Healthcare and Higher Education .... continued

This topic is rapidly gaining attention at different places. I hope my academic colleagues are following the discussions and commentaries.
The latest one is from David Leonhardt of the NY Times--he includes public universities in "a list of organizations whose failures had done the most damage to the American economy in recent years."

That ought to hurt somewhere! I teach at a public university--a regional one, like the regionals that Leonhardt refers to. What are our graduation rates?
The following is the "Percentage of first-time, full-time freshmen entering and graduating from the same institution within six years."

• 2000-2001: 39.5%
• 2001-2002: 41.1%
• 2002-2003: 41.6%
• 2003-2004: 42.9%
• 2004-2005: 44.4%
• 2005-2006: 43.5%
• 2006-2007: 45.5%
• 2007-2008: 39.5%

These numbers are not unlike the ones Leonhardt cites: "Eastern Michigan (39 percent) or Western Michigan (54 percent)."

Leonhardt goes on to write:

Students see no need to graduate in four years. Doing so, as one told the book’s authors, is “like leaving the party at 10:30 p.m.” Graduation delayed often becomes graduation denied. Administrators then make excuses for their graduation rates. And policy makers hand out money based on how many students a college enrolls rather than on what it does with those students.

There is a real parallel here to health care. We pay doctors and hospitals for more care instead of better care, and what do we get? More care, even if in many cases it doesn’t make us healthier.

In education, the incentives can be truly perverse. Because large lecture classes are cheaper for a college than seminars, freshmen are cheaper than upperclassmen. So a college that allows many of its underclassmen to drop out may be helping its bottom line.

The blogger at the Economist disagrees, and contends that low completion rates and delayed graduation result from inadequate preparation at K-12:

America has a serious and growing problem in its primary and secondary education systems, and lacklustre college graduation rates are a symptom of that problem. Fix the former and the latter will largely take care of itself.

Everybody ought to be blamed here. Including me.

BTW, how does my university explain the phenomenal drop in graduation rates from what seemed to be an upward movement in the chart and back to 2000-2001 conditions?

The decline in 2007-08 graduation rates are a result of the challenging campus climate of several years ago. WOU engaged in a difficult 2005-07 collective bargaining process and experienced serious financial difficulty resulting in changes in senior administration. The uncertainty caused by these events resulted in many students choosing to leave WOU. This exodus was first evident in the 2003-04 drop in freshman retention rates and continued for several years. Fall 2006 and fall 2007 retention rates have substantially improved and will likely lead to increased graduation rates following several depressed years. The effect of campus climate and uncertainty on student persistence is evident and worthy of special consideration as the system discusses efficiencies during the current financial crisis.

Hmmm .... nice try :-) I wonder if the union folks, who are currently in the next round of contract negotiations, actually read this report! If perchance they did, well, it is not like improving student graduation rates is the highest priority for them either. Neither tweedledum nor tweedledee will make this an issue :-(

Healthcare reform: tweedledum and tweedledee

David Leonhardt has always been fantastic with his economic reports in the NY Times. This latest one is no exception, and he clearly and quickly gets to the issue:

You might think, then, that a central goal of health reform would be to offer people more choice. But it isn’t.

Real choice is not part of the bills moving through the Democratic-led Congress; even if the much-debated government-run insurance plan was created, it would not be available to most people who already have coverage. Republicans, meanwhile, have shown no interest in making insurance choice part of a compromise they could accept. Both parties are protecting the insurers.

Leonhardt's comment that "both parties are protecting the insurers" worries me. A great deal. This "bispartisan" behavior is what Nader has often criticized as tweedledum and tweedledee :-(
He then writes that:

The best-known proposal for giving people more choice is the Wyden-Bennett bill, named for Ron Wyden, an Oregon Democrat, and Robert Bennett, a Utah Republican, who introduced it in the Senate in 2007.

Yea to Oregon and Wyden!

Meanwhile, news reports are flashing that Senator Ted Kennedy died.

Economy DID NOT shrink by 6.1%

I was getting rather ticked off with media reports that the US economy shrank by 6.1 percent.
The 6.1 number is correct--but that is an annualized rate. It is a good thing I came across David Leonhardt's blog post, which means I don't have to re-create a post, but can copy/paste from his:

the official numbers describe the annualized rate of decline. The economy didn’t actually shrink 6.1 percent in the fourth quarter, despite what the government reported. It shrank at a rate that, were it to continue for a full year, would cause the economy to be 6.1 percent smaller at the end of that year.

Leonhardt does point out why this economic contraction is worrisome:

Here are the worst six-month declines in economic activity since 1947:

3rd quarter, 1957 - 1st quarter, 1958: -3.7 percent
3rd quarter, 2008 - 1st quarter, 2009: -3.2 percent
3rd quarter, 1981 - 1st quarter, 1982: -2.9 percent
1st quarter, 1980 - 3rd quarter, 1980: -2.2 percent
2nd quarter, 1953 - 4th quarter, 1953: -2.2 percent

The irony? Despite this news, and all the hoopla over the swine flu pandemic, the stock market was up.

According to Bloomberg:

“Most people are saying we could bottom out in the second half of the year, maybe in the third quarter, and then see positive growth again,” Christina Romer, the White House’s chief economist, said in a Bloomberg Television interview. “We’re certainly looking for some positive news towards the end of the year.”

The Economist notes on the other news item about a rise in consumer confidence:

confidence is a fragile thing and can be undermined by random events (such as swine flu). It is also worth remembering that consumers have had two tremendous boosts to their pocket books in the form of lower oil prices and lower mortgage rates. Even those aids to sentiment have only lifted the confidence index by 14 points compared with the 86 point decline it previously suffered (according to Capital Economics).

I would like to see consumer confidence survive the test of some really bad news (like a major corporate bankruptcy) before I was confident that the bottom had been reached. After all, from here, rates can't be cut any further, wages won't go up much, unemployment has further to rise and taxes will eventually have to go up. Not the sort of environment to make most people rush out and buy a flat sceen TV.

14.8 percent unemployment and underemployment

The government’s broadest measure of unemployment and underemployment was 14.8 percent in February. That includes some of the people who have stopped looking for work because they don’t believe they can find jobs. It also includes part-time workers who want to be working full time.

The Labor Department did not keep such a statistic in the early 1980s. But it likely would have been in the neighborhood of 17 percent then. (Awhile back, I created a similar — though slightly narrower, for reasons of historical consistency — measure, with help from Labor Department economists. It peaked in 1982 at 16.3 percent in December 1982; it was 14.1 percent last month.)

So it’s still too early to call this the worst recession since the Great Depression. But it’s bad, and it’s still getting worse at a rapid rate.

More on the jobs report, from Economix, is here and here.

Source: David Leonhardt

The downturn that started in March 2001

Too bad that David Leonhardt is taking a break until September--we will miss his wonderful observations like this one:

The common thread in these myths is that they serve to minimize the scope of the economy’s weakness. They make it sound as if the problems are acute — job cuts, oil speculation, a little real estate overexuberance — rather than fundamental.
...

For the first time on record, an economic expansion seems to have just ended without most families having received a raise. For the first time on record, the typical home price nationwide is falling. The inflation-adjusted value of the Standard & Poor’s 500-stock index has dropped 20 percent in the last year — and 30 percent since its peak in 2000.
I think the public has called this issue exactly right: the American economy has some real problems. Even if this summer’s downturn turns out to be mild, those problems aren’t mild — or simple — and they aren’t going away anytime soon. It’s going to take some real work.