I am thinking of an industry that performs a vital public service with unlimited demand. But it is marked by cost increases that far outstrip inflation, extreme specialization, and a lack of coordination.
Sounds familiar, right?
But I am thinking of healthcare, not higher education.
In many respects, reform of healthcare and higher education are proceeding on parallel tracks. Both are immense industries, with core products that are essential to well-being, heavily subsidized by the public, and entrapped by outdated business models.
There is a striking difference: While higher education still seems just short of its Day or Reckoning, healthcare had its crisis of cash and conscience a few years ago. Healthcare, therefore, is several years ahead in reform, speeded, of course, by the passage of Health Care and Education Reconciliation Act of 2010 (see how often those terms get paired!)
The ways in which healthcare reform has developed could, therefore, be a template, of sorts, for the reform of higher ed. Listen, for example, to the clarion calls for a presidential commission on the future of higher education, kind of like Obamacare for colleges.
A lot of the reforms in healthcare are the subject of intense study. This, among other reports, nicely sums up many of the issues. These studies serve as good jumping off point to ponder:
1. What can colleges and universities learn from healthcare reform?
2. Are some of the pilot projects and new ways of doing business that hospitals and healthcare systems are trying illustrative of possible solutions to the conundrums that higher education is facing?
Here are five of the defining pathways of healthcare reform and how they might relate to higher education:
- Outcome-based solutions rather than fee-for-service. The biggest cost driver in healthcare has been the model most of us have known forever: every doctor does what is needed for a patient, then passes the patient on to another doctor (usually a specialist), where the whole process starts all over again. Multiple blood tests, multiple x-rays, multiple filling out of paperwork. Each doctor is able to extract the maximum fees; the system discourages cooperation. Now accountable-care-organizations are driving doctors to work as teams to resolve the needs of each particular patient, while being held accountable for the quality of care to the patient and whoever is paying the bill (such as Medicare or insurance companies).
How does this apply to higher ed? The comparison to how colleges operate is spot-on. Most colleges exist in in a bubble, repeating the same procedures and buying the same expensive equipment as the competitor right up the street rather than cooperating with that competitor. Credits don’t often transfer, core courses (like blood tests or x-rays) need to be repeated. Each student has to fit into the system of the university — with classes only offered at certain times and locations and certain required credits, for example — rather than a college, or several colleges, pooling resources to arrive at programs or classes that best serve the needs of the students. If administrators and instructors formed the equivalent of “accountable care organizations,” it would change the way universities approach education.
- An emphasis on patient experience. You may not have felt this way on your most recent visit to your primary-care physician, but hospitals and healthcare plans are increasingly placing value on customer service. The philosophy is that patients who are treated well and given good follow-up care won’t be so intimidated by the healthcare complex, and seek out treatment early rather than waiting until their symptoms have multiplied and worsened and become, therefore, much more expensive.
How does this apply to higher ed? College students are typically assigned an advisor or counselor. But how proactive are they? After all, a student who never asks a faculty advisor for anything is time saved for that faculty member.
Amidst this inattention, how many students flounder through changes in majors, dropped classes, and crises in confidence? The student might not know where to get help or be too intimidated or embarrassed to ask for it. All the while, that student is piling up debt. If systems were in place to identify those students and give them deep personal attention, it would show that the university cares about their well-being and wants to guide them ethically through their options.
- Put more practitioners into management. Hospitals are always seeking doctors who are willing to learn the pressures and realities of the economics of healthcare. They find very few takers. Among other reasons, a doctor with knowledge of both the finances of a hospital and the realities of patient care could be a bridge between the two groups, and help find compromise. The lack of aspiration to management, and a refusal to consider the perspective of management only allows bad feelings to fester.
How does this apply to higher ed? We have written about this before. Many universities are caught in an us vs. them showdown between administrators and faculty members that must be resolved if many campuses are to make real progress in taming the financial challenges that they face. There are few bridges across this chasm because former faculty members who have joined the administration are seen as sell-outs. This is a difficult problem to manage, but university leaders must realize that faculty members who can speak to both sides of this debate and retain their integrity are a rare commodity. They should be nourished.
- Making more data-based decisions. The growing prevalence of electronic medical records and the gathering and crunching of the data they produce has allowed doctors to identify trends and similarities among disparate patient groups that couldn’t have been seen before. This has helped in making correct decisions on treatment of patients as well as in saving money by identifying inefficiencies..
How does this apply to higher ed? Most universities teach efficiency but don’t practice it. They insist that education is not a commodity and cannot be treated like one. Yes, there is truth in that. But universities are large operations, and they have missed opportunities to identify preferences, tendencies and needs that can be found in data.
Interestingly, the university departments with the most important impact on the bottom line — admissions, financial aid, and development — are striking exceptions to the usual way of doing business on campuses. All are highly sophisticated and data-driven. Admissions departments have become increasingly adept at identifying students that are likely to attend their institution, and zeroing in on the factors or enticements needed to get that student in the door. Financial-aid departments have developed algorithms to help them determine exactly how much aid to offer a student to maximize the chance of matriculation while also guaranteeing the highest possible revenue. Likewise, colleges and universities are among the most successful fundraisers in the world, using highly-specialized technology for keeping track of potential givers and to understand their tendencies to give and how much they can afford to donate.
If that level of data-based operation is possible in one area of a university, why not in others? Universities could be using data to understand the best approach to teaching students, preferred formats (online or in person), and times to offer classes, among other things. The “business” departments, such as facilities, purchasing and residential life, could be combining forces to get better deals from vendors and a deeper understanding of how they need to change their operations to be more efficient and to please their customers. That is not to say that none of this is occurring now, but more advances in efficiency are certainly possible.
- We have enough specialists — we need more primary-care physicians. When you hear about the doctor shortage, experts are really referring to a shortage of general practitioners or internal-medicine doctors. Most medical students — nearly 80 percent — prefer to be specialists, lured by better pay and working conditions. Who wants to spend all their time haggling with insurance companies, as many general-practice doctors do? As a result, the medical establishment is looking for ways to push more medical students into general practice, including guaranteed hours and bonuses for producing positive outcomes in patients.
It is indeed a time of deep soul-searching for young doctors. After spending years and tens of thousands of dollars on undergraduate education, medical school, internships and residencies, a growing number of young doctors report that they regret their choice of profession. As this forum shows, many worry about paying off their debt and whether there will be need for specialists in the future. But doctors are also showing a growing acceptance of their new reality — a system that had lost all cost controls and had to be hemmed in by federal legislation. It is not going back to the free-for-all that it was. And even with more cost containment, the average starting salary for a family-practice physician is about $189,000, still one of the highest-paying livings out there.
How does this apply to higher ed? The analog is pretty simple: Being a college professor is still one of the best (and more remunerative) occupations out there. It is a position of trust in a fulcrum of constant change. But, like the job of a doctor, it is changing forever.
Professors, by definition, are experts in their field. To ever become a professor, a person, of course, needs to devote years of study to a given topic. But can that system last? We would guess No. Universities simply are not going to be able to maintain departments of every subject under the sun, when the same departments exist at dozens, perhaps hundreds, of either neighboring or peer institutions. The economics of such repetition cannot make sense indefinitely.
It is, and it should be, a time of soul-searching for university professors as well. Rather than needing so many specialists in so many disparate fields, what a lot of universities need right now — and will need more of in the future — are just plain old good teachers, people with expansive minds who can draw parallels between unrelated topics and help the world make sense to young people just beginning to discover themselves.
Professors will still enter the academy as experts in a certain discipline, but those who are thinking productively about the future will care less about their specialty than what they can demonstrate about learning. The university of the future will not just be the School of Education, Business, Nursing, Communications, Liberal Arts, etc., all divided by different styles, requirements, and internal politics. The university of the future will be a community of learners taking in stimuli from all the professional courses of study and ordering it in a way that makes sense. At the center of that will be professors learned in one discipline but open to others, combining topics with other like-minded instructors in ways we are only beginning to unravel. That professor will be a general practitioner of the most essential function of the university: teaching.