"America is emerging from the Covid-19 pandemic with a changed economy. Many companies won't survive, and others will be permanently altered. America's universities are also wounded financially, and some may have to defer or eliminate classes in the fall -- a potential death knell for the weakest. University presidents must learn from their healthcare counterparts and adapt before it's too late.
Healthcare and higher education were battered in the pandemic. Hospitals were inundated at its height and forced to defer more-profitable elective surgeries and transfer noncritical patients. Meanwhile, more than 4,000 colleges and universities were nearly vacant and few offered classes on campus.
Leaders from both industries have long faced intense bipartisan pressure to contain costs and deliver better outcomes, demands exacerbated by the pandemic. The healthcare industry has been undergoing a transformation that will help it maneuver through the current challenges. Higher-education leaders will find it harder to adapt and have some tough decisions to make to sustain their institutions. Here are some lessons they can learn from healthcare counterparts to better serve students as consumers:
-- Consolidation. In 2019 there were 92 hospital mergers or other partnerships, which were premised on the idea that clinical scale leads to lower costs and improved patient care. Hospitals are capital-intensive -- and strategic partnerships help them achieve their long-term mission while cutting red tape and decreasing the need for outside investment.
The University of Wisconsin System and the University System of Georgia have consolidated some of their two- and four-year institutions in recent years. But consolidation is rare in higher ed. Given the rising cost of trying to be all things to all people, universities have to form centers of excellence via regional partnerships.
-- Price and quality transparency. With consumers paying more for education and healthcare out of pocket, students and patients are demanding more transparency. Hospitals are beginning to provide pricing for clinical procedures, enabling patients to comparison-shop.
Universities have made progress in providing cost transparency, but they lag far behind hospitals in providing quality transparency. Unlike hospitals, which provide measures related to clinical outcomes and patient satisfaction, universities don't like to talk about outcomes. Many schools opposed Obama-era mandates to publish data like gainful-employment rates. But as tuition continues to increase faster than inflation and power shifts to consumers, universities will have to develop their own quality measures.
-- New entrants in the market. Many private entities, including physician groups, retail companies and private-equity firms, have entered the healthcare business by helping develop cancer-treatment facilities, colonoscopy centers and the like. They often deliver care at a lower price than capital-intensive full-service hospitals. Hospitals have responded by developing their own networks of ambulatory-care centers and physician groups, offering lower prices than their inpatient facilities but benefiting from shared branding and referral opportunities.
Just as healthcare firms have focused on high-margin services, the Western Governors Association, Southern New Hampshire University and for-profit entities have made great strides in the nontraditional student market. New entrants are providing academic programs designed to offer midcareer job retraining without the cost structure that burdens universities.
-- Enhanced use of technology. Hospitals are treating more patients remotely and at local clinics, enabling patients to be treated closer to home in more cost-effective settings. This allows the patient, not the hospital, to become the focus of the medical event. The use of personalized medicine is also beginning to have dramatic impact on clinical outcomes, although it is still high on the cost curve.
Covid accelerated the use of telemedicine to treat patients at home, and universities were forced to adapt to the pandemic by investing in distance-learning technologies. But the quality of remote learning has remained spotty. While many students prefer the residential-college experience, more will want the convenience of quality, well-branded programs that cost less.
-- Alternative revenue sources. With lower reimbursements across most procedures and an aging Medicare population, hospitals have had to find new revenue sources. Hospitals are entering at-risk contracts and getting paid for population health management, shifting their focus from treating patients when they need care toward keeping them healthy to avoid care.
For many colleges, finding alternative revenue sources has simply meant enrolling foreign students who pay full tuition. Recent immigration restrictions have tempered some of this demand. Universities have to find alternative revenue sources to address a more challenging fiscal reality, including developing tailored courses for corporations and lifelong learning for alumni. Schools can learn from places like Arizona State University, which provides retirees with living arrangements on campus.
-- Capitalizing on the brand. Health systems with strong brands have expanded into new geographies. The Mayo Clinic now has a presence in seven states; the Cleveland Clinic has entered Canada and Abu Dhabi; and the New York-based Hospital for Special Surgery has moved into South Florida. Expanded experience with online offerings will help universities follow suit. Some have already established global partnerships, like Duke Kunshan in China and Yale National University of Singapore.
The pandemic exacerbated, but didn't create, the pressures facing higher education. Wishing for a return to the status quo ante is no strategy. If university presidents want their institutions to survive, they must seize this moment to learn from the rapid changes in healthcare." [1]
1. What Higher Ed Can Learn From Hospitals
Jindal, Bobby. Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 10 Sep 2021: A.17.