Wednesday, October 14, 2015

"First Principles" and Benefits Policies at Public Universities--How "Where You Start" Determines the Shape and "Ends" of Benefit Programs

(Pix © Larry Catá Backer 2015)

I have devoted a lot of space on this essay site to the issue of benefits, especially at public universities in the United States (see eg here, here, here, here and here).  Beyond its obvious relevance for the operation of the modern public university, the focus on benefits has another and perhaps more important aspect:  benefits policies are a doorway to understanding the core managerial approaches of senior university administrators across the United States.  This class of university servant--now much more aligned with their own professional class interests across universities (eg provosts tend to align with other provosts with whom they share much more in common than with those upstream or downstream the emerging chains of university command)--tends to set the parameters within which all discussion of all aspects of the university are now constrained.  The recent efforts at Penn State (On the Practice of Town Hall Meetings in Shared Governance--Populist Technocracy and Engagement at Penn State) suggest the normative parameters of this significant shift in the locus of authority to determine the basis on which the university sees itself and structures its approach to identifying and meeting its mission.  (See also here). 

To set the first principles of an issue, then, is both to shape the discourse (the way it is discussed) and the constraints (the structures within which that discourse is viewed as legitimate). This essay suggests the way that public universities now set these first principles for approaching the "issue" and "challenge" of benefits (notice how even here I have been able to shape the discourse by starting from the premise that benefits presents an "issue" that poses "challenges"). I will suggest that, in the hands of senior university officials, increasingly remote from and indifferent to any need to empathize with, their faculty and staff rank-and-file, benefits has ceased to be understood as a positive for the university and instead is almost invariably clothed in the language of burden or through the imagery of instrument to more directly shape the workforce they "own" into something that will profit them better.

The way senior administrators shape the discourse of benefits, very much like the way they tend to shape all discourse touching on the university, is to employ the mechanics of populist technocracy (here and here).  These techniques revolve around public events in which senior administrators control the discourse, speak to an audience expected to listen and absorb, with the expectation that technical questions may be asked, but that the foundational assumptions of the information (policy) conveyed are beyond discourse. That constraint is legitimated usually through the exhibition of selected members of the lower orders (faculty and staff) who were drafted to provide comment or technical expertise and in this sense represented the rest of the university community in structuring the discursive constraints on matters of policy. The result of this populist technocracy is the shift of the power to "identify" and determine the character of an "issue" from a conversation among stakeholders to the decision making apparatus of senior administrators. In other words--it is senior administrators who identify issues and determine the limits on the ways these issues can be addressed. The consequence, of course, is that the outcomes of an issues analysis will largely be determined by the way that senior administrators insist on framing them. And that framing is hardly ever open for discussion with the broader stakeholder community in the university.

Let us consider a hypothetical case, one built around a hypothetical presentation by a senior financial officer of the Public University, perhaps one reporting directly to the provost, or a Human Resources chief.  In either case the presentation will be made to elite faculty and staff for the purpose of engagement--understood in this sense as for the purpose of conveying the parameters within which these administrators intend to constrain the discussion of the subject.

The object of that presentation might be an update on the activities and thinking of a Benefits Advisory Committee, a task force (on the dangers of task forces here) well marbled with faculty experts and administrators.  The "charge" of the task force sets the contours of the discussion, and largely pre determines its focus--"to develop a sustainable path for health care and medical provider delivery."  The charge is then further constrained by a set of guiding principles which themselves speak to normative choices that also refine the direction to be taken by the work of the task force in its production of acceptable "product" for the consumption of senior administrators (a product whose scope is largely understood).  The guiding principles will usually point to issues of engagement, educationand service delivery.  Here is an example:
1.  Deliver benefits through a sustainable structure that promotes participant engagement in health care;
2. Provide education, tools and resources participants need to be better consumers of health care;
3. Increase the use of high value healthcare services to improve delivery and mitigate charges. 
While the three guiding principles appear oracular at first blush, a closer reading reveals the way that they substantially point the discussion about benefits in a very specific direction.  And in engaging in that policy pointing, effectively suppress discussion of alternative directions for the development of policy principles. So what might these three principles mean?

1. Sustainability is an infinitely malleable term, though in the parlance of administrator-babble it tends to means cost reduction efforts.  Cost reduction is itself "sustainable" in the sense that benefits costs can be either recouped (through savings or reductions) or by shifting the cost burden from university to "beneficiaries".  But underlying "sustainability" is also the notion that benefits have no intrinsic positive value other than as "income equivalent" and that, as such, it falls within the category of "expense" that must always be subject to reduction (either directly or through the mechanism of productivity gains captured exclusively to the institution). But there is more.The "promotes participant engagement in health care" is another elegantly disguised way of asserting an employer's right to control the health decisions of its labor force.  In exchange for benefits, the employer may, it seems under this principle, promote (through the techniques of cost adjusting sustainability regimes) view their workforce as a large eugenics project.  Just as farms work hard to manage the health of their animal stock, so employers must manage the health of their labor pool.  On the turn to eugenics in American business see HERE and HERE.  

2. The second principle is easy enough to decipher.  It imposes on the university the task of managing perception.  It is the social engineering of eugenics applied to a labor force which, as a sustainable but costly asset in the production of value to the university, must be socialized to habits that make them more useful (more productive given a steady cost structure in the form of unaltered pay).  Thus, to speak of benefits in the American public university is to speak to educating labor stock as to providing better utility to the employer through "lifestyle" habits that make labor less costly to maintain given a unit of salary cost.  

3.  The third "principle" is the most interesting for the presumption (and discursive constraints) it imposes in the context of discussion about benefits "policy."  The principle is meant to guide benefits policy discussion toward a value (to employer) based model in which the provision of benefits,and its use, is tied to the value added per unit cost of service--to the university, which has invested in a healthy stock of labor for sustainable production in its learning factory. At its limit, of course, this speaks to the notorious charges of death panels, that were once lodged against what became the Patient Protection and Affordable Care Act ("ObamaCare") (see eg here).

But speculation is unnecessary, because almost invariably, senior administrators are able to capitalize on the constraining power of their guiding principles to develop "priorities" that operationalize the principles in harmony with the underlying premise of benefits as both a burden on the university and as a means of improving the productivity of the labor stock. Priorities can take any one or more of these forms:
a. promoting the use of lower cost, high quality medical services among employees;
b. improving price and quality transparency for employees;
c. Increasing and improving employee education and communication;
d. Encouraging employees to engage in health care plan selection so that they are choosing the most fiscally beneficial plan for themselves;
e. Building a clinically integrated provider network within the region; and
f. building robust analytic capability and capacity to support evidence based decision making.
One can see, fairly readily, how principle is used both to constrain and guide "discussion" to policy by eliminating alternatives and focusing on a particular set of approaches consistent with the framing premises around which benefits policy is "built." A couple of these are worth some note.  The first is § c--improving education and communication.  This suggests a couple of  ideals that ought to be troubling for those who still cling to the ideal of shared governance.  The first is that "employees" are "objects" of "education."  Implicit in this notion is another--that education cascades down a hierarchy from superiors (those doing the educating) to its objects (those with an obligation to be educated).  It also suggests a disciplinary element to "education"--that employees who refuse the "education" may be sanctioned.  Education, then, is a technique that masks a command structure built into the increasing hierarchy that marks American public universities. Put another way, § c declares to labor inferiors that they are to receive instruction with which they must comply.   

Another is § d, that focuses on another masques disciplinary technique--"encouragement."  There is nothing wrong, of course, with encouragement.  But in this case the encouragement is toward employee choice that is managed and hardly free or neutral.  If the Guiding Principles and priorities mean anything, it means a specific direction for benefits planing.  To meet that objectives employees must be given the illusion of choice but "educated (§ c) into making the "right" (§ d) choice. The notion of "fiscal benefit" has proven also to be a double edged sword.  Some public universities have been pushing high deductible plans as fiscally beneficial because their periodic costs might appear lower than other plans.  But of course high deductible plans carry with them a large cost--when they are used the employee might have a large payment to make.  Here, as well, is a problem of empathy--for a senior administrator making over $300,000  high deductible plans may make sense.  They can afford the high deductible when it comes due.  But employees earning less than $100,000 do not have the same cushion.  Thinking from the perspective of large incomes, a danger for most senior administrators produces what appears to be an arrogance of decision making with the barest empathy for the economic conditions of most "staff."

The last is § f the foray into the jargon, highly popular among the administration class today in the United States, of "evidence based decision making.  The term, of course, is fundamentally misleading.  It suggests objectivity for a calculus that is inherently both subjective and ideologically framed.  What does evidence based decision making mean in a context in which benefits are understood as a cost center the objectives of which are to reduce its fiscal drain on the university without significant erosion of university reputation? Data may be neutral--but decisions about what data to collect are not.  Collected data are "activated" through judgments grounded in the way that they are analyzed--but that is also ideologically driven--though usually the premises and principles driving that analysis remain under stated. To say that data driven capability is being enhanced is to avoid the fundamental discussion--to what end?  What makes this troubling is that these and other questions, are never the subject of deep engagement with faculty and staff.  It is those fundamental determinations that are concocted within the black box that is the senior executive suite, whose determinations are then conveyed as from Olympus.  We are all fond of Olympus--it is just difficult to fold that political and governance structure within the increasingly mythical construct of the shared governance university. 

Where does this leave us?  It is possible to tease out a number of insights form this exercise that might prove useful at least as a descriptor of the evolving state of governance mechanics, and specifically its manifestation in the area of benefits policy.

1. Policy principles dictate policy outcomes.  Those with the power to develop basic principles effectively set the parameters within which all discussion is framed.  In a shred governance environment, the fundamental assumptions from which benefits are developed ought to be developed through communication and in the best cases consensus among governance stakeholders.  In hierarchically arranged business environments, such basic principles are the sole province of senior management.  That power then effectively frames the constraints within which any "legitimate" discussion may take place.  At public universities, increasingly,  senior administrators have been taking to themselves the sole power to determine ordering principles for benefits programs; and sadly, much of that principles development is purchased--purchased from the outside consultants whose cost is also borne by the people who feel the effects of these policy principles. Worse the costs of these purchased principles are not transparent.  Thus there is a double disconnect--senior administrators appropriate to themselves the sole authority to impose policy principles, and senior administrators purchase these policy principles from 3rd party providers. Where shared governance is concerned, the most important element of developing benefits policy is the principal element of benefits for which shared governance is rejected. Worse, these purchased principles may have little real connection with the specific context of the university within which they are embraced.

2. Policy principles foreclose discussion of alternatives as illegitimate. Consider in this light the effects of adopting the guiding principles described above --the principles effectively center policy on cost containment.  A cheap benefits program is an ideal.  As a consequence consideration of issues tied to a principle of delivering the highest quality health care for employees becomes impossible precisely because notions of highest quality healthcare do not compute in a regime focused in cheap benefits. By choosing a fundamental principle--sustainability--highest quality considerations become low priority issues.  By embracing sustainability as a fundamental principle, it may also follow that  the ordering principles of engagement, education and charge mitigation become both plausible and natural. Alternatively,  principles of choice,  proactive medicine and informed engagement with medical professionals becomes more implausible.  

3.   Policy outcomes define priorities.  Having defined basic policy principles as a cluster (usually) of purchased principles that may or may not have anything to do with the public university, the issue of priorities assumes a derivative character.  That is, priorities are necessarily a function of and constrained by the principles  to which they relate. With guiding principles of engagement, education and charge mitigation, surveillance and monitoring, social engineering geared toward reducing use of medical services, and cost shifting in a regressive way (the poorest benefits recipients incur the greatest burden in cost shifting that is, at bottom, the essence of high deductible plans come to the center of policy consideration as legitimate.  It also follows that policy priorities that emphasize presumptions of overuse and the use of transaction costs for benefits use (complex and difficult claims procedures, presumptions grounded in initial denials of coverage, etc.) become more plausible as priority strategies for "sustainability" as cost reduction.   An absence of engagement, and a willingness to buy this sort of perspective then produces a larger divide between well paid executives who are best able to absorb the cost shifting inherent in these programs and the rest of the university labor force.

3.  Priorities define the framework of compulsion.  It follows then that priorities follow from the development of a principles-policy complex grounded in sustainability.  These priorities are essentially grounded on social engineering within the labor force of the university. Thus it ought to come as no surprise that the priority emphasis is on education, on encouraging certain approved behaviors and conversely of punishing disapproved behaviors.  These also suggest an attitude that views benefit recipients are liability to "take advantage" of benefits in ways that cost the employer.  Thus, it is not uncommon to hear senior administrators grouse about the overuse of emergency rooms "too often" for injuries or treatment that might have been treated better elsewhere.

4.  The real effect of these techniques of policy is to shift effective costs of benefits from employer to employees while retaining the illusion of employer provided benefits. Savings plans provide a nice illustration fo the effect.  They appear designed to provide a way for employees to reduce periodic payments for medical coverage  while amassing the necessary funds to cover high deductible.  The reality, of course is that such savings options are usually too small and take a long time to amass.  The reality is that employees will have to pay out of pocket for benefits, or more likely that employees will have to pay out of pocket for supplemental insurance (umbrella coverage). That it applies with equal force to highest and lowest paid employees just twists the knife.  University presidents can afford supplemental coverage for benefit plans that are increasingly focused on cost and not service delivery.  Administrative assistants and fixed term faculty (more than 50% of the knowledge production workforce at many public universities) may not.

5. Senior administrators, and the paid consultants who provide much of their approaches to benefits, are hardy to be expected to change their behaviors.  Indeed, the opposite is more likely true. So wat is to be done?  For staff and faculty, of course, the answer is simple, and frustrating.  Faculty and staff must develop and present a counter narrative to that provided by senior administrators.  Principle must be countered with principle, priority must be countered with priority, and viable alternative approaches must be put forward as an equally legitimate way of framing and thinking through issues of benefits (and of course other topics of shared governance) to further the teaching, research and service mission of the university--rather than to further the ambitions of individuals to produce a university with more money, greater numbers, or less expense.  Appealing to ideals may well be the way to go.  But it must be ideals grounded in the realities of operation.  to that end, the profit and cost reduction model is not the only viable model for running a university--it just seems to be the popular model for this age.  And that is a shame.

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