I am always pleased to hear from our readers about our content, and especially responses to this column. In a recent communiqué, prompted by our current series on health care reform, a particular writer described how she had been confronted by unaffordably high costs of fairly straightforward services and how she overcame them. I think our readers may benefit from some of her insights, so here is her story in pertinent part.
“I will begin by saying that I have had no health care coverage for a couple of years now. ‘That’s not how I was raised,’ my parents would say, but it has been an economic reality. Fortunately, I have been pretty healthy. Let’s put it this way—if all of my health care premiums were still in the bank, it’d be a pretty healthy bank account, too. But that’s not how it works.
“Let me say initially that this ‘self-help’ I describe involves healthy amounts of Internet research.
“From my general reading, I had decided it would be prudent to embark on hormone replacement therapy (HRT), appropriate for my age to prevent osteoporosis and benefit cardiovascular health. So, for the first time in over 15 years, I decided to go to a doctor.
“I was very careful to ask in advance about the costs of the consultation and ancillary procedures, as I had to budget for them.
“I went to my appointment, again confirming the costs with the receptionist before I completed the paperwork. Before they could put me in the system, however, it took them some time to figure out the right ‘code’ for someone who was uninsured.
“After the visit, I stopped at the payment counter. There they tried to assign dollar amounts for the services rendered. Again, it took them quite some time to locate a fairly beaten up binder of plastic-covered sheets with the rates for services, and an equal amount to match up codes with services that should be charged. Actually, I was at the payment counter longer than the entire appointment had taken. After we got it all straightened out, I wrote my check.
“The regular exam and five blood tests totaled $1,200-plus. Those blood tests alone had been charged at whopping $800. And that’s with the ‘self pay discount.’
“No more than a week later, I received a bill from the doctor’s billing service attempting to charge me $70 more. I returned it with an explanation that nothing more would be forthcoming, along with copies of the bill marked Paid in Full and my cancelled check. Then about a month later, I received the same invoice as before, only now ‘60 days late.’
“This wasn’t long after The Charlotte Observer’s series of articles on hospitals’ aggressive collection tactics, so I wasn’t surprised. I sent back the same information and was prepared to do so each time in the future, but I did not receive any further invoices.
“As far as the prices for the actual HRT prescription, the lowest price I could find among all area pharmacies including Costco was $115 per month. So after paying that once, I researched whether I could find it cheaper online. As it turns out, there are a number of reputable pharmacies in Canada that anyone can order from for about one-third of the price of the same exact (non-generic) product in the U.S.
“So I chose one—www.onlinepharmaciescanada.com—and emailed them my prescription, and from that time on I have had exemplary service, receiving shipments every three months.
“As the year passed, I knew that, while I might have to see the doctor annually, there was no reason at my age and given current recommendations of the surgeon general, that I needed an exam every year. So this year when it was time to go, I determined to specify that no exam was necessary, only a consult on blood work with the doctor.
“Then I did some research online on how to get blood tests done less expensively. First, though, I had to request my records from the doctor to see the particulars of the blood tests that had been done the first time. When I picked up a copy of those records, I was glad I did, because they had a lot of information that should be part of my own personal health record.
“Poring over the medical jargon, I was able to discern the five tests I would need. And, as it turned out, there are many sites on the Internet where you can register and schedule to have blood work done at local facilities through Quest and LabCorp without a prescription and receive the results directly yourself.
[Sites include: health-tests-direct.com, healthtestbenefits.com, medlabusa.com, mymedlab.com, healthcheckusa.com, directlab.com, and firstchoicelabsusa.com (requires Rx).]
“So I registered online for the five tests I needed and chose the office location most convenient—which was, by the way, just a floor below the doctor’s office! I paid the total for the tests of $183 and the time and date of my appointment was confirmed.
“The LabCorp office was very efficient and had all paperwork in order. It was evident on the receipt that if I had not paid for the blood work through the online site, it would have been $700 for the five tests. (They say the doctor’s office usually adds on medical waste disposal fees, etc. to this amount.)
I provided the results to my doctor’s office and the subsequent consult was direct and informative and a mere $125.
“What I have learned is to be more aggressive about my own health care than ever before. While I did not have a choice—it was either find a more affordable solution or do without—I encourage others to research and aggressively inquire about expenses of non-emergency health care. This year, being proactive, what cost in excess of $1,200 last year was kept to a minimal $300 level, and managing the monthly prescription costs is a third as expensive.”
In my opinion, one of the best attributes of the new health care system set up by the Affordable Care Act is the emphasis on consumer choice and decision-making. American consumers are wise participants in our free enterprise system and know how to weigh the costs and the quality in their decision-making parameters.
The Affordable Care Act did not just happen because Democrats went into a huddle and delivered a bill to President Obama for his signature.
This Act is the result of over 50 years of legislative actions, one on top of another, that have brought health care to where it is today. It began when Congress approved legislation during World War II that allowed businesses to provide health care coverage to their employees without taxing those benefits. That was the reward to workers while wages were frozen.
Following the war, more and more companies competed for workers and provided health care coverage as a benefit for their employees. Out of concern for the elderly and the poor, Congress enacted Medicare and Medicaid in 1965.
Our population began living longer, longer than anyone expected. Health care improved with new technology and new drugs greatly expanding life expectancy. In the ’60s, people lived on average 68 years; now, people are living on average 79 years.
With increasing costs of health care for the uninsured, decreased enrollment of healthy individuals, and inadequate funding for Medicare and Medicaid, health care providers have shifted costs to the private sector—primarily employers purchasing coverage for their employees and families, further escalating premiums.
Since the original debates around “Hillary Care” in the early ’90s, cost-shifting in the health care system has become even more pervasive and complicated, both on the delivery level and the insurer level. Fee-for-service medicine and medical liability have only exacerbated the problem of costs.
On the purchaser side of the health care transaction, employees have taken huge advantage of their employer-provided and paid-for coverage. Those without coverage have avoided care except to get the most expensive care—ending up the emergency room or needing advanced care well beyond the costs more simple treatments that could have been effective much earlier.
Health care spending has grown to nearly 20 percent of our Gross Domestic Product (GDP). That is way out of line with most countries which tend to average eight to 10 percent of GDP. We simply cannot afford these expenditures.
Our Medicare budget is currently at $560 billion and expected to double in the next decade. Nearly 10,000 baby boomers are retiring every day and fall under the Medicare system. The number of workers paying into the Social Security System and to Medicare is declining.
When the Medicare program was started in 1965, there were 4 workers to every retiree. That ratio has fallen to less than 3 workers per retiree and will decline to two workers to every retiree by 2040.
The Urban Institute reports that the average couple will receive about $387,000 in Medicare benefits, while only paying into the system about $122,000.
Demographic shifts and trends produce burdens that are unsustainable. Obvious to those witnessing it firsthand, the ACA was supported by the American Hospital Association, the American Academy of Family Physicians, the Pharmaceutical Association, the American Nurses Association and many, many others.
The consensus was formed that systemic reform was essential for the future of our health care system; establishing incentives and requirements so that everyone pays into the system and everyone receives coverage—not excessive coverage, but good coverage. Everybody takes part. That is the mandate.
The irony in our current “debate” (government shutdown, whatever) over Obamacare is that the concept for the ACA originated with The Heritage Foundation, a conservative think tank, and the University of Pennsylvania. For the longest time, it was a Republican plan. In fact, that is where Romney latched onto it as governor of Massachusetts and implemented it there.
The ACA is being implemented as a both an individual and an employer mandate. It is full of challenges and difficulties. Many of them would be worked out if our two political parties would sit down and work out the changes and corrections that are necessary and helpful.
Nevertheless, the ACA and these major health care reforms have been in process since 2010. It is really unrealistic to have them “undone.” We have too much at stake.
What we need is to promote and reward healthy lives, and increase accountability of all parties—providers, insurance companies, drug and medical supply companies, patients, families and communities.
We need to use our limited health care dollars wisely. Everyone plays an important role in reducing costs and improving care while providing access for all. There are so many pieces to this puzzle, but we have to make progress. We have much work to do.
Republicans in the U.S. House of Representatives have now voted 40 times to repeal the Affordable Care Act of 2010 (ACA), although they have not yet put forth an alternative. They say they aren’t opposed to the idea of universal health care; they just think that the Obama administration and their allies in Congress went about it the wrong way. They’d repeal the bill and replace it with something better.
While the passage of time and the strength of their indecision alone probably make this a moot point, it is interesting to note just how much the text of what was once called the Patient’s Choice Act (PCA), assembled in 2009 by Sen. Tom Coburn and Rep. Paul Ryan, the two most influential Congressional Republicans on the issue, conforms in principal to the ACA as enacted.
Significantly, here’s how the PCA would have worked:
1. States would open health insurance exchanges where individuals and small businesses could buy insurance.
2. Insurance plans on the exchanges would have to provide a base level of coverage set by the federal government.
3. Insurers could not turn down customers because of pre-existing conditions.
4. Individuals and families would get a refundable tax credit to pay for insurance.
5. That tax credit would be funded by a limitation of the tax exemption for employer provided coverage.
Those provisions accurately describe both the PCA and the ACA. That isn’t a coincidence. According to an analysis by The Washington Post, “The ACA bears a heavy resemblance to basically every real universal healthcare plan that Republican legislators have proposed in the past half century.”
There are plenty of differences, of course. The ACA expands Medicaid and the PCA restricts Medicaid to low-income disabled people, while the rest are moved to private insurance. The ACA cuts Medicare provider payments and the PCA means-tests premiums. The ACA has mandates; the PCA auto-enrolls people in state exchanges, more of a soft mandate.
Much of the frustration with the ACA is its interpretation and implementation; the reality is that any law trying to reshape nearly 20 percent of our GDP will not likely be smoothly implemented. Our history demonstrates that implementation takes time and many adjustments; both Medicaid and Medicare have taken many years to implement and each has been adapted frequently since they were adopted in 1965.
The task is multiplied many times over when the responsible agency, the Department of Health and Human Services (DHHS), must set up the bureaucracy to administer the act and accommodate those states choosing to participate with and create their own health care exchanges.
Yet while the main portion of the ACA will not go into effect until 2014, the American public has become well aware of the new requirements being applied to all coverage:
1. Elimination of pre-existing conditions—benefits can no longer be denied;
2. End of lifetime limits on coverage;
3. Coverage for young adults on parents insurance up to the age of 26;
4. Plain language benefits information;
5. Covered preventative care for adults, women and children;
6. Coverage for your choice of doctors;
7. Holding insurance plans to be accountable: If they don’t spend at least 80 cents of every premium dollar on actual health care, they must refund the difference.
Although the DHHS announced the delay in implementing the employer mandate for one year, the individual mandate to obtain health care coverage is still in place. The good news is that in the states with newly-created state-sponsored health exchanges, the proposed rates for individual coverage are uniformly lower than estimated, allowing individuals better coverage at a lesser rate.
Health care spending is huge, consuming nearly 18 percent of the U.S. Gross Domestic Product. Many layers of rules and regulations from both our health insurance companies and health care providers have made it impossible to determine the costs of many even simple procedures, let alone the complicated ones. Health insurance premiums continue to increase at a rapid rate, but no better health care is being delivered. Clearly, there is a lot wrong.
It will be interesting to observe the impact of the Affordable Care Act (ACA) beginning in October of this year when those who are self-employed or employees of firms with less than 50 workers will be given the opportunity to enroll in coverage from a federal health insurance exchange.
October 1, 2013, will be the opening date for applications to the qualified health care plans being offered by private health insurance companies in your area through the federal exchange. Coverage will begin January 1, 2014. Many firms with more than 50 employees can maintain their own health care plans that were in place as of March 23, 2010, because they have been grandfathered in or approved by the Act.
Anthony Wright, executive director of advocacy group Health Access, describes the fundamental nature of the change produced by the ACA: “It’s a revolutionary improvement to move from a broken market where people are charged by how sick they are, to a competitive market where people pay what they can afford, based on a percentage of their income, on a sliding scale. Most consumers buying coverage in the individual market will get financial help and see their premiums go down.”
The ACA requires a set of core, federally-mandated benefits. The essential packages are intended to mirror those provided under a typical employer-sponsored health plan. At a minimum, the core benefits include:
- Ambulatory patient services, such as doctor’s visits and outpatient services
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including behavioral health treatment
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
The ACA links the essential health benefits package to limits on cost-sharing. So health plans that are required to provide essential health benefits will also be required to limit the amount consumers will have to pay out-of-pocket. Specifically, health plans will be prohibited from requiring consumers to pay annual cost-sharing that is greater than the limits for high deductible plans linked to health savings accounts.
Within these allowable limits, all health plans except grandfathered or self-insured plans will be required to provide consumers with specified levels of coverage. Levels of coverage are set as percentages of the actuarial value of a plan that covers the full essential benefits package with no cost-sharing. These levels are represented as Bronze, Silver, Gold, and Platinum. Coverage will be set at 60 percent, 70 percent, 80 percent, and 90 percent respectively.
While we will not know the actual costs of plans in the health exchange for the Charlotte region until they are published, and speculation that rates will be outrageous is rampant, the rates for California exchanges, under the rubric “Covered California,” have recently been released.
In California, it was speculated that rates might average about $5,200 per year; however, the actual rates are much less at an average of $272 per month for the lowest priced silver plans or an annual rate of about$3,265, and will be available from some 13 insurance plans. And it is just one of 16 states, along with the District of Columbia, on track to operate such an exchange.
Other states, including North Carolina and South Carolina, have chosen not to participate in a state-based model—at least for now—and are relying on a federally-facilitated exchange to provide people with that coverage, or entering into a partnership with the federal exchange.
At any rate, even the attempt to set uniform standards of care at uniform prices alone should be championed as a welcome change to our health care system, as well as making health care affordable on an equal basis to those less fortunate through no fault of their own.
Early indications show lots of reasons for states to “opt in” to the intentions of the new Affordable Care Act.
As the Affordable Care Act (ACA) is implemented, it will become clear that there is little in its guidelines and regulations that addresses health care costs. Nevertheless, the ACA positions business owners and consumers to become increasingly engaged and active in making health care decisions.
To make good health care decisions, they need to be armed with access to information about costs as well as quality, in addition to the overwhelming variances in coverage from one plan to another, one provider to another, one doctor to another and even from one procedure to another.
The current U.S. health care system was substantially configured in the mid-1960s when Medicare was introduced and approved by Congress and then President Lyndon Johnson to provide for the elderly. While most would agree that care for the elderly has been vastly improved—most seniors had no health coverage prior to its passage, it also created an incredibly complex system.
What is needed is health care transparency.
Health care transparency provides employers and consumers the ability to see provider-specific information on the quality and cost of medical services reflecting the true costs that include any group-negotiated discounts, as well as the costs of various facilities and diagnostic tests, and accounts for co-pay, co-insurance and deductibles.
Equally important to the display of costs is information about the quality of care indicated by collectible data such as patient outcomes, rate of complications, readmissions, hospital-acquired infections, and other factors.
In the 1980s, Medicare reimbursement was built around a diagnosis-related group system (DRG) classified into 467 DRGs. These were used to compensate hospitals for patient care. In 1992, Medicare adopted the resource-based relative value scale (RBRVS). From this system, providers received payments determined by the expected resources needed to provide care including physician work, practice expense and professional liability expenses. These could be adjusted by geographic differences.
As you might expect, providers started to use the Medicare reimbursement rates as the baseline costs and then add other expenses when individuals were not covered under Medicare. This is known as cost-shifting.
From 2006 to 2010, health care costs have increased by 19 percent while inflation over the same period has increased by 8.6 percent. Presently, consumers often have no idea what the cost of care will be until they receive sometimes multiple bills in the mail weeks or months after the services have been rendered. Health care transparency will benefit consumers, employers, providers and health plans to make sure costs are not being unfairly shifted and to assist them in determining the extent to which they can afford health care and in paying for the health care they consume.
A report delivered by the Catalyst for Payment Reform and Health Care Incentives Institute compares and rates health care transparency from state to state. Unfortunately, North Carolina and South Carolina were given Fs by the Institute. From their research, only two states deserved As, five earned Bs, seven achieved Cs and Ds, and more than half, 29 states received Fs.
To have any impact on health care costs, it is important that health care transparency be adopted as widely and as soon as possible, and delivered to employers, consumers and their families so they can make appropriate judgments regarding their own health care. As consumers increase deductibles and co-pays to afford health care, transparency becomes even more important.
One company that I know—Castlight Health—works with large self-insured companies to provide their employees with information about health care costs in their communities and how they vary with in provider networks within the company’s self-insured plans. This is exactly the type of resource that smaller businesses and their employees need to make wise decisions about purchasing health care in their communities.
Now is the time to act. The sooner policies, laws and regulations encourage health care transparency; the sooner consumers can act in their best self-interest and the better the outcome for the health care system. Technology will be helpful, but education and articulation of the need for transparency to our lawmakers will be immensely important.
Remember that costs are only one side of the equation. Quality outcomes are the other side of the equation and they should be contemplated and considered at the same time. With the tools that transparency can provide, our health care will improve and costs will be contained or maintained before they become unsustainable.
While the Affordable Care Act (ACA) was passed by Congress and signed into law in 2010 and was substantially upheld by the U.S. Supreme Court in mid-2012, the impact of its reform efforts will not take full effect until January 1, 2014 when individuals and employers will be mandated to purchase coverage under the new requirements set forth in the legislation and directed by the administrative rules established by the Department of Health and Human Services (HHS).
In all likelihood, you have an opinion about this Act and what it will do to or for your life, your business and your family. Regardless whether you support or oppose its implementation, it is the law and we must make every effort to comply with it.
What is important to know is that the Affordable Care Act is not incremental, but substantially systemic reform of our health care system. Our system of health care in the United States is badly in need of changes. The primary funding for health care—employer-provided coverage, Medicare (coverage for those over 65) and Medicaid (means-tested coverage) are failing or have failed to deliver coverage at an affordable cost for a significant share of the U.S. population.
Businesses are reaching the breaking point. An increasing number can no longer afford coverage for their employees or their families. As a result, more and more are going without coverage.
At the same time, health care costs continue to skyrocket. Those without coverage are receiving uncompensated care which is significantly more expensive than regular primary care. Add to that the advancements in medicine, technology and pharmaceuticals, as well as the fact that individuals are living longer, and it becomes apparent why total spending on health care has soared to 18 percent of GDP.
Total spending for 2013 will be nearly $3 trillion in the United States. Private insurance and out-of-pocket spending will reach $1.26 trillion or 42 percent of the total. Public spending through Medicare, Medicaid, and all other federal programs will total $1.72 trillion or 58 percent of the total. With nearly 10,000 Americans reaching 65 years of age each day, total spending will climb to about $4.6 trillion in 2020. Per person, that is $9,348 per year in 2013 and $13,708 per year in 2020.
Considering all these elements, it is important that our health care system change. There are four yardsticks that need to be applied to reform—access, coverage, quality and cost. To a degree, the Affordable Care Act addresses access, coverage and quality, but it does very little to address cost. Costs to the individual, costs to the employer and costs to the health care provider are going to grow.
The ACA’s mandated Health Insurance Exchanges (HIX) open for enrollment Oct 1, 2013. They are state or federal online marketplaces where Americans can purchase “affordable” health insurance from private health care providers. Shoppers can use a price calculator to find the best deal for them and their family. The health insurance exchanges are estimated to provide up to 23 million people with affordable health insurance.
States can build a HIX on their own, partner with one or more other states, or have the federal government build and run the insurance exchange for them. Both North and South Carolina have opted out of forming an exchange, so individuals will participate in their federal exchanges for coverage to take effect as of January 2014.
The HHS will soon release the package of essential benefits required of insurance carriers to offer individuals through the exchanges. Among the choices will be coinsurance at 60, 70, 80 and 90 percent levels.
We want to be helpful to you in complying with the implementation of the new laws and regulations and choosing your appropriate options. We are planning content for upcoming issues and would welcome hearing about your questions and concerns. We are assembling resources and experts who are knowledgeable and thoughtful to deliver you comprehensive information on your options.
The Affordable Care Act is not a finished product. It will undergo many changes, amendments and improvements over the next several years. We must act to address care from the direction of access, coverage, quality and cost so that we can continue to succeed as individuals and as a nation.
I invite your input, feedback, recommendations, questions, concerns, thoughts and ideas. Please email me at email@example.com or call me at 704-676-5850 x102.
On March 23, 2010, President Obama signed into law the Affordable Care Act (ACA). On June 28, 2012, the United States Supreme Court ruled 5 to 4 that the law was constitutional, “permissible under Congress’s taxing authority.” In that ruling, the Supreme Court struck down the ability of the federal government to withhold Medicaid funds from states choosing not to participate in the ACA.
The most important element of the ACA is the individual requirement to obtain health care coverage which does not take full effect until 2014. In preparation to implement that requirement, states all across the country have begun choosing to participate or not participate in the ACA by setting up health care exchanges and expanding Medicaid funding to the uninsured.
As of February 26, 2013, 23 states and the District of Columbia have chosen to participate, three states are leaning towards participation, 13 states have decided to not participate, five states are leaning in the direction of not participating, and eight states are undecided. The map below indicates where the states stand at that date.
On February 12, 2013, Governor McCrory announced that the North Carolina Medicaid program was broken and that North Carolina was not prepared to participate in an expansion of Medicaid. He indicated that more study was necessary before any actions would be taken. In stating his opposition to the expansion of Medicaid, one of the factors Governor McCrory cited was a projected increase of $830 million in costs associated with that expansion over six years.
While that projected estimate may be accurate, there is ample evidence that those costs would be outpaced by cost savings from the reduction of uncompensated medical care that has been projected to reach between $1 and $2 billion between 2014 and 2019. Furthermore, having fewer uninsured residents and an overall healthier population will also affect costs.
Had North Carolina chosen to participate in the ACA, it was estimated by the Budget and Tax Center that the expansion of Medicaid alone would extend coverage to 488,867 uninsured citizens in 2014, out of the approximately 1,300,000 uninsured in this state.
Current law provides that states provide roughly 35 percent of the cost of those covered under Medicaid. Under the Affordable Care Act, the federal government will pay for 100 percent of newly eligible beneficiaries through 2019 and 90 percent thereafter. The additional cost to North Carolina is likely to be about $70.5 million in 2014 due to greater enrollment by those who are currently eligible under existing programs.
Fully $5.1 billion in new federal spending on health care would follow the Medicaid expansion under the ACA to North Carolina. Most of that funding would go directly to health care providers to pay for medical care. Over the six years from 2014 to 2019, the expansion of Medicaid would cost $16.3 billion with $15.5 billion coming from the federal government or 94.9 percent, while the state would contribute 5.1 percent or the $830 million.
It is important to know that people go to our health care system every day and they get care, and if they can’t afford it, they still get care but it is uncompensated care. Uncompensated care actually gets passed along to those who can pay. It’s called cost shifting and it’s been happening for a very long time…over 30 years.
This cost shifting has found its way into the base rates of health insurance for small businesses all across the country. That cost is shifted to a shrinking group of people (business owners) who struggle to pay for their own health insurance coverage.
As the Budget and Tax Center points out, “Having roughly one in five Americans uninsured is a drain on the American workforce and the American economy. The Medicaid expansion directly addresses this problem by extending insurance coverage to nearly 17 million Americans, more than half a million of whom live in North Carolina.”
Implementing the Medicaid expansion quickly, effectively and responsibly will not only improve the lives of hundreds of thousands of struggling North Carolinians through greater access to coordinated care, it will also save the state, and its taxpayers—including business owners, millions of dollars in the process.
Over the last 30 years, we have witnessed the population of the greater Charlotte region grow rapidly. In 1980, the city of Charlotte had about 315,000 residents. According to the 2010 census, the city grew to over 730,000. In 2012, the Charlotte Chamber pegged the population at approximately 772,000.
The larger Charlotte region, known as the Charlotte-Gastonia-Rock Hill MSA, had a population of 1,830,400 in 2012. By 2042, it is projected that this region will grow to be over 3,000,000, a 64.7 percent increase.
There is no doubt that the next 30 years will be much different from the last 30 years. Global economic competition will continue to cause money and jobs to move from country to country seeking lower costs and greater returns. To phrase it in some commonly used monikers, our U.S. economy has already transitioned from the Agricultural Age to the Manufacturing Age, and more recently to the Information Age.
Looking forward, we have moved into the Conceptual Age where creativity, innovation and design skills build on the Information Age and steer us to advanced and automated manufacturing and technology. Looking deeper into the future, we can expect that the Conceptual Age will develop into the Knowledge Age.
How do we get ready for more change? We set our sights on the future!
The Knowledge Age is a new, advanced form of capitalism in which knowledge and ideas are the main source of economic growth, more important than land, labor, money or other tangible resources. New patterns of work and new business practices are developing, and, as a result, new kinds of workers with new and different skills are required.
What is especially important to grasp is that the very meaning of “knowledge” is changing. Knowledge is no longer being thought of as ‘stuff’ that is developed (and stored) in the minds of experts, represented in books, and classified into disciplines. Instead, it is now thought of as almost a form of energy, as a system of networks and flows—something that does things, or makes things happen. Knowledge Age “knowledge” is defined—and valued—not for what it is, but for what it can do.
Each new age has major implications for Charlotte, but more especially for our education systems at all levels. This new Knowledge Age is fueled by an educated and diverse population base. The latest census report identifies that 36 percent of Charlotte citizens have graduated from college. In Raleigh, that number climbs to nearly 45 percent. The concentration of higher numbers of graduates will support more jobs and wealth creation. Expanding the percentage of graduates is one measurement tool to determine our progress.
Learning how Charlotte can aggressively compete in the global economy will provide the basis for economic progress for years to come. When New Orleans was rebuilding after Hurricane Katrina, they chose to be service-focused. Other cities have chosen to target manufacturing, distribution or technology. Charlotte has been known as a banking center with a focus on finance, but is also recognized for energy. Regardless, over the long term, it is imperative that educational advancements become a key component of any economic strategy for success in the Knowledge Age.
Building a community consensus around knowledge-based objectives can be tough and challenging. Nevertheless, higher wages and greater wealth will be concentrated in knowledge-based communities. These communities targeting business growth and economic development will reap substantial rewards. They will be the centers for advancements and innovations. Thinking and adapting and innovating are essential to the future creation of wealth and jobs.
Implementation of knowledge-based initiatives is a growing worldwide trend as countries plan to be more competitive and gain greater advantage in the global marketplace. The Science Ministry in Great Britain is fashioning government investments in higher education to support technologies closer to commercialization. The Chinese government is investing heavily in higher education to expand beyond low-skilled manufacturing.
Charlotte will lose out and fall backwards if it does not focus on higher education as a primary community objective. We are fortunate to have the UNC system, Charlotte Research Institute, Duke, Queens, Winthrop, Wingate, Davidson, Wake Forest, Northeastern, Johnson C. Smith, Gardner-Webb, Johnson & Wales, and CPCC expanding their facilities, capacities and specialties in support of our region. Greater engagement with them will open many opportunities to benefit our children and their children with big payoffs for years to come.