it is representative of the market. Please provide the following information about the market rate survey: i. When was the market rate survey completed? 5/21/2024 ii. What was the time period for collecting the information (e.g., all of the prices in the survey are collected within a three-month time period)? February 1st through March 18th, 2024. Child care programs are encouraged to update their information in NH Connections Information System (NHCIS). iii. Describe how it represented the child care market, including what types of providers were included in the survey: All programs in NHCIS were targeted for participation. This included all licensed and licensed exempt programs as well as all programs enrolled in Child Care Scholarship. This included relative providers, family child care providers, group and center-based programs. iv. What databases are used in the survey? Are they from multiple sources, including licensing, resource and referral, and the subsidy program? NH Connection Information System (NHCIS) and Survey Monkey were used. Child Care Licensing and Child Care Aware of New Hampshire our resource and referral contractor use NHCIS for all data entry. v. How does the survey use good data collection procedures, regardless of the method for collection (mail, telephone, or web-based survey)? NH used the system all providers use to maintain licensing and Child Care Scholarship compliance to complete the market rate survey. This web based collection of data tied to the program profile in NHCIS is encouraged to be updated 2 times annually. Child Care Aware of NH supports with training and technical assistance to enter the market rate survey data. vi. What is the percent of licensed or regulated child care centers responding to the survey? 72.00 vii. What is the percent of licensed or regulated family child care homes responding to the survey? 68.00 viii. Describe if the survey conducted in any languages other than English: Not applicable ix. Describe if data were analyzed in a manner to determine price of care per child: The Market Rate Survey determined the price of care per child by age of child, program type and by full time care. x. Describe if data were analyzed from a sample of providers and if so, how the sample was weighted: NH's Market Rate Survey is emailed to every licensed early childhood and school age program in the state based on a list provided by the DHHS CCLU. Follow-up telephone calls, sufficient to achieve a minimum 60% response rate in each of five regional areas of the state, with a minimum of 20% of each type of care being represented in the regional sampling (e.g.. center-based, family child care), are conducted following an initial response period of two weeks. To confirm the accuracy of provider responses, Child Care Aware of NH provides independent verification of responses for a random sample of participating child care programs, across the two types of care. e. Price variations reflected. The market rate survey data or ACF pre-approved alternative methodology data must reflect variations in child care prices or cost of child care services in specific categories. i. Describe how the market rate survey or pre-approved alternative methodology reflected variation in geographic area (e.g., county, region, urban, rural). Include information on whether parts of the State or Territory were not represented by respondents and include information on how prices or costs could be linked to local geographic areas. The NH Market Rate Survey is conducted on a statewide basis. Program location is collected by town, which enables the researcher to analyze data within each region of the state. The goal was to survey at least 60% of licensed NH early childhood and school age programs. ii. Describe how the market rate survey or pre-approved alternative methodology reflected variation in type of provider (e.g., licensed providers, license-exempt providers, center-based providers, family child care home providers, home based providers). The NH Market Rate Survey is conducted by the list of Child Care Licensing programs and also the LE program list from the BCDHSC. The survey shows the percentage of each program type. iii. Describe how the market rate survey or pre-approved alternative methodology reflected age of child (e.g., infant, toddler, preschool, school-age): The NH Market Rate Survey is broken down by age of child. The survey asks for children from infant (6 weeks) through 12 years by age range: 6 weeks to 12 months, 13-24 months, 25-35 months, 36-59 months, 60-72 months, and 72-155 months. iv. Describe any other key variations examined by the market rate survey or ACF pre- approved alternative methodology, such as quality level: The Market Rate Survey shows the percentage of programs who are Licensed Plus and NAEYC Accredited. 4.2.2 Cost analysis If a Lead Agency does not complete a cost-based pre-approved alternative methodology, they must analyze the cost of providing child care services through a narrow cost analysis. A narrow cost analysis is a study of what it costs providers to deliver child care at two or more levels of quality: (1) a base level of quality that meets health, safety, staffing, and quality requirements, and (2) one or more higher levels of quality as defined by the Lead Agency. The narrow cost analysis must estimate costs by levels of quality; include relevant variation by provider type, child’s age, or location; and analyze the gaps between estimated costs and payment rates to inform payment rate setting. Lead agencies are not required to complete a separate narrow cost analysis if their pre-approved alternative methodology addresses all of the components required in the narrow cost analysis. Describe how the Lead Agency analyzed the cost of child care through a narrow cost analysis or pre-approved alternative methodology for the FFY 2025–2027 CCDF Plan, including: a. How did the Lead Agency conduct a narrow cost analysis (e.g., a cost model, a cost study, existing data or data from the Provider Cost of Quality Calculator)? The lead agency collected some NCA analysis data from providers during the previous plan year but had limited response. The lead agency plans to enhance this developed process and incentivize programs to include this data with support from Child Care Aware b. In the Lead Agency’s analysis, were there any relevant variations by geographic location, category of provider, or age of child? The lead agency collected some NCA analysis data from providers during the previous plan year but had limited response. The lead agency plans to enhance this developed process and incentivize programs to include this data with support from Child Care Aware. NH will categorize data by program type and geographic location as well as by age groups. c. What assumptions and data did the Lead Agency use to determine the cost of care at the base level of quality (e.g., ratios, group size, staff compensations, staff training, etc.)? The lead agency collected some NCA analysis data from providers during the previous plan year but had limited response. The lead agency plans to enhance this developed process and incentivize programs to include this data with support from Child Care Aware. NH will categorize data by program type and geographic location as well as by age groups. d. How does the Lead Agency define higher quality and what assumptions and data did the Lead Agency use to determine cost at higher levels of quality (e.g., ratio, group size, staffing levels, staff compensation, professional development requirements)? A Lead Agency can use a quality improvement system or other system of quality indicators (e.g., accreditation, pre-Kindergarten standards, Head Start Program Performance Standards, or State-defined quality measures). The lead agency collected some NCA analysis data from providers during the previous plan year but had limited response. The lead agency plans to enhance this developed process and incentivize programs to include this data with support from Child Care Aware. NH will categorize data by program type and geographic location as well as by age groups. NH will compare rates based on Quality rating through the NH Granite Steps for Quality program. e. What is the gap between cost and price, and how did the Lead Agency consider this while setting payment rates? Did the Lead Agency target any rate increases where gaps were the largest or develop any long-term plans to increase rates based on this information? The lead agency collected some NCA analysis data from providers during the previous plan year but had limited response. The lead agency plans to enhance this developed process and incentivize programs to include this data with support from Child Care Aware. NH will categorize data by program type and geographic location as well as by age groups. NH will review the findings to determine gaps and potential to increase rates. 4.2.3 Publicly available report on the cost and price of child care The Lead Agency must prepare a detailed report containing the results of the MRS or ACF pre- approved alternative methodology and include the Narrow Cost Analysis if an ACF pre-approved alternative methodology was not conducted. The Lead Agency must make this report widely available no later than 30 days after completion of the report, including posting the results on the Lead Agency website. The Lead Agency must describe in the detailed report how the Lead Agency took into consideration the views and comments of the public or stakeholders prior to conducting the MRS or ACF pre-approved alternative methodology. a. Describe how the Lead Agency made the results of the market rate survey or ACF pre-approved alternative methodology report widely available to the public by responding to the questions below. i. Provide the date the report was completed: 6/7/2024 ii. Provide the date the report containing results was made widely available (no later than 30 days after the completion of the report): 6/10/2024 iii. Provide a link to the website where the report is posted and describe any other strategies the Lead Agency uses to make the detailed report widely available: https://www.nh-connections.org/market-survey/ iv. Describe how the Lead Agency considered partner views and comments in the detailed report. Responses should include which partners were engaged and how partner input influenced the market rate survey or alternative methodology: The state advisory council were advised during their regularly scheduled meetings and also they were informed via email and leadership meetings. Local child care program administrators: Child Care providers were notified of the requirements, benefits, and procedure for completing the Market Rate Survey (MRS) through NHCIS on Feb 1 with reminders through e-mail and USPS throughout the month. Local child care resource and referral agencies: The NH Child Care advisory Council (CCA) provided technical support to providers, presented a webinar on the MRS process, promoted the MRS. Organizations representing child care caregivers, teachers, and directors from all settings and serving all ages: In addition to CCA, the states afterschool professional development organization sent out information promoting the MRS.