David Osborne, Peter Hutchinson
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Customer Reviews:
Total reviews: 12
Average rating: 4.0 of 5
Sounds Good, but Won't Work! 2 out of 5 stars.
5 of 9 people found this review helpful.
The timing for this book couldn't be better - an era of skyrocketing deficits, an aging population (boosting pension outlays), inexorable increases in healthcare costs (fewer workers with health insurance, aging population), and businesses increasingly threatening to move elsewhere unless they receive tax relief.
Simply cutting budgets accomplishes little - as Osborne points out, it does nothing to improve areas retained. In addition, service recipients or proponents (usually providers) simply complain ad naseum until an opportunity to restore funding occurs (eg. tax increase or economic upturn) presents itself - thus setting the stage for the next crisis.
Osborne is also correct in pointing out that the most common budget "cures" are simply illusions - accounting gimmicks (timing "games" regarding outlays and receipts, fudging estimates, temporarily ignoring voter mandates), borrowing, and delaying maintenance.
At this point, however, Osborne goes off the track by proposing some intelligent-sounding changes in approach (eg. identify the results wanted), and proceeds to go through a lot of razzle-dazzle that simply ends up with "business as usual."
Using Washington state as an example, Osborne cites how a citizens group decided to focus on providing more early-childhood-education and implementing skill-based pay for teachers - neither a "REAL" result. During the last 30+ years innumerable education "improvement" programs have been funded, while progress has been non-existent - eg. scores by 17-year-olds on the National Assessment of Education Progress (the only unchanged large-scale test in the nation) have remained unchanged, as have drop-out rates. This, despite a more than doubling of inflation-adjusted per-pupil spending in the last 30 or so years. As for "skill-based" teacher pay, study after study has found that - after taking into account pupil differences - payment for EXISTING "skill-set" programs (teacher experience or degree levels) contribute little (only the first few years of experience) or nothing to pupil achievement. So why add another dubious dimension? If one needs any more evidence, consider the fact that most private schools only cost about half that of public schools.
Universities are another major State-level expenditure; like K-12 education, MAJOR overhaul (not rethinking budgets)is required. Since the early 1990's, professors' teaching workloads have been reduced from three classes per semester to two. Nationally, and undoubtedly in Washington also, the length of the academic year shrunk from 191 days in 1964 to only 156 in 1993. Meanwhile, only 21 cents of every funding dollar goes into the classroom - the number of non-teaching professionals (eg. counselors) has increased from 3 per instructor in 1976 to 6 in 2001. Returning to those recent productivity levels, substantially reducing admissions of the roughly half unable or unmotivated to graduate, and shortening the average 5+ years required to graduate would allow savings of about $500+ million/year in Arizona and it is assumed that similar opportunities exist in Washington.
As for healthcare, Osborne's Washington process suggested dropping coverage for low-income workers - an ACCOUNTING GIMMICK that simply transfers the costs to providers, and adding more clinics. However, what is really required is a review of incentives and other care drivers - eg. the highest-spending areas in the U.S. spend about 60% more on Medicare recipients than the lowest, despite access to care and patient outcomes being better in the low-income areas. A second problem is that healthcare providers are REWARDED for their errors - payors need to insist on adherence to quality standards. A third major problem is that care recipients have no incentives to conserve - Health Savings Accounts (allowing cashing out of any funds remaining from a set amount) do so.
Clearly Osborne's work would be more useful if it focused on outcomes - both good and bad. Associated with that should also be a discussion of benchmarking (staffing levels, compensation for staff, and benefit levels), and continuous improvement goal-setting that emphasize reducing waste and improving quality "Toyota-style" - keys to success in the private sector.
The "bottom-line" is that the focus should not be on the budget process, but on permanent reform of the biggest consumers of government funds - education and healthcare.
Editorial Review:
Government is broke. The 2004 federal deficit is the highest in U.S. history. The states have suffered three years of record shortfalls. Cities, counties, and school districts are laying off policemen and teachers, closing schools, and cutting services. But the fiscal pain won’t go away, and the bankrupt ideologies of left and right offer little guidance.The Price of Government presents a radically different approach to budgeting—one that focuses on buying results for citizens rather than cutting or adding to last year’s spending programs. It advocates consolidation, competition, customer choice, and a relentless focus on results to save millions while improving public services.
