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Healthcare and Higher Education Revisited (Part 1)

Healthcare and Higher Education Revisited (Part 1)
Many of the trends and pressures that influenced change in the healthcare industry 30 years ago are beginning to impact higher education today.
I was very interested in a recent The EvoLLLution article by David Collis of Harvard University, “ What Can Higher Education Learn from Healthcare?

He raises the possibility that lessons from the healthcare industry could be applied to higher education. In this thought-provoking piece, Collis focuses on consolidation and specialization, two very visible outcomes of the changes in healthcare. He concludes that the potential for higher education to move down a similar path is quite viable and perhaps even desirable.

In the spirit of keeping this conversation alive, I also believe there are several similarities between the two industries and, thus, many potential lessons to be learned for higher ed. But there is a trick to understanding the relationship between the two industries (isn’t there always a trick?).

The trick is that healthcare is further down the path than higher education, and we need to temper our conclusions and speculations with that reality. Allow me to explain.

Collis points to 1980 as a critical time for the healthcare industry, so let’s call that ‘Ground Zero’ for healthcare. In 1980, healthcare across America was local; provided by local doctors who had only recently given up house calls for the comfort of their offices and, in prosperous communities, maybe a hospital that was usually owned by the community or possibly by a religious organization. The Joint Commission on Accreditation of Hospitals (JCAH) was focused on hospitals and the use of emerging technologies was relatively new in the industry.

Higher education was also largely local in 1980, with institutions stratified — as Collis points out — into tiers and serving their defined territories. Private colleges and universities were scattered about the country and community colleges were settling into a niche focused on local opportunities. Our beloved data projectors were still in the bowling alleys, and would remain there for another decade or more, saving students from the dreaded “Death by PowerPoint” that their successors would suffer.

It’s not a stretch to see the similarities between the two industries back in 1980, and it’s equally easy to see the impact of consolidation and specialization on the healthcare industry over the next 30 or so years. This makes Collis’ observation, that “these two forces should also be at work in higher education, but have not yet played out to the same extent,” all the more interesting.

By 1984, healthcare was firmly on the path toward its re-invention, driven primarily by none other than the insurance industry. That’s right; the people paying the bills stepped in and began to dictate the future of the healthcare industry. I happened to be working in substance abuse treatment at the time and had an up-close-and-personal view of how this transformation unfolded (but that’s another story).

Between 1980 and 2003, the higher education funding model changed relatively little, with the possible exception of a growing interest in research dollars by schools that had formerly been quite content to focus on teaching. But something momentous happened in 2003 that we’ll call ‘Ground Zero’ for higher education.

In 2003, Congress was scheduled to reauthorize the Higher Education Act of 1965. The lobbyists lined up at the door and, as usual, extensions were passed because Congress was running a little behind schedule. Interestingly, it was not until early in 2008 that they completed their task, and — at the risk of oversimplifying a complex legislative process — their tardiness was largely due to the fact that many members of Congress had come to understand that the federal government was footing the bill for higher education. Sound familiar?

Just like in the healthcare industry more than 20 years earlier, the people paying the bills suddenly got very interested in how the money was being spent.

This explains why comparisons between the two industries are difficult to make: ‘Ground Zero’ for healthcare was around 1980, while higher education did not launch on its path of reform until 2003 or even later. Healthcare has a 25-year head start on higher ed.

But we just need to be patient. The rise of the University of Phoenix is cited by Collis as an early harbinger of change in higher education. Of course, schools like Central Michigan University were already operating across state lines in the 1980s and ’90s (someone had to show Phoenix how it’s done), and we did finally move that data projector out of the bowling alley and into the classroom by the mid-90s, so there has been evolutionary change in the industry all along.

And those changes continue today. The number of schools offering online courses and programs grows every year, and the role of technology in education is only going to grow in a similar fashion. As far as mergers and acquisitions go, well, consider Rutgers University and the University of Medicine and Dentistry of New Jersey. Or, the University of Toledo and the Medical University of Ohio as just two recent examples of a growing trend. Indeed, there is enough activity in this area that venture capitalists are building significant war chests, and there is even a blog devoted to the topic of higher education mergers.

This is the first of a two-part series by Terry Rawls building on a previously-published article by David Collis, exploring the lessons higher education can learn from the healthcare industry. To read the second part of the series, please click here.

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