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And You Thought Health Care Was Bad

By Kim Bellard, January 7, 2013

I’ve been thinking a lot of our educational system lately.  It may be the only part of our economy that makes me feel any better about our health care system.

Now, let me preface my remarks by admitting that whatever experience and expertise I may have with health care, I can’t claim the same for education (except as a student long ago).  Still, education and health care are two areas that most Americans feel very strongly about, recognizing that they are crucial for the well-being of the populace and of the country.  We should all care about what’s happening in both.  Unfortunately, we seem to have blinders on about how well either is performing.

The heath care statistics are perhaps better known.  I’ve covered some of these in previous entries, and won’t repeat all of them here.  In short, we spend way too much – far more than any other country – yet do not score at all well on most international comparisons of mortality or morbidity.  Whatever that extra spending is buying us, it does not appear to be better health.

The picture for education is surprisingly (and depressingly) similar.  We spend far more per pupil than other countries (although, unlike with health care, we’re not the highest as a percent of GDP), as reported by OECD.  Yet we aren’t getting good value for that spending, as our performance is at best middling compared to other countries (see, for example, the USC Rossier School of Education and The George Washington University).  And, according to a report from the Harvard Kennedy School recently, we’re not only scoring poorly but also we’re not gaining any ground on better performing educational systems in other countries.  In a global economy, that’s a race to the bottom, especially since some of our worst scores are in critical areas like math and science.

Most Americans might acknowledge that there are large parts of the public – especially the poor -- for whom both the health care and the education systems are failing, but the statistics for both systems indicate we’re all paying a premium for, at best, average performance.  That’s a sucker bet.

This caused me to start thinking about the ways in which the two sectors are similar.  Here are a few that strike me:

  • Who Pays: Both sectors rely heavily on public spending.  Health care is roughly half public spending (even ignoring the “tax expenditure” for employer-based health insurance), while in education the public spending is much higher – over 70% for all levels and closer to 90% for pre-collegiate.  People may not be as vigilant about what they are getting when they think the government is providing the service as with services they buy directly.  However, most other countries have even higher proportions of public spending in both sectors.
  • Local:  Most health care and most education is received “close to home.”  It’s certainly possible to get either health care or an education far away from home (as often happens with college), but that tends to be the exception; people tend to stick with what they know rather than seeking the best available.
  • Variability: The Dartmouth Atlas has been preaching for decades about the variation in health care throughout the U.S., for reasons not explained by population differences but simply due to local practice patterns.  The variability of performance in the education system between states and between schools within the same state show a similar wide range of variability (indeed, the Harvard report indicated more variability between states within the U.S. as between the U.S. and other countries).  It’s possible to find the best care or the best education in the world within the U.S., but there is a certain geographic randomness to that which is very troubling.
  • IT Transformation: Ironically, both health care and education were early adopters for IT – but for primarily for billing and administration, not for care delivery or teaching, respectively.  This is starting to change.  Health care has relied heavily on technology, such as MRIs or laser surgery, and the federal government is spending billions to encourage adoption of EHRs.  In the educational system, many classrooms are making good use of computers, even sometimes replacing textbooks with laptops or tablets.  Still, one would have to say that IT has not yet had the kind of dramatic impact on what the average doctor or teacher do every day as what workers in many other industries have seen, because they have not been forced to fundamentally reengineer their processes.
  • Guild Mentality: For many, many decades both teachers and many types of health care practitioners – doctors, pharmacists, dentists, nurses – have generally been viewed with great respect by the public.  Unfortunately, those professions have had a tendency to incorporate the attitude that people outside their profession are not qualified to evaluate their performance.  This no doubt contributed both to the local variability and lack of IT transformation mentioned above.  Teachers have the added protection of unions that serve to further insulate them from outside pressure on performance, while doctors, pharmacists, and dentists have the strong barrier to entry of their advanced education and licensure requirements. 
  • Lack of measurement: Historically, neither field paid much attention to measurement and certainly not to quantitative feedback loops for improvement.  Good teaching, like good health care, was seen as hard to define, especially since the full consequences of deficits in either may not fully emerge for years.  As a result, it’s been hard at best, and impossible in many cases, for consumers to view performance results to find the best teachers/schools or doctors/hospitals.  This is starting to change, such as through Meaningful Use requirements in health care and testing standards of No Child Left Behind/Race to the Top in education, but we have a long way to go before the average person can get actionable information on where and from whom to get the best education or health care. 
  • Not Rewarding Excellence: For the past thirty or so years, both public and private payors have moved away from paying based on charges and more on using predetermined fee schedules. This had the (hopefully) unintended effect of rewarding health care providers for average, not actual, performance.   Similarly, in education, teachers’ compensation was largely driven by tenure; the longer one had taught, the more they were paid.  In neither sector was excellence rewarded or poor performance punished.  Health care is now creeping towards “value-based purchasing” and education towards various forms of pay for performance, but the new systems are not widespread nor do they generally comprise a significant portion of compensation.

One might expect that the professions involved would be leading the charge to measure and improve performance, and to reward excellence, but by and large that has not generally been the case.  In his recent book Class Warfare: Inside the Fight to Fix America’s Schools, Steven Brill noted a mentality where teachers’ unions treated criticism of any teacher as criticism of every teacher, and it struck me that the same is all-too-true for health care professionals as well.  We have to get away from that.  The fact is that there are better teachers and worse teachers, better schools and worse schools; better doctors and worse doctors, better hospitals and worse hospitals.  It is crazy that we as purchasers of these services are not demanding not only to know which are which, but also demanding the ability to take our children/ourselves – and our money -- to the best practitioners. 

Measuring quality in either health care or education is, indeed, hard to do, but better performance from both systems is absolutely critical.  We’ve not going to emerge from the 21st century with the kind of country we expect unless we demand better performance.  Anyone want to bet which system reforms the fastest?

Reader Comments (5)

Latest study showing how poorly the U.S. fares on health measures:

January 10, 2013 | Unregistered CommenterKim

More data on our mediocre efforts: Education Week gives the U.S. K-12 system a C+:

January 11, 2013 | Unregistered CommenterKim

A very interesting discussion but it is begging the question of why are health care and education systems better in other highly developed countries than in the U.S.? If we are to make this a valid discussion the first question must be why are these systems better in other countries and what are the real distinctions. Do others have better preventative health care and different end of life philosophies. Are other educational performances quantitative or qualitative. We still have a great number of people (who can afford it) coming to the U.S. for both higher education and cutting edge health care.
I am not taking any side, this discussion should compare specifics and demonstrate where and how we can choose to improve and at what cost.

January 13, 2013 | Unregistered CommenterStuart Weedn

Stuart - that is the trillion dollar question. There is undoubtedly no one answer, but as starters I'd have to point to that, on the health care side, we pay doctors & hospitals MUCH more than any other country (as evidenced by numerous studies and referenced in previous blogs), and in education to the barriers posed by teachers' contracts to monitoring & basing pay on performance.

January 14, 2013 | Unregistered CommenterKim

It is really a matter of concern that both our education system and health care system are lagging behind than other countries. These two are the most important system for any country's growth and determines its growth factor. We can not neglect any of the system as both are important. There is no particular answer to the question that which system will reform best but we need reform in both the sectors.

April 4, 2013 | Unregistered CommenterStefan Williams

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