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California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
California Competes - CA Wellness Foundation Conference on Health Professions
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California Competes - CA Wellness Foundation Conference on Health Professions

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  • I’m at California Competes. Wedevelop non-partisan and financially pragmatic recommendations for better policies to drive California higher education. Much of our work has been in trying to make the demand side argument for why business and industry and civic leaders ought to care about higher education policy and performance. We’re guided in our work by a set of values that promote increasing access, improving accountability, increasing and preserving affordability and of course increasing California’s investment in our colleges.
  • At California Competes we believe that every good conversation begins with a discussion of data, of what we know. So I want to start with a brain teaser.These three… (growth relative to the whole economy)… The three graphs together are a pretty fair proxy for cost increases – they show that we're spending a larger part of our budgets on these things when the graph goes up. Take a moment…By show of hands, how many of you think the first graph is K12? Health care? Higher Ed? OK… so there seems to be some consensus around …What about the second? How many of you think that is K-12…And the final graph?
  • Graph 3 that looked relatively flat, that was K-12 Education. We haven't vastly increased the amount we spend on K12 education. Increase is only from 3 ¼ to 4 ½ % in 50 years.
  • Graph #2 was higher education – shows the increase in our investments but the Y axis is still pretty small… Increase is only form 1-3 1/4 % in 50 years, which extraodrinary when you think abut the amount that college tuitions have risen in tat time period.
  • Graph #1 is health. Over 50 years from 5% to 18%. Equally striking about these graphs are the story they begin to tell about the similarities between the health care sector and higher education. I was struck by the shapes of the HC and Higher Ed graphs, so in preparing for the talk I started to explore the similarities between these two sectors…
  • The challenges being faced by health care are not unfamiliar to those of us who study and work to improve the higher education sector, because, as it turns out, those industries share similar characteristics, as well as similar problems.The first issue is cost: many economists believe that HC and higher ed. are victims of Baumol’s cost disease.The phenomenon is frequently cited as a cause of increasing costs in both sectors because it speaks to a rise in salaries without a commensurate rise in productivity. [The salary increases come from sectors that rely heavily on human interactions where technology can not help to drive down labor costs and where, over time, real wage costs increase.] Essentially, Baumol’s disease describes a particular type of wage inflation, and that wage inflation is what we experience as overall cost increases in an industry. (Classic example is that of an orchestra: you’ll always needs the same number of violinist, cellists, and oboists for an orchestra, nor is there any technology that would substitute for an orchestra. So while their productivity (performing Beethoven’s 5th) remains the same, the labor costs increase over time.)Quality … Hard for consumers to tell if they’re getting quality and the value proposition is opaque to consumers, which leads to a lack of transparency. The lack of transparency is a results from an environment where…Lots of entities are paying for servicesConsumers are paying different prices for the same services, andProviders are receiving different prices for their services (depending on who pays or who is getting them).… all of which contribute to masking the true costs and the fair price(s) for these servicesFinally, as you can see, there are a host of other ways– from having powerful labor groups to a high degree of regulation to the sense amongst large segments of the public that the services offered are a basis human right and part of the social contract -- in which these sectors share similarities.
  • The similarities are even more profoundbecause these two industries are not just like eachother but have everything to do with the future of the state.In the 1960s,California emerged as an economic powerhouse, the envy not just of other states but of nations. We have been renowned for the richness and diversity of ourrobust regional economies. We’re at the top of our game in agriculture, natural resources, shipping and logistics, the entertainment industry not to mention the hightech and biotech industries. Our state’s GDPtotals $1.9 trillion, representing 13 percent of the nation’s GDP and placing California 8th (or 9th, depending on who you ask) in the world if it were ranked as a separate country.Much of the reason we came to occupy such an important place in our world’s economy because of our higher education system which created a concentration of highly educated people. The implementation of the Master Plan for Higher Education was to expand access and focus our colleges on their distinct roles that could contribute to our state’s unprecedented economic strength and our vibrant, growing communities.
  • The CA story of how to inspire robust economic growth has become a global story.We've seen how the world has changed over the past few decades where in the places where you have creativity, industriousness andentrepreneurship, that comes from (1) a concentration of those with higher education degrees, it creates good jobs (2). Those good jobs create strong communities (3). Those strong communities contribute to more education (4).The California story of economic development is a story of how you engender an upwards cycle of improvement: of communities, of education, of families, of opportunity that reaches people from all backgrounds. The problem is that California, despite being at the forefront of this global trend of modern economic development, has been slipping as an economic leader because our colleges, universities and trade schools are not producing enough highly skilled graduates. Among the states, California now ranks 23rd in terms of the proportion of adults ages 25 to 64 with an associate’s degree or above.
  • We’ve been asking ourselves at California Competes, what would it take fro California to move from being 23rd to being a leader again, being for example, a top 10 state? In order to do that we’d need to produce 5.5M…We need to up our degree production by 4.5% in whole terms, that means adding 2.3 million degrees to what we are currently on track to produce.
  • Where do the degrees currently come from? Nearly three-fourths of all bachelor’s degrees are awarded by public institutions in California, with more than a quarter of University of California graduates and more than half of California State University graduates having taken at least one class at a community college. But because the Master plan placed limits on who can attend UC and CSU (the top 12% and top third of college students) these institutions are for the most part saturated.*****Career and technical credentials (associate’s degrees and certificates from programs of at least a year in length) are currently conferred by community colleges (just over 1 third) and for-profit colleges (nearly two thirds). But with the community colleges serving so many needs – basic education, transfer, career and technical education and recreational courses, they too are maxed out (as you would be if you were the largest school system in the world serving 2.5M students.As we think about increasing degree production, we also need to think about in what sectors our colleges and universities should be increasing, which brings us back to our brain teaser graph we saw at the beginning…
  • With the implementation of the Affordable Care Act just around the corner, as you well know there is still an information gap in terms of what kinds of degrees are needed.CA HospAssn published this in 2009Demand #s don’t speak to the need for physicians and others who can serve in communities of color.
  • Mean Tuition Median TuitionCA Public $2,360.27 $1,008.00CA non-profit $23,799.54 $24,520.00CA for-profit $15,970.58 $15,064.50Public Sector All: 118,660Public SectorHealth: 6,006For-Profit All: 9,870For-Profit Health: 1,165Independent All: 28,394Independent Health: 1,953
  • Mean Tuition Median TuitionCA Public $2,360.27 $1,008.00CA non-profit $23,799.54 $24,520.00CA for-profit $15,970.58 $15,064.50
  • Mean Tuition Median TuitionCA Public $2,360.27 $1,008.00CA non-profit $23,799.54 $24,520.00CA for-profit $15,970.58 $15,064.50
  • Salary Surfer website is a potential antidote for some of the allied health occupations, if they can get the data right…
  • Among all students attending a 4 year institution, 2/3 are at publicly funded colleges. That rate is 75% for Asian and Latino students, 64% for white students, and 55 % for black students. African American students are the most likely group to attend 4 yr. for profits, and nearly 1/3 (29%).
  • In 2011, two year for profits produced 41K degrees, compared with 17K in community colleges. (2.5x more)African Americans are 3 x as likely to get a two year degree form a for profit than a community college.Latinos are 4x more likely to obtain a two year degree form a for profit than form a community college.Whites are 1.5x as likely to be in a for profit. Asians are slightly more likely to attend community college than a for profit. The pipeline is leaky all the way through. For those in allied health careers underrepresented groups are ending up proportionally more for profit institutions, paying higher tuition and with very little POLICY responses (next slide)
  • What should we do?Gov sets the higher ed agenda, and he’s concerned about escalating higher education costs, existingfunding models (that promote neither efficiency nor effectiveness), and poor student outcomes. This year Gov advanced reporting on performance measure… step in right direction, but we need to begin to think about linking this to what the segments care about… $$ What more should the Governor do? (slide bullets)
  • Transcript

    • 1. Higher education, the health care sector and our future economy CALIFORNIA’S CREDENTIAL CRUNCH
    • 2. These three graphs show the change in the percent of US GDP spent on 1) K12 Education 2) Health Care and 3) Postsecondary ed. Which is which? BRAIN TEASER
    • 3. K-12 HAS REMAINED A RELATIVELY CONSISTENT SHARE OF GDP SOURCE: U.S. Department of Education, National Center for Education Statistics, Digest of Education Statistics, 2010
    • 4. SHARE OF HIGHER EDUCATION HAS TRIPLED BUT REMAINS SMALL SOURCE: U.S. Department of Education, National Center for Education Statistics, Digest of Education Statistics, 2010
    • 5. HEALTH CARE HAS SKYROCKETED…WE SPEND 3X MORE AND IT’S NEARLY A FIFTH OF SPENDING SOURCE: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group; U.S. Department of Commerce, Bureau of Economic Analysis; and U.S. Bureau of the Census.
    • 6.  Baumol’s Cost Disease  Quality and Transparency  Common characteristics  Human Capital Intensive  Powerful labor groups  Highly regulated  Services provided perceived as a “right” and common good  Dependent on accreditation for federal subsidy  Disincentives to keep costs low, despite public outcry  Influx of for-profit direct-service providers HEALTH CARE AND HIGHER ED
    • 7. WHERE “GOETH” THE GOLDEN STATE?
    • 8. THE CALIFORNIA STORY OF ECONOMIC DEVELOPMENT
    • 9. California needs to produce 5.5M degrees and credentials by 2025, but is on track to produce only 3.2M GAP: 2.3 Million Degrees CALIFORNIA’S CHALLENGE
    • 10. PRODUCERS OF DEGREES IN CALIFORNIA Independent 18% For-Profit 7% UC 28% CSU 47% 166,000 Bachelor's Degrees awarded in 2010-11 US Department of Education, 2011 Community Colleges 39% For-Profit 59% CSU 46.8% 121,303 Vocational AAs and sub- baccalaureate certificates of one year or more, 2010-11 US Department of Education, 2011 Independent 2%
    • 11. DEMAND-SIDE: WHAT HEALTH CARE DEGREES & CREDENTIALS DOES CA NEED? 7.8% 6.8% 6.3% 6.2% 5.6% 5.3% 5.3% 5.0% 4.9% 4.5% 4.4% 4.3% 3.8% 3.1% 2.9% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Physical Therapist CVIR Technologist Medical Lab Technician MRI Technologist PET Technologist Clinical Lab Scientist Physical Therapy Asst Ultrasound Technologist CT Technologist Respiratory Therapist All Occupations (Avg) Nuclear Med Tech Radiological Technologist Pharmacist Pharmacy Technician Vacancy Rates by Occupation (2009) California Hospital Association – Allied Health Workforce Survey, Feb. 2011
    • 12. SUPPLY-SIDE: BACCALAUREATE DEGREES 4.8% Public Colleges - Health Public Colleges All Public Colleges Health 10.6% For-Profit Colleges - Health For-Profit Colleges All For-Profit Colleges Health 6.4% Independent Colleges - Health Independent Colleges All Independent Colleges Health
    • 13. SUPPLY-SIDE: 118,000 VOCATIONAL AA’S AND CERTIFICATES (1-YEAR PLUS) 40% 60% Public For-Profit Public Health For-Profit Health 40% 60%
    • 14. OF THE HEALTH CREDENTIALS (40% OF TOTAL), THREE-QUARTERS ARE FROM FOR- PROFIT SCHOOLS 26% 74% Public For-Profit Public Colleges, Health For-Profit Health
    • 15. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 White Hispanic Black Asian Degrees and Completions in Health Fields Assoc & Sub-Bacc 1+ Years Bachelor's Degrees Master's Degrees Professional Doctorates (e.g. MD) Research Doctorates SUPPLY-SIDE: WHO IS COMPLETING HEALTH- RELATED DEGREES?
    • 16. 0 500 1,000 1,500 2,000 2,500 3,000 White Hispanic Black Asian Where are students getting their bachelor's degrees? Public For-Profit DISTRIBUTION OF BACCALAUREATE DEGREES BY RACE
    • 17. 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 White Hispanic Black Asian Where do students get their Assoc. Degrees/Sub-Bacc of 1+ years? Public & Non-Profit For-Profit SUPPLY-SIDE: WHAT INSTITUTIONS ARE PRODUCING SUB-BACCALAUREATE HEALTH- RELATED DEGREES?
    • 18.  For profits are vastly more invested in producing the health care degrees  Certain populations are more likely to obtain degrees from for-profit institutions  Low BA attainment for African American and Latino students  Underrepresented groups are underrepresented throughout the health education pipeline: 40% of all masters degrees and nearly 40% of all professional doctorates are earned by white students. The pipeline is leaky all the way through. THE TAKEAWAYS
    • 19.  Increase access to community colleges, we need to ensure growth in health professions for certain populations, especially for African American and Latino students  Affordable tuition and better financial aid  Increased for-profit regulation WHAT ELSE DOES IT TAKE TO IMPROVE CALIFORNIA’S HIGHER EDUCATION SYSTEM?  Better data to link wages to occupations  Better guidance for higher education system on how to remain responsive to shifts in the economy
    • 20. www.californiacompetes.org @CalCompetes

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