Home Online Education Access and Affordability Is Higher Education Today Going the Way of Hospitals in the 1980s?

Is Higher Education Today Going the Way of Hospitals in the 1980s?

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As the data flow continues from the published articles about the economic crisis and its impact on colleges and universities, it strikes me that the writers may be confusing facts of the economic crisis with changes inside the industry itself.  It is true that public universities are under pressure from state budgets that are buckling under the weight of reduced tax revenues.  It is true that private institutions are concerned that their tuitions are too high for families concerned about the job of one or both parents.  It is also true that online institutions are growing their enrollments at rates that none of the traditional college sectors have seen since the late 1940’s and early 1950’s.  Is there a linkage?

In the 1980’s and 1990’s, I was an officer of several healthcare companies.  During that era, the high costs of hospital stays created opportunities for administrators and physicians to seek other options.  One of the outcomes of that era was the Outpatient Surgery Center.  Initially, some outpatient surgery centers were established off of the hospital campus in order to keep the cost reimbursement for Medicare and Medicaid from being distorted.  Eventually, every hospital established an outpatient surgery center as the trend widened and reimbursement rules adjusted to accommodate the new trend.  Physicians developed less invasive types of surgery such as laparoscopy which shortened the recovery time, the exposure to infections, and the requirement for lengthy hospital stays.

It is my view that online degree programs are similar to the outpatient surgery centers of the 1980’s.  An online program does not need any of the traditional bricks and mortar requirements of physical classrooms, dormitories, dining halls, etc.  Thus, the costs to operate the program are less.  The programs offer convenient access to students who may not be able to attend campus-based programs.  In many cases, the programs are offered 12 months a year which allows the student to choose when to attend versus conforming to the more standard three semester or four quarters schedule demanded by a residential campus restricted by its physical limitations.

In a September 8, 2005 article in the Economist, Peter Drucker was quoted as saying “Thirty years from now, the big university campuses will be relics.”  Drucker went on to say that he considered “the American research university of the past 40 years to be a failure and that help was on the way in the form of internet classes and for-profit universities.”  I agree that internet programs can help the access and affordability issues of many students seeking an education.  I think Drucker’s reference to the for-profit status was only symbolic of the for-profit institution’s quest to meet its customers’ needs more so than a state-supported or endowed non-profit institution.

The cost pressures by insurers and the federal and state government forced hospitals and healthcare providers to change the way they conducted their business.  Many community hospitals closed or were consolidated once it became evident that they had to operate effectively and efficiently.  Eventually, outpatient surgery centers became a standard feature at most hospitals (rehab hospitals excluded) and the length of stay and costs of many procedures decreased.  I think the similarity is building in higher education and students should benefit.  The question is how soon will the changes occur and which institutions will thrive and which will not?

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Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In July 2016, he retired as APUS president and continued as CEO of APEI. In September 2017, he was reappointed APUS president after the resignation of Dr. Karan Powell. In September 2019, Angela Selden was named CEO of APEI, succeeding Dr. Boston who will remain APUS president until his planned retirement in June 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. During his tenure, APUS grew to over 100,000 students, 200 degree and certificate programs, and approximately 90,000 alumni. In addition to his service as a board member of APUS and APEI, Dr. Boston is a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), a member of the Board of Overseers of the University of Pennsylvania’s Graduate School of Education, a board member of the Presidents’ Forum, and a board member of Hondros College of Nursing and Fidelis, Inc. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. Dr. Boston lives in Owings Mills, MD with his wife Sharon and their two daughters.

Comment(1)

  1. An entirely apt comparison, I think. Allow me to add another similarity:
    Hospitals were once ruled by doctors. Pressures to maximize productivity, seek additional sources of funding, and manage increasingly complex legal and financial issues, led to the introduction of management teams (MBA’s, Egad!). Similarly, in universities, academics are slowly ceding control to administration.
    In both cases, the old guard are often resistant to what they interpret as ‘corporatization’.

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