Dive Brief:
- As the Obama administration develops its proposed college ratings system to reward high-quality institutions with more federal financial aid, it should look to evaluations in the field of healthcare as an example, according to a New York Times columnist.
- Using that comparison, rating a college highly because it admits only students with high test scores — like the US News & World Report ratings do — is like rating a hospital highly because it treats only healthy patients, writes University of Michigan professor Susan Dynarski.
- Instead, if colleges are to be paid for their performance, a calculation of quality should account for the characteristics of incoming students, just as Medicare looks at incoming patients when evaluating hospitals.
Dive Insight:
Dynarski points out several similarities between healthcare and higher education. Both have present costs that pay off over the lifetime of the consumer. Both have investments and payoffs that can be separated by decades, so consumers can’t compare cost and quality of different providers based on their personal experience. In both markets, the producers know a lot more about the product than the consumers. The risk of overspending is high in both markets because consumers are shielded, by loans and grants for college and by insurance for healthcare.