The Outstater: The Pence Amoeba and ‘Fee-for-Service’

June 3, 2016

TO WATCH THE PENCE CAMPAIGN is to watch a lab experiment in biological tropism. The word picture is a group of amoebas on a microscope slide reflexively retreating this way and that as someone (we suspect Matt Tulley, the Star columnist) threatens them with a pencil tip.

First there was the about-face on protecting Christian merchants against a Lesbian, Gay, Bisexual, Transgender power play. Now comes an about-face on a promise to eschew Washington-defined pre-school education. That promise, it turns out, also was qualified. The governor is said to have been honoring an understanding with key legislative leaders that the program would not be expanded unless it could be shown to “work.”

Guess what? As the election nears, the campaign declared this week that government pre-school education does indeed “work” and federal aid can now pour in — and, coincidentally, the punch can be taken out of opposition advertising implying that the governor hates little children.

But there are others, those operating independent of electoral cycles, who are not so sure. Our friend, Dr. Cecil Bohanon, for one, has made a complicating observation. It is that any benefits of pre-school seem to be in the parental realm of teaching self-control rather than of achieving the central goal of the Obama administration’s $75-billion program.

That is, government-mandated pre-school, independent of parental involvement or social background, will not narrow the achievement gap between rich and poor students. “It seems ironic then to use the coercive mechanism of government (yes, taxes are coercion) to set up programs to teach self-control to groups that social scientists tell us lack self-control,” Bohanon concluded. His article was followed two years later by our researcher, Hang La, who surveyed other studies raising the same doubt.

Most recently, the American Interest magazine reported that a British study followed up work in Tennessee and Quebec to find that the primary if not the only benefit of government pre-school was that it saved childcare costs for certain parents. “The better course of action is to offer those parents a tax break — that is, to give money back to them directly to spend as they see fit, rather than grafting it on to an expensive and probably ineffective new federal program,” argued the magazine

A promising idea, especially for an election year. It would require a campaign team, however, willing to think outside the amoebic.

References

Cecil Bohanon. “Adam Smith and the Rationale of Pre-School.” Backgrounder, the Indiana Policy Review Foundation, Nov. 11, 2013: http://inpolicy.org/2013/11/bohanon-adam-smith-and-the-point-of-pre-school/

Hang La. “Where Character Begins — or Not.” The Indiana Policy Review, fall 2014.

Editorial. “Universal Pre-K Still not a Panacea.” The American Interest, May 31, 2016: http://www.the-american-interest.com/2016/05/31/universal-pre-k-still-not-a-panacea/


WE JOURNALISTS finally have a name for those quasi-governmental groups springing up around the nation. You know the ones, part municipal economic-development office and part Chamber of Commerce.

They are “fee-for-services” agencies, we are now told. That is according to council testimony from an officer of the particular model in my Indiana town. The officer seemed pleased with the new term of art, repeating it for emphasis throughout his presentation.

That may have been because he was trying to deflect accusations that the groups represent something more onerous — old-fashioned political machines trading in pay-to-play and crony capitalism.

“Going forward, we make the commitment to you that even though our representatives will lobby, persuade and argue with passion our positions, which we believe will make this community stronger, we will at no time use our position as a chamber of commerce to threaten electoral retaliation for taking a position contrary to ours,” he was quoted by the newspaper.

Fair enough, but he went on to explain that his agency puts together bundles of council-approved “tools” (tax breaks, rebates, free donuts, etc.) and shops them to prospective developers around the country, returning to council for political acclamation and of course a ribbon-cutting.

Technically, Fee-for-Service (FFS) is the payment model where services are unbundled and paid separately — all quite innocent, we are assured.There are, however, a few negative connotations. Critics say it gives an incentive to provide more services than the value would merit.

In healthcare, for example, where it is the predominate model for paying physicians, it is thought to raise costs and discourage efficiencies. So, as far as branding goes, FFS is not quite as bad as Tammany Hall but certainly not in a class with Disneyland or Procter & Gamble.

Moreover, when applied to public policy there is concern that the services cannot be weighed to justify the fees. For the success or failure of economic-development “tools” such as tax breaks, rebates and free donuts is impossible to empirically measure, the benefits likely to be either exaggerated or irrelevant.

That last would put it in a separate category of FFS, the one with liver pills, vitality potions, palm readings and quackery.

It is good when everything has a name.

— Craig Ladwig


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