The Education Business Blog

My last post on the difficulty of educational reform got me thinking about that other massive system we are trying to reform - healthcare. One way to understand the healthcare system is to compare it to education - where we have had universal single payer access for over 100 years.

In that vein - what would education look like if if it were run like the healthcare system? By transporting our healthcare practices to another environment we can strip away the patina of familiarity and acceptance and see some of the insanity in our system in a harsher light.

Well meaning people can disagree strongly on the specifics of what is needed (and they do). I found as I wrote this that I had to examine my own pre-conceived notions. For example - state funding for education creates some of the same problems the system of private monopolies in medical insurance forces us to wrestle with. The public option in healthcare is the mirror image of charter schools in education - both aim to open up competition and provide alternatives.
There is more than enough idiocy go around here - in what follows we don't spare Doctors/Teachers, Patients/Students/Parents, Politicians, Insurance Companies, and Lawyers.

THE SYSTEM

• We would spend twice as much as any other industrialized country on education and our results would put us at the bottom of the list in learning outcomes. Despite this, many would go around touting that we have the best education system in the world, providing walking talking evidence that we need a better educational system.
• Most people before the age of 65 would not qualify for public education. It would ALL be private schools funded by insurance largely paid for by employers. Parents out of work? See you at the mall kid.
• 18%, or 9.7 million kids, would not qualify for schooling. Enrollment would require evidence of Education Insurance. The uneducated would be encouraged to pull themselves up by their bootstraps by trust fund pundits in the media. Most would have no clue what a bootstrap is (pundits or illiterates).
• Pre-existing ignorance would bar you from receiving affordable education insurance. Failure on any test, quiz, or paper - ever - would be cause for termination of coverage if not disclosed in advance. Students would routinely be subject to recision for ignorance of their own ignorance. This would make sense to people.
• 60% of all bankruptcies would be due to Learning Disabilities and Special Education needs. 60% of these people would have Education Insurance when they discovered their child needed special attention. In order to qualify for subsidized care you would need to go bankrupt, lose your home, or get divorced.
• For uncovered people any learning needs would be covered by intensive personal tutoring provided at "Emergency Learning Rooms." Services in these facilities would cost 10x what regular classroom instruction costs and would be passed on to the insured population as part of their premiums.
• Hordes of 4 year olds getting socialized government education would show up at congressional town halls and throw tantrums about keeping government out of their socialized education....
• While taxes were cut by $1,500 a family per year over the past 10 years private education costs would have risen by over $5,000 per family - a net increase of $3,500. Public subsidized education, which would be a net savings to the average family, would be popular with over 70% of the people. Despite its popularity politicians would refuse to consider it. The profits of their major donors in the education industry would be a higher priority for them.
• Schools would be overflowing with supplies. No need - however specific - would go unmet. Meanwhile, patients in hospitals would be encouraged to hold bake sales for things like sheets, syringes, and bedpans.

EDUCATION INSURANCE

• Education Insurance would consume 25% of the money spent on education for administrative overhead and profits. Free market zombies would earnestly argue that this is efficient. By comparison, administrative costs for socialized education take an average of 5% [as true for Medicare as it is for Education].
• If you needed access to an expert on a particular subject (economics?) you would need permission from your Education Insurance company. This permission would be routinely and randomly denied by insurance company "Ignorance Panels" even if your Homeroom Teacher thought you really needed the information. The bureaucrats making these decisions would fund fierce lobbying efforts to keep more efficient government bureaucrats out of their turf.
• Education Insurance CEO's would each make enough to fund an entire school district every year. Despite the gross inefficiency of their companies [see above], any attempt to challenge this allocation of resources would be met with resistance.
• Education Insurance Companies would operate as monopolies within large sections of the country. Over 90% of the coverage in many states would come from one "provider." Due to strong lobbying efforts congress would exempt these companies would from anti-trust laws.

STUDENTS

• 70% of the money spent on education would occur in the last year of life. Heroic efforts would be made to teach doddering seniors philosophy and particle physics in their waning days. Family savings would routinely be wiped out by intensive technology based instruction over the last couple of weeks of life.
• Efforts to get families to think about spending money at more appropriate developmental stages would be decried as "Ignorance Panels" and would be stripped from any legislation. Grandparents would beg their heirs to keep them from memorizing the state capitals in their final hours.
• There would be no incentives for people with access to insurance to make good educational choices. If you have education insurance there would be no difference in cost regardless of the lifestyle choices you make. Reality show addicts who avoid anything involving the written word would pay the same as those who watch PBS or do crosswords. Ignorance would be bliss.
• The concept of preventive learning to help people better themselves would be seen as an non-reimburseable personal choice under most Education Insurance plans. Electives would only be available to the economic elite.
• Many of the wealthy would purchase cosmetic learning - fooling no one but themselves.

TEACHERS

• Teachers Unions would be some of the strongest advocates for reform. They would beg for more accountability and a rigorous focus on outcomes.
• Teachers would charge by the learning objective and would make commissions from the testing and textbook companies. The faster they rush through lessons and the more tests and materials they could order during the process the more money they would make.
• It would take 8 years to become a teacher, including a couple of years of 24 hour teaching shifts.
• Teachers would not receive a tenured position after 2-5 years on the job. They would be subject to the labor market fluctuations just like everyone else.
• But - as licensed professionals - teachers would be paid 2-3 times what they make today.
• Society would accept a system of Educational Malpractice suits against teachers. "We'd signed him up for Chemistry but it conflicted with Calculus" complained a typical set of parents. "So they slotted him into English Literature and now he wants to be a Romantic Poet. The lifetime costs of this tragic shift in interest are in the millions of dollars - its only fair that we get some help with this."

IN CLOSING

I hope this attempt to examine this question with a little humor has opened some eyes. It could have gone on much longer - but I hope this makes my point. Universal access to education has on the whole been a huge success in our society. We should have universal access to healthcare as well for many of the same reasons. But the most fundamental reason to reform healthcare is that it is a moral challenge to our culture, in the same way education is.

Analogy is an effective educational strategy - with the ability to speed comprehension in the same way a power drill speeds home repair work. But it also has its limits. This has been a fun post to write - but I have no doubt it offended some people I hold near and dear. If I have - my apologies.

Education has its own share of thorny issues - and the pressure there is in the opposite direction of healthcare - towards more privatization. But given the out of control costs, gross inequality, and life and death impact, healthcare is the higher priority. It is good that we are tackling it first.
The fight over education reform will come up next year when the education act is up for renewal. Perhaps then we'll reverse this lens and see what Healthcare would look like if we ran it like education.

The Superintendent's panel at EdNet this week featured a discussion about education reform that was like a cold bucket of water to the face.

The Supers were teaching us about inertia, the tendency of objects to maintain their current state. As Newton himself put it:

The vis insita, or innate force of matter is a power of resisting, by which every body, as much as in it lies, endeavors to preserve in its present state, whether it be of rest, or of moving uniformly forward in a straight line.

The panelists were discussing what will change in the next 5-10 years in education. They were looking globally at the overall system (teacher evaluation, bell schedule, technology, instructional materials, funding flows, etc.). In this context the Superintendent of one of the largest districts in the country (LACOE), in a state (CA) that is experiencing a state of extreme financial distress, stated that she didn't think anything significant would change until we had a "major crisis."

If what we are experiencing right now isn't a major crisis I shudder to think what the hell would fit the definition? National bankruptcy? Nuclear Holocaust?

The Superintendents do expect to see change, but it will be small bore. They believe meaningful reforms will happen on a pioneer basis in a few schools and districts. But the larger issue of systemic education reform will require an even greater crisis than we currently have.

The system is so large and has so much inertia that even those with the will and positions to drive change don't hold out much hope for progress.

Think about that.

Clive Thompson over at Wired has a great short essay on the modern revival of the written word in the age of social media. He cites work done at Stanford that shows that todays students are writing more than their parents - in fact 38% of their writing is has nothing to do with school. Better yet - they are writing for an audience - or at least an audience wider than a single Professor.

Here are a couple of key quotes (emphasis added):

...young people today write far more than any generation before them. That's because so much socializing takes place online, and it almost always involves text.

It's almost hard to remember how big a paradigm shift this is. Before the Internet came along, most Americans never wrote anything, ever, that wasn't a school assignment.

The fact that students today almost always write for an audience (something virtually no one in my generation did) gives them a different sense of what constitutes good writing. In interviews, they defined good prose as something that had an effect on the world.

I also like the reference to "haiku like concision."

First Hand Experience

Writing to engage an unknown audience is a skill that, until very recently, only a few of us have had to master. My blogging experience has convinced me that this is a good habit of mind to develop. When I have to explain my thinking in an on-line context I'm forced to organize my thoughts into a logical sequence and put some metaphorical polish on them. Its a mental workout.

When I started this blog over 2 years ago I realized that I hadn't written for an audience in decades. Other than a couple of brief forays into campus journalism I'd almost always written for someone I knew on a topic that was an assignment or an internal work project.

When we are sharing a drink at the EdNet reception tonight I'll be able to speak with a bit more authority and ease than I could pre-blogging.

Implications for Publishers

A critical part of engaging and motivating today's learners is incorporating the new literacy tools into teaching and instruction. Just because writing is an assignment doesn't mean the only person who counts is the teacher.

Imagine an assignment where the grade involves engaging others with your writing - provoking a thoughtful response to your ideas. Wouldn't this be far more interesting than regurgitating the facts? Wouldn't it be more authentic? Wouldn't the engagement provide a wider view for the instructor to gauge the work of the student?

Here are a few questions to stir the pot as you look at your own materials.

• What are you doing in your products to encourage writing that is visible beyond the classroom?
• Are you engaged in social media yourself - learning first hand the new craft of writing?
• Have you created an on-line space where students can share their ideas?
• Do you reference tools and resources that allow students to blog, wiki, tweet, and plurk?
• What are you doing to help teachers make this transition?

EdNet 2009 starts this Sunday in Chicago. This is one of the three most important events of the year* for networking and professional development in the education industry. I've been attending since the early 90's with only a couple of absences.

Nelson Heller, EdNet's founder, has also been a friend and mentor - as he has so graciously been to many of us across the industry. This year the conference is under MDR's aegis - and it will be the same top-notch opportunity to expand your consciousness it has always been

Why is this event important? In a nutshell it is all about conversational efficiency. You can talk to more people about partnerships, recruiting, selling, or just "gettin ta know ya" in a few hours at EdNet than you could in two months on the road.

Making The Most Of EdNet

Here a few tips I've learned over the past 18 years that might help.

1. Ignore the sessions. The most important work at EdNet happens in the lobby, bar, and coffee shops around the hotel. If your goal is to have conversations with a lot of folks you can't very well do that when you are sitting in a session.

2. Attend the sessions. That said - there are some wonderful opportunities to polish your knowledge base and see the industry in new ways in the sessions. Take the time to scan the schedule and star the ones you want to try and attend.

3. Be clear about your goals. If you show up without a clear idea of the kinds of conversations you want to have there are endless opportunities to engage in meaningless banter. This doesn't have to take long - hell you can even do it on the inbound flight. You also don't have to have specific people or companies in mind, just let folks know what you are after and opportunities will find you.

4. Learn to gracefully exit non-productive events. At some point you will find yourself in a meeting or session that adds no value to your goals. Find ways of exiting these as kindly as you can. You never know when you will want to engage with the folks you are disentangling yourself from - so don't be rude. But don't let them waste your precious time.

5. Leave time for serendipity. Some of the best meetings I've had at EdNet happened off the cuff. Don't over-schedule yourself.

6. Your ears are more important than your mouth. There are many people at EdNet in "pitch" mode - looking for anyone who will listen to their story. I've found that an enormous amount of market intelligence is available for free - but you have to ask good questions and listen hard to the answers. Leave the pitch at home.

I hope to see you in Chicago in a couple of days - travel safe!

* The other two are the AEP Summit and SIIA conferences.

Special Education appears to be the first K12 market segment seeing the education stimulus dollars flow in volume.

At PCI Education we saw our numbers start to move up towards the end of May. By August we were roaring on all cylinders. As a private company we don't report out our details, but July was up over prior year and orders booked in August were more than double what we saw in 2008. I've heard through the grapevine that Cambium is in the same boat.

What is particularly stunning for us is that according to the reports on the USDOE's site by the end of August only about 15% of wave 1 of the IDEA ARRA funds had been committed. This handy report shows all the stimulus buckets for education and how much each state has already spent - bookmark it if you don't have it.

As I meet with other folks around the industry I'm not hearing similar stories about revenues. Some people have seen a modest pick up, but so far other segments seem to be lagging behind us. So the important question is - is there something unique about Special Ed or are we just on the leading edge of what everyone else will start seeing soon?

Timing

The Special Ed and Title 1 dollars were the first education stimulus money's released to the states back in April. Given this, it makes sense that our customers would see the funds first.

It took a full 8 weeks before we even saw a modest uptick and a full four months before we were comfortable that we were seeing a true trend. At months 5 and 6 we seem to be fully into it.

I would be interested in hearing from others in comments if you are seeing similar patterns. As confirmation - we only started hearing from people at the District level that they had the funds in hand towards the end of July.

Market Cycle

We also know that the regular IDEA funds were released as normal in July. Since districts usually order most instructional materials in the summer, what we might be seeing is educators spending their regular IDEA funds in anticipation of using the stimulus funds for salaries etc. later in the year. Even if this is true - which given the restrictions on using ARRA for avoiding the funding cliff doesn't seem too likely - we are seeing a huge spike in business.

The bad news for other publishers is that if ARRA funds for your products were not available in the summer buying months you may not see the big bump until next summers buying season. We do expect more of a bump in November/December than normal as schools buy materials for the spring semester - but the big buys will come in 2010. The good news - districts have two more years to obligate the funds so they won't loose the funds at year end.

Clear Guidelines

One of the advantages Special Education has is that the IDEA funds are specifically earmarked and because the program is decades old the guidelines are clear. As an established funding arena it may just be easier for districts to start spending these funds first because they don't have to engage in all the internal negotiations more ambiguous new programs (like SFSF) come with.

On top of this, because the Feds plan to audit the spending for compliance, school districts may hang back for more complete guidance in other areas before being comfortable spending the money.

Funds may be taking longer in other markets because there are two additional steps involving a lot of politics that Special Ed can ignore.

1. Get clear guidance from the Feds on what is allowed
2. Negotiate within a district on how the funds will be spent

New Products

Some of our particular spike may also be product related. PCI has two new comprehensive reading programs which are being well received in the market. PCI Reading Program and our new Environmental Print Program which are for students with intellectual and developmental disabilities at the middle and high school level. These are selling very well and this is driving some of the spike in our business.

The good news is that if you have something similar in terms of new products the stimulus funds will give them wings into the market. The even better news is that this doesn't account for all the activity we are seeing.

If you have been skimping on R&D and don't have recently released product this may be more of a problem for you - schools still want fresh copyrights!

Conclusion

I believe we are among the first to see what other publishers will start seeing as we get into the fall. There are a couple of unique things about Special Ed and about PCI that may be accelerating the funds coming our way - but the funds will flow. We expect the pace to continue for the next several months and to peak in the summer of 2010.

Perhaps the best news in all of this is that the spike in business is pushing us to do exactly what the act was intended to do - we are hiring for several new positions.

Student Information Systems (SIS) and Data Warehouses (DWS) are the bedrock enterprise software systems in K12 school districts. The K12 Decision Support Systems Market Report is now available. The 118 page report is based on a survey of over 300 district level IT Directors.

ARRA Accountability Market Intelligence

Given the strong emphasis in ARRA on data-driven decision making (D3M) and accountability auditing, the information in this study will provide valuable insight into a market with an urgent and well funded need. The report is a map of territory that has been uncharted.

The Education Recovery site states the stimulus funds will be carefully audited:

ED will hold ARRA fund recipients accountable through reporting and monitoring...ED will monitor all ARRA programs throughout the life of the grants...This includes annual reporting of participation and performance data and site visits to many States.

How will this happen? We know from the report that 93% of Districts have an SIS and that over 75% use their SIS or DWS as their primary reporting tool for NCLB accountability reporting. Nothing else even comes close. The detailed breakout is in the study.

Report Content

The information is tailored for the needs of SIS and DWS vendors, partners, investors, and policy makers.

The report covers:

• Market share trends
• Intent to purchase by segment in the next 36 months
• Brand awareness and market momentum
• Customer satisfaction levels and causes
• Pricing models and preferences
• Product lifecycle
• Implementation models and timing
• District IT infrastructure (including SIF implementation)
• And much much more.

See here for a complete table of contents.

This study builds on the popular 2003 SIS Trends and Opportunities Report. I have had many requests over the years for a follow up study to show how the SIS market is evolving. The new report leverages the 2003 information to provide a longitudinal view of the SIS market.

As the folks at Educational Systemics and I considered our options we decided that we also needed to cover the emerging market for Data Warehouses. Many districts have installed these systems in the past 7-8 years and we wanted to know what this important new segment of the market looks like. We added a section to the report for this market segment and the insights we gleaned should be useful for decision makers as they evaluate what is next.

Purchase Information

More details about the report are available at K12-Decision-Support.com. You can purchase off the site using any major credit card. Important - SIF, SIIA, and AEP members get at 15% discount.

The 118 page PDF (1.5 mb) will be mailed to you within 24 hours and is for distribution within the buying organization.

You can also contact me with any questions you have about the report by emailing me at info@k12decisionsupport.com.

Many Thanks

Any project of this scope is a collaboration among many people.

• The team at Market Data Retrieval (MDR) were fantastic sponsors who provided a helping hand at many crossroads.
• Our media sponsor Technology & Learning provided the valuable initial lift to get the project going and will be reporting out some of the findings in their magazine and web site.
• Educational Systemics was critical during the survey design phase - making sure we got the questions right. They will be providing follow up consulting services to those who are interested.
• Larry Nelson stepped in at a critical time and wrote the Data Warehousing section.

The patience and persistence of this crew insured that this important information would see the light of day.

We'll be blogging here and over at the report site on some of the high level findings in the next few weeks. Be sure to add both sites to your RSS if you are interested in following this thread.