Now that welfare has had to change and health care has had to change, it’s higher education’s turn. When I asked a faculty colleague at a sister institution how we could benefit from their experiences, I received the following enthusiastic memo:

“Our Restructuring Committee agreed early in its deliberations that in order for higher education to survive, it needed major reform. So after careful consideration, we have concluded that it is now time for the ‘managed care’ revolution to be applied to education.

“The major components of our new ‘managed education’ reforms deal with (1) the students as consumers of service, (2) the faculty as providers of service, and (3) the insurance company as keeper of standards and allocator of resources.

Students as consumers

“Since most students who enter our institution have already mastered readin’, writin’ and ’rithmetic, it is wasteful for them to take up scarce resources. Accordingly, every student is assigned an Education Related Grouping (ERG) code number based on the severity of his or her ignorance upon martriculation. The diagnostic number 4137, for example, indicates that a student has difficulty conjugating French verbs but is otherwise quite competent — able to read the blackboard from a distance of 30 feet, but a procrastinator on term papers.

“The ERG number, which follows a student throughout his or her career, is both a diagnosis of need and a passport to our many resources. With the proper number, a student can take any course we offer, provided that one of the gatekeepers deems the class essential for the student’s education. These trained computer operators sometimes must limit the number of days that a student can spend in any one class. The only significant constraint on the gatekeepers is the cap placed on the total expenditures they can authorize in a given semester.

Faculty as service providers

“Without controls, professors tend to take an interest in a student’s education beyond the minimum called for. Some lecturers have even been suspected of exaggerating students’ ignorance in order to provide them with additional time. To avoid such distortions in the system, decision-making has been taken out of the hands of the faculty and placed with those who know how to meet a payroll, namely, the actuaries at our insurers.

The insurer sets the standards

“Major economies are obtained by using the ERGs to restrict the length of a student’s stay at the university. Only the truly ignorant are allowed the full four years. The others are designated as ‘outlearners’ and discharged early to be taught by home instructors. These are not fully trained professors or teaching assistants, but rather para-educators who are supervised by the insurance company’s Office of Standards.

“Even though this greatly reduces the unit cost of each student’s education, home learning is still prohibitively expensive for students not covered by ‘Edugap’ insurance. Unfortunately, such insurance cannot be offered to families of students with pre-existing learning conditions, such as a C or D grade in elementary school or exeptionally high grades in high school, either of which may make them too expensive to educate.

“Managed education combines the best advantages of centralization and outsourcing. All important decisions are now made in one office with due regard for the bottom line. Objectors complain on occasion that the new rules restrict freedom of choice, but this overlooks the freedom of each student to choose his or her insurance company. With these steps, we improve efficiency while slashing spending dramatically. It is fair to say that higher education as we know it will never be the same.”

Daniel Perlmutter, Ph.D., is a professor of chemical engineering.