In 1996, Kansas launched the nation's most sweeping attempt to radically transform the child welfare system by implementing a privatized form of managed care. Four years later, the child welfare system shows signs of instability and seems very much in transition. This report examines the current status of the child welfare system in Kansas and makes recommendations for future directions. The report is presented in five sections. Section 1 summarizes the findings and recommendations of Kansas Action for Children. Section 2 describes the system's success in meeting performance standards for safety, permanence, and well-being of children and families; assesses how well the system is meeting goals of system change; presents a cost-benefit analysis that demonstrates how public dollars have been used and to what effect; and assesses the stability and legitimacy of the child welfare system. Section 3 discusses the consensus on the need for change in the child welfare system, Kansas' choice to privatize and use some tools of managed care, and systemic problems in the system, including the lack of an inclusive planning process, hurried implementation, and role confusion. Section 4 examines the abandonment in 2000 of managed care in favor of a per-child, per-month payment system. Section 5 presents recommendations for Kansas' child welfare system related to needed data on system improvement and children's well-being, stemming the flow of children into the system, examining contracting practices, and creating fiscal incentives. Contains 18 endnotes. (KB)