1. 2009 Market Rate Study
Overview and Update

2. Look familiar? Where does this data come from? The Market Rate Survey…
EEC Rates as a Percentile of Market Rates for All Regions
This analysis of the 2006 market prices indicates that it would cost $37 million to raise reimbursement rates to the median market price across the state.

3. Outline Background for Market Price Study
Changes in the 2009 Market Price Study – Cost and Design
Timeline for Completion of the study
Analysis of the Data
Policy Decisions

4. Reasons for Market Rate Studies and the Importance of Accurate Findings
Mandated in CCDF Final Rule as tool to provide equal access (45 CFR 98 and 99)
Ensure parental access to child care market in their community
Conduct no earlier than 2 years prior to submission of CCDF plan
Influences maximum subsidy rates
Maximum subsidy rates that match community prices are most likely to provide access
Access to community child care facilities may affect family financial independence, parental choice, and child care quality
Provides insight into how child care market operates in a state
Characteristics that are associated with price differences
Study of child care prices, a market price study

5. Changes to the Design of the 2009 Market Price Study
Data for the 2009 Market Price Study was collected at the zip code level.
In prior surveys a sample of providers was used to survey the price of care in each region. While this produced accurate regional prices it resulted in a number of areas of the state not having prices for certain types of care. This method did not allow EEC to examine other geographic clusters for prices and for establishing rate reimbursement to providers. One finding of the 2006 Market Rate Survey was that the regions varied greatly in the range of prices that regions contained.
Collecting rate information at the zip code level requires that EEC collect data from more providers than in the past.
This year EEC is collecting data from all full day, full week providers to allow analysis at finer level. This data can be used to describe the actual locations of providers with similar rates and allow EEC to review the existing rate regions and explore amending these regions to better reflect actual provider price groupings.

6. Tight fiscal times… working with partners to complete study
EEC, the EEC Market Price Study Advisory Team, Mills Consulting Group and the CCR&Rs redesigned the surveys used in the earlier studies to simplify them so that the CCRRs could collect uniform data from providers.
Data was collected between January and early March.
The Child Care Resource and Referral (CCRRR) Network collected the price data using NACCRAware, the data system that they use to track provider characteristics and prices.
As a result of working with our partners, the total cost of the 2009 Market Price Study is half of the cost of earlier surveys.

7. Timeline for Market Price Study
Task
Timeline
Design project and Determine most efficient way to gather data
Fall 2008
Issue RFR for Market Price Survey Researcher
November 2008
Amend contract with CCRR Network
December 2008
Review responses and award contract for MPS Researcher
Issue s and letters to programs from the Commissioner making them aware of MPS
January 2009
Monitor progress with CCRR Network
February 2009
Download and clean data with Researchers
March 2009
Consult with Researchers about report
Mar-Apr 2009
75th Percentiles for regions reported
April 2009
Final Report
May 2009
EEC Board Presentation
June –July 2009

8. Data Analysis
Once the price data is collected and compiled by type of care by zip code level, it can be used to determine different percentiles of the areas:
Since ACF requires that states report the 75th percentile of prices, EEC determines this data as follows:
All zip code data can be grouped by region to determine the different percentiles and the median price of care.
This is done by listing the prices of all providers within a geographic area and ranking them from highest to lowest. The capacity of each provider is also listed. Then the 75th percentile of all the prices is determined based on the price paid for the child ranked at 75% of all children served in the area.

9. For example, this map identifies the 75th percentile of preschool prices for children in Massachusetts zip codes using test data from The prices are grouped into four brackets: Below the lowest rate for preschoolers, the rates between the lowest and $40 per day etc. White spaces are where data was not available.

10. Alignment of Geographic Unit and Child Care Markets
Geographic unit options: county, administrative regions, geographic groupings composed of clusters of counties or zip codes
Challenges:
Large number of child care markets
Limited number of price clusters
County may include more than one price cluster
Solutions include creating geographic groupings composed of counties or zip codes which link each grouping with:
A price cluster; or
A demographic characteristic highly correlated with child care prices (e.g., female earnings, median housing, household earnings, or percent urban)
The following charts and maps are examples of how Massachusetts data may look after this analysis.
These maps describe the frequencies of preschool zip code prices for There were 4 zip codes where the 75th percentile is about $148 per week. Then this distribution of data was analyzed using a statistical package to identify 3 and 4 natural breaks and then mapped.

11. Distribution of 75th Percentiles by Zip Code (from prior MPS)

12. Example of Rate Regions Based on 4 groupings of Preschool 75th percentile Market Prices using Jenks Natural Breaks

13. Example of Three Price Groupings Of Preschool 75th percentiles using Jenks Natural Breaks

14. For more information:
Rod Southwick Director of Research Corey Zimmerman Director of Strategic Planning and Analysis