EMOs?

The head of a U. S. government task force on higher education suggests that if the Ivory Tower cannot get its act together, it may face a version of what the health care industry is confronting—HMOs.

“The American Association of Universities criticized our tone,” Charles Miller said on October 25th at the Capital Hilton. “They said that 17 of the top 20 universities in the world are in the United States.”

“They quoted a Shanghai University ranking,” he told the audience. “Isn’t it ironic that the only ranking they could use that showed them in a good light came from a communist totalitarian system?”

He served as chairman of the U. S. Secretary of Education’s Commission on the Future of Higher Education. A retired businessman, he has found his dealings with the higher education establishment frustrating.

Miller formerly served as the chair of the University of Texas Board of Regents. “I spent a number of years as a financial analyst and anytime I asked to see the books I found them opaque,” Miller remembered. “The administration didn’t understand them either and seemed to like it that way.”

“I couldn’t get any information on student learning except grades, degrees and ‘see time,’ all of which are no longer relevant.”

Now looking at the nation’s campuses for U. S. Education Secretary Margaret Spellings, Miller sees the same problems multiplied. “There are those who complain that the philosophy of the university leans 85% one way,” Miller told the crowd at the event sponsored by the Education Sector. “We didn’t even look into that.”

“It took as long for the AAU to get data as it took for the U. S. government to build the atomic bomb in the Second World War.” Miller offered this observation is response to a question raised by an AAU representative. The Education Sector itself is a group founded by a former advisor to President Clinton—Andrew Rotterham.

Ultimately, Miller warns, the failure of the higher education establishment to measure its own success, or lack thereof, may be the undoing of the Ivory Tower itself. “If the academy doesn’t come up with an assessment test, it’s going to be done for them,” he warned the crowd, which consisted of many higher education lobbyists.

“I think that is already happening in health care,” he said when I asked him who would police the academy in his receivership scenario. “Ask anyone and they will tell you that medicine has changed in the last 20 years.”

“HMOs started due to the rage over the failure to cut costs.” Does that mean that, in similar fashion, professors and their protectors can look forward to EMOs, or Education Maintenance Organizations, governing them? “I see versions of that at the state level.”

“If that happens, then schools will lose their autonomy.” Miller drew the analogy to health care because he sees the same endemic problems with both hospitals and colleges: “Third party payments are a fault of the system.”

“Third party payments” occur when someone other than the consumer pays for the good or service at the point of consumption. In higher education, the consumer would be the student or the student’s parents.

As it happens, despite the attention given the explosion in college costs, the proportion paid by students does not make up the lion’s share of the price tag. “Sixty-five percent of average family income is eaten up by the sticker price of college but only 25% of average family income is eaten up by the net price of college,” the president of Vassar said last month.

Dr. Wilfredo Nieves, the president of Middlesex Community College in Connecticut, points out that for Latinos that latter percentage is closer to 30. Nonetheless, “The former [share of family income] looks hopeless, the latter considerably less so,” Vassar president Catherine Hill concludes. “Moreover, since the start of the decade, that share has fallen.”

And, “Some schools are charging low-income students only $1,000 on a $33,000 tab,” Dr. Hill said at the National Press Club. Indeed, even allowing that this may be the exception rather than the rule, the difference between the sticker and net price of college, as laid out by the College Board, is stark.

For example, the sticker price of a four-year private college is $22,218 while the net is closer to $13,000. Similarly, at four-year public colleges, the sticker price—
$5,836—is more than double the net—$2,700.

Malcolm A. Kline is the executive director of Accuracy in Academia.