The healthcare-education connection

During his State of the Union address, President Obama spent more time talking about education than about healthcare, which he mentioned only passing. The two are connected, though, as a response from Dean Dad at Confessions of a Community College Dean reminds us:

In reference to yesterday’s post about cost (among other things), a commenter asked how I could assert ever-rising costs for colleges in the face of flat salaries for faculty.

That’s an easy one. Costs include much more than salaries.

The elephant in the room for any discussion of labor costs is health insurance. When the cost of employer-provided insurance goes up, then labor costs go up, even if salaries remain flat. The employee might not feel it, but the employer absolutely does. From the employer’s perspective, an increase in the cost of benefits is no different than a raise.

This is why I pull out what little hair I still have whenever I read the New Faculty Majority’s advocacy of the “Vancouver model” for paying adjuncts. Vancouver is in Canada. In Canada, health insurance is not attached to employment. If you don’t account for that, then you miss the point. Establish single-payer health insurance in America, and we can get a handle on the adjunct compensation issues. Until then, we use adjunct compensation to get a handle on health insurance.

Dean Dad’s earlier post reported, “President Obama has put higher education “on notice” that if we keep raising tuition, we’ll get our public funding cut.” (The post is also well worth a read if you’re at all interested in education costs and funding.) But, he goes on to point out, the cost of college is influenced by the cost of healthcare, which has been increasing far more quickly than GDP or inflation.

The Affordable Care Act primarily addresses health insurance coverage. It does have some provisions aimed at reducing costs, but as I wrote earlier this week, we still have a long way to go in figuring out how to reduce costs while maintaining or improving the quality of care.

The fact that rising healthcare costs contribute to cost growth in education — and, really, in any sector that requires work from a lot of people who get health benefits — is just one more reminder that failing to address healthcare-cost growth will affect our entire economy.