I’ve talked to you before about what motivates me to speak up and speak out about the challenges America faces. At their core, all the issues we face, be it the fight against the Irreconcilable Wing of Islam, the need to transform our system of health care, or the need to develop energy independence — all these issues boil down to Americans trying to pursue happiness in peace.
Last night the Fox News Channel ran the special that I hosted on the unacceptably high cost of a college education. We followed three families through their decision about where to send their kids to college or if to send them at all. One of the families was the Pattersons of Newburgh, N.Y.
The Fox cameras followed the Patterson family for five months while their daughter Jenna made her decision about where to go to college. Jenna is a good student who was accepted by six different colleges. The problem for the Pattersons, like for so many American families, is being able to afford to send her to college.
A 500% Increase in the Cost of Going to College
If you find yourself also worrying about the cost of educating your children and grandchildren, you’re not alone. As I reported in the Fox special, the price of a public four-year college education increased by more then 500% from 1981 to 2003. Five hundred percent! All other consumer prices rose by 140% in that same time period.
When I was a college professor 25 years ago, the average cost of attending a private college was about $3,600 a year and the cost of a public university was about $1,600 a year. Today, a year at a public university will cost an American family more than $12,000. And a private school? That will cost on average $29,000 a year, and for some schools, much, much more.
So what does that mean for a family like the Pattersons? It means that Jenna’s dad, Joey Patterson, took a second job on weekends and still couldn’t save enough to send her to college. And the same is true for most Americans. A family that earns the median income of $44,000 a year has to plan on spending a third of its annual income just to put one kid through school — and that’s before taxes.
Every Taxpayer is Footing the Bill
The price of a college education has gone up faster than inflation-faster even than the cost of health care. But as I reported on the Fox special, if you think this affects only families with children going to college, think again. Taxpayers pour tens of billions of dollars into higher education every year. But are we getting our money’s worth?
There’s no question that a college education is the dream of most American parents for their children. A Fox News poll recently asked Americans if we think a college education is more or less important to succeeding in life today compared to 25 years ago. Eighty-five percent of us said that it was more important.
But as we discussed in the Fox News special, more and more Americans are questioning the unacceptably high cost of higher education — regardless of whether they have children attending college. The fact is, we now have a system in which colleges and universities aren’t accountable for the high prices they charge, and so they have little incentive to keep costs down.
Holding Colleges and Universities Accountable
Just last month a draft report from the Secretary of Education’s Commission on the Future of Higher Education called the huge rise in college costs “unacceptably large” and blamed it for “the erosion of public credibility in higher education.” So what can we do? All of the solutions for the high cost of a college education boil down to a single change: Holding colleges and universities accountable for their costs.
For starters, the commission reported that every school should measure how well it’s teaching its students, either through testing or other means. It also thinks institutions must be more open about how they spend their money. Finally, the commission proposes that federal and state governments should give colleges incentives for finding innovative ways to maintain or even lower costs.
These are sound ideas that would enable students and their families to judge for themselves if the school is a good deal while giving schools a good reason to be more competitively priced.
But as I reported in the Fox News Special last night, I think we should do even more:
One, I think we need less research and more teaching. Too many professors spend too much time outside the classroom doing research and while there is no doubt some are making breakthroughs that profoundly benefit society, much university research is of questionable value.
Two, we should re-examine tenure, which gives some faculty members job security other professions couldn’t dream of. That means many schools simply can’t fire incompetent or unproductive professors.
Three, we need to push students to finish faster. Too many students take too long to earn their degree. Sometimes it’s the school’s fault, sometimes it’s the student’s, but either way, it pushes the cost of college way up — for students and taxpayers alike.
Four, we need to promote alternatives to four year colleges. Community colleges and online universities cost less because they concentrate almost exclusively on teaching, and don’t spend much on research or lavish campuses. Community colleges should be given greater acceptance and greater status. A growing number of for-profit colleges could also provide a better option for some students.
A final point I want to underscore: Simply pouring taxpayer money into the system hasn’t made college more affordable for Americans. In fact, the opposite has been true. What we need are more incentives for colleges to keep costs down, and more competition in higher education to give parents, students — and taxpayers — more choice and a bigger say.
In other words, it’s time to put consumer power in the ivory tower.
In the end, Jenna Patterson made her decision to attend a four-year college — and her family was forced to go deeper into debt to pay for it. Like most American families when confronted with this choice, the Pattersons chose to invest in their child’s education, no matter what it will cost them.
But investing in our children’s future shouldn’t mean saddling them — or ourselves — with mountains of debt. Take it from a former college professor, we can demand more from our colleges and universities — and more from the government programs that support them — when it comes to educating our kids at an affordable price.
P.S. — Speaking of outrageously high prices, I have an op-ed next week in Investors Business Daily about the high cost of health care. And just like we need to hold colleges and universities more accountable for how they educate our kids, we need to hold doctors and hospitals more accountable for how well they treat patients. Unfortunately, the largest single source of information on doctors and hospitals-the federal government-won’t release data on how well the doctors and hospitals are doing their job. Here’s a part of what I wrote:
“Medicare has detailed information on nearly every doctor and hospital in the country. This data can inform the public regarding who are the better performers and who are not without compromising patient privacy. Unfortunately, the U.S. Health and Human Services Department will not release the data, despite the fact that it is paid for by the taxpayers. Americans have a right to know how their doctors and hospitals perform, and the public must continue to demand it.”
Two great questions and my answer about this in the “Ask Newt” section below.
Each week, this newsletter features questions from its readers. Have a question? Send an email to Newt at email@example.com.
Who is going to decide that the provider of health care achieved good results or provided the correct service?
—Ryland Roesch, M.D.
…Are you willing to open another bureaucracy whose size you cannot imagine [to measure results]?
—J. K. Oates M.D.
Ocean Springs, Miss.
Thank you both for these excellent questions that concern the transformation of our healthcare delivery system.
First a little background. In 2003, I founded the Center for Health Transformation, which is a collaboration of transformational leaders dedicated to the creation of a 21st Century Intelligent Health System in which knowledge saves lives and saves money for all Americans. A 21st Century Intelligent Health System is consumer-centered, market-mediated, innovation rich and outcomes-based and will replace our current failing model. Both of your questions relate to how an intelligent health system would actually measure the quality of the health services delivered by health providers. To put it simply, in a 21st Century Intelligent Health System, if doctors and hospitals meet performance standards and provide better care, then they will be paid more; if they do not measure up, they will be paid less. Think about it, today, poor performance actually rewards doctors because it usually requires more care costing more money. What I want to do is to turn that model on its head. It is far cheaper to offer the incentive of higher pay for better provider care — which leads providers to implement best practices — than it is to keep paying providers a flat rate for delivering care that is below widely accepted performance standards.
The Integrated Healthcare Association is a collaboration of industry groups that has worked for the past five years on implementing this kind of model. In this project doctors receive higher payments for investing in health information technology because better technology is essential to better care. The result is a dramatic increase in the use of health IT. Because of this and other incentives, patients are getting more health screenings and receive care based on evidence-based guidelines. While it is still early, the results so far have been very impressive. A good overview is here.
Now let me deal with the question of creating another bureaucracy first. Moving to such a system that rewards providers for delivering quality care will no doubt be challenging. It is understandable why providers would be skeptical about another health initiative by the government. It is, after all, the government which has substantially contributed to today’s failing health system. However, if it is designed correctly, a pay for performance system would not require more government bureaucracy because all of the reporting would be done electronically. That data could then be used to assess provider performance.
Now let me address the “whose standards” question. Collaborative efforts are already under way to standardize the way results are measured and incorporate them into the business practices of the public and private sector. The Bush Administration deserves credit for doing its part to move these groups in the right direction. For instance, on August 22, President Bush issued an executive order “promoting quality and efficient healthcare in federal government administered or sponsored health care programs.” It called on groups like the Ambulatory Care Quality Alliance and the Hospital Quality Alliance-collaborative initiatives among health plans, doctors, and hospitals — to continue their efforts to find the best ways to measure quality. Some examples of what to measure are apparent such as rates of hospital caused infection and need for follow up, etc. But remember, no provider would be measured on any one case, as each case is unique, but rather on their entire case load measured over time.
We already have evidence that performance based incentives work. In Georgia, the Center for Health Transformation is leading the nation’s largest Bridges to Excellence diabetes program. The program, like other pay-for-performance initiatives, pays incentives to physicians who practice best standards of diabetes care. The program encourages individuals with diabetes to see these physicians to improve their quality of life and avoid the long-term complications of the disease. In the process, physicians are rewarded for providing high-quality care, individuals with diabetes are healthier, and employers save money. A recent actuarial analysis of the program by Towers Perrin reports an estimated savings of $1,059 per individual if blood pressure, Hemoglobin A1C, and LDL control measures are met.
Since Medicare is the largest health insurer in the country, it has more data on more hospitals and more doctors than any other source in the country. Currently, Medicare does not release this information. I think this must change. I believe the American people have a right to access this data, especially since they pay for it. The performance data Medicare could provide would bring us much closer to a system where patients could make informed decisions about which providers to use. It could be done so that no personal information about Medicare patients is compromised.
Critics opposed to releasing this information are quick to note that without an agreed-upon standard set of metrics for measuring quality of care, the Medicare claims data will be interpreted differently. I agree that this is true, but by releasing the information to the public, there will be an acceleration of the adoption of baseline standards because the benefits of analyzing outcomes will be even more apparent as many different sources will work to provide meaningful evaluations from the Medicare data. Baseline standards would, of course, change over time as we find even better ways, based upon the data, to improve quality performance. Without this data the system will remain lethargic. To learn more about the benefits of a performance-based system read David Merritt’s piece called “What we pay for” on the Center for Health Transformation’s website