It seems to be an all too common response when wondering about rising costs. Sometimes the question is asked and met with attempts at explanations such as the increasing costs of materials, regulatory burdens, or even proposed product improvement, but in the end the answer we most often come to terms with is…because they can. Those companies who develop the products based on consumer need can drive the costs.
For example, a recent Washington Post article described the 1921 discovery of insulin in Toronto. At the time, insulin was a phenomenal medical victory for those individuals who battled with diabetes. Insulin would “transform diabetes from a death sentence into a manageable disease.” There was one troubling ethical aspect that accompanied this discovery. The team of biochemists and physicians struggled with the “idea of profiting from a medicine that had such widespread human value.” Finally, they decided to file a patent and immediately sold it to the University of Toronto for just $3, $1 for each member of the team. The team felt that it was the best way “to ensure that no company would have a monopoly and patients would have affordable access to a safe, effective drug.” More than anything else, the team believed this was their gift to humanity.
In 1997, a version of insulin had a list price of $17. Today, this same vial is priced at $138. “The history of insulin captures one of the mystifying complexities of the pharmaceutical market—how long standing drugs become more expensive with time and competition fails to hold down prices.” In their defense, pharmaceutical companies state that the extensive improvements to the drugs are what drive costs, but at the same time improve the quality of the lives they support. Rarely are questions asked for these companies to justify the level of improvements in comparison to the rising costs of the product. At what point does the benefit of the product outweigh the increasing costs?
It is hard to believe that in 1868, tuition for the University of California, Berkeley was free for California residents. Tuition for non-residents was $75 a year. Today, undergraduate residents of California pay $33,418 in tuition and fees annually while non-residents pay $60,100. The parallels between the pharmaceutical companies and higher education indicate a significant shift in offering affordable products for the good of humanity with the desire to continue funding research and improvements.
The rub here is less about the positive results of these products then it is the increasing costs for what some say is little improvement in the overall product or its effectiveness. So, the real question is, should students be forced to make decisions regarding their education based solely on the sticker price? Can students afford to care about quality when they can barely afford the education at all?
Once upon a time, education was viewed as a necessity for the continued advancement of a nation. Today, students are challenged with understanding the value they receive justifying these increasing costs. We can argue that while there are innovative programs, little supporting evidence can be provided to support the rising costs in delivering educational options that are ultimately passed down to students who are already struggling.
As the Washington Post article mentions, “all boats rise with the tide.” Every time tuition costs increase, they increase across all institutions. The future depends on a recalibration of education costs without sacrificing quality. Innovation is less about the development and implementation of new technology. True innovation in higher education will be the result of institutions that can offer a quality education that meets students’ needs without breaking their piggy banks. The explanation for higher costs does not always have to be…because they can. The focus on higher education solutions should be because we choose not to.
How does your institution offer quality programs without passing along increasing costs to students?