Rouse on Transformation

The debate in Washington seems stuck in partisan positioning and sound bites.  We have lost track of the fundamental objectives that need to be pursued.  I think the overarching objective should be quite simple – we want a healthy, educated, and productive population that is competitive in the global marketplace.

We do not really want the lowest cost healthcare system or education system.  That would be simple; just zero the health and education budgets.  We really want high value healthcare and education systems.  Value might be defined as the extent to which the overarching objective is achieved, perhaps divided by the cost of achieving it.

Were the U.S. a corporate entity whose CEO could decide what would and would not be done, it would be easier to pursue this objective.  However, the wide range of stakeholders in our society makes the decision process much more complicated.  Two aspects of this process exacerbate the difficulties.

First, we need to invest now for returns many years in the future.  Investing now in preventing chronic disease, e.g., diabetes, will save enormous sums decades from now.  However, the people who would otherwise have to pay these sums are not here now to influence the decision process.  Similarly, we need to better educate our children so they will have globally competitive knowledge and skills a decade or two from now.  But they are not part of the decision process either.

Second, it is often the case that the organization that might invest in the future is not the organization that will gain the returns when the investment pays off.  States invest in services that subsequently save the federal government future outlays, and vice versa.  This creates strong incentives to minimize current outlays, as there will be no direct returns to justify the investments.

What we need is somebody who owns the future – all of it, not just their piece.  They need to be “at the table” and have influence.  They need, for example, to argue for sacrifice now that will enable higher payoffs later.  Sacrifice might be services reduced, taxes increased, or privileges eliminated.  I am less concerned that any particular sacrifice happen, then I am that an influential person or organization be making that argument.