7. Corporations Promote HMO Model for School Districts

by Project Censored
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For decades, public schools have purchased innumerable products and services from private companies-from textbooks to bus transportation. Within the last decade, however, privatization has taken on a whole new meaning. Proponents of privatized education are now interested in taking over entire school districts. “Education today, like healthcare 30 years ago, is a vast, highly localized industry ripe for change,” says Mary Tanner, managing director of Lehman Brothers, “The emergence of HMOs and hospital management companies created enormous opportunities for investors. We believe the same pattern will occur in education.” So while the aptly named Educational Management Organizations (EMO’s) are being promoted as the new answer to impoverished school districts and dilapidated classrooms, the real emphasis is on investment returns rather than student welfare and educational development.

According to some analysts, Bush’s proposal for national standardized testing is helping to pave the way for these EMOs. Bush wants yearly standardized testing in reading and math for every student in the country between the third and eighth grades. “School districts and states that do well will be rewarded,” Bush states in his education agenda, No Child Left Behind, “Failure will be sanctioned.” The effect of Bush’s testing plan will be nothing less than a total reconstruction of curriculum and instruction across the country. Perversely, schools with already limited resources, serving poor and minority communities, will be those under the greatest pressure to boost scores or face loss of funding.

Additionally, standardized testing funnels public dollars directly to non-public schools, including religious schools, through taxpayer-supported vouchers. School vouchers, proposed by Bush in his education plan to increase federal education spending, will reward schools that do well on annual standardized tests. Vouchers shunt kids out of the public school system and into private for-profit institutions. Since only public school students take the standardized tests, kids whose parents can afford private schools don’t have to agonize year after year about potential failure.

Standardized testing hits immigrant students especially hard. Bush wants to freeze funding in 2002, despite surging enrollment of students speaking limited English. Angelo Amador, a national policy analyst for the Mexican American Legal Defense and Education Fund, says, “With the pulling of bilingual education funding, states with high-stakes testing are pushing low-performing Latino students into special education classes or out of school altogether in an effort to keep their test scores high.”

Critics charge that standardization’s real goal is not to improve public education but to disparage it while building support for privatized, union-free alternatives. Proponents of corporate-run education claim that, by cutting the “fat” out of the system, they can improve student achievement with the same amount of money, and still turn a profit (Ignoring the fact that the U.S. is ranked ninth globally in terms of money spent on education). The reality is that, though most EMOs have yet to show investors a profit, they generally cut teacher salaries, eliminate remedial, special, and bilingual education programs (mandated for public schools), and consistently perform at or below the level of surrounding schools in test scores.

Privatization opponents say that public education should serve and be run by the public, especially teachers and parents, as opposed to shareholders who run the for-profit companies.

UPDATE BY AUTHOR BARBARA MINER: Public education routinely ranks as a leading concern of the American public -understandably so, for providing a free, quality public education to all children is one of the hallmarks, and unfulfilled responsibilities, of our democracy. And as in so many of our social services, public education provides far different opportunities for children from affluent suburbs than for children from overwhelmingly poor urban districts serving predominantly students of color.

There is no “silver bullet” to improving low-income public schools. Yet the business community, backed by powerful political interests, has tended to seize on the quick fix of treating public schools as little more than another business venture needing market discipline. The epitome of this approach has found expression in “for-profit” education management companies such as Edison Schools, which seek to make profits for their shareholders by operating public schools and squeezing dollars out of already underfunded budgets.

Across the country, underperforming districts have been under intense pressure to succumb to for-profit management, taking needed time and attention from more promising but less lucrative- solutions such as smaller classes, improved teacher training, and adequate school funding.
The Wall Street investment community, prone to simplistic stereotypes of bloated bureaucracies running our urban schools, saw a chance to make profits off our public schools. Yet those involved in the daily life of public education know there is only one sure way to make money from public education: either reduce the salaries of teachers and staff or reduce the services offered. There is little “fat” in urban public school budgets.

When Edison claimed it could provide more services, offer a longer school year, and still make a profit, educators were understandably dubious. The investment community, willing to look the other way at questionable business promises, touted Edison’s potential for years.

And then the bubble burst. In the months following the Enron debacle, weary investors decided to take a hard look at Edison’s finances and broken promises. They were forced to acknowledge that Edison had never made a dime of profit and was unlikely to do so at any point in the foreseeable future. Edison’s stock, which had stood at around $20 a share at the year’s beginning, tumbled by late May to $1.30 a share.

As is often the case with pack journalism, the media suddenly “discovered” Edison’s many problems – although educators and alternative publications had been sounding warnings for years. The mainstream media was forced to play catch-up and print information long available through the alternative media.

As a publicly traded company, many of Edison’s finances are available to the public. As a start, do a search through the web for Edison Schools. Yahoo’s finance section is one of many places to start (search under EDSN). And there are a number of education activists with background on Edison, ranging from Rethinking Schools (http://www.rethinkingschools.org), to Philadelphia Public School Notebook (e-mail: psnotebook@aol.com), to Parents Advocating School Accountability (http://www.pasasf.org).

UPDATE BY AUTHOR FROSTY TROY: I am saddened to report that since “A Confederacy of Dunces” first appeared, public education’s critics have been goaded to even more extreme criticism by the Bush victory, especially on talk radio and the editorial pages of America’s mostly conservative newspapers. (I search in vain for a so-called liberal press.)

I fear for the future of my country in which a third of the public school buildings are unsafe (GAO report), where a third of the math teachers and 40 percent of history teachers have neither a major nor minor in the subject they are teaching.
Popular radio evangelist James Dobson has called for the closing of California public schools. “Doctor” Laura seconded the motion on her radio show but said it should include the entire public school system.

Bush Education Secretary Rod Paige calls for vouchers despite their utter failure to address children in poverty. Consider the scandal in St. Petersburg, Florida, where the Times reports six voucher schools are havens of abuse, corruption, and kids who have faced as many as seven teachers in seven months for as little as $10.50 an hour.

The president’s “Leave No Child Behind” program leaves thousands behind-eliminating after-school programs, and the teacher education program, and fails by $9 billion to fully fund special education.

I won’t stop writing on this subject and speaking out across the nation despite the gloomy outlook. I am galvanized by the certain knowledge that all America is or ever hopes to be can be found in her public school classrooms.

UPDATE BY AUTHOR DENNIS FOX: How we choose to educate our children is always important, so it’s not surprising that high-stakes tests attract significant attention. Downplaying profit motive as well as research exposing testing’s technical flaws, the corporate-owned media generally echo the corporate-initiated call for education reform using corporate-designed standards and tests. Despite occasional criticisms of implementation details, the media pay minimal attention to whether testing obscures rather than remedies underlying economic disparities between high- and low-achieving school districts, or whether the corporate interest lies not in expanding children’s skills and horizons but in channeling them into vacant spots in the future workforce’s lower realms.

President Bush’s “No Child Left Behind Act,” which passed overwhelmingly with the help of liberal Democrats, mandates annual testing for every public school child in the nation from third through eighth grade. The Bush plan has generated increased alternative press coverage of state and federal testing issues, including some proponents’ financial interests in testing companies and/or private schools, Bush’s close family ties to the major testing company McGraw-Hill, and the role of organizations like the Business Roundtable. Similar reports sometimes appear in mainstream media, though there the connections between corporate elites and state decision-makers are often ignored or dismissed as evidence of business’s pro-education savvy.

Despite increased coverage, it’s important to remember that the bipartisan corporate-directed testing boom began long before Bush. If there’s an underlying plot, it’s corporate, not Republican or conservative. Too many liberals still believe testing is merely part of a well-intentioned plan gone wrong.

Encouragingly, test opponents from both left and right have scored scattered victories in a number of states, delaying test consequences through strategies ranging from lobbying to boycotting. It remains to be seen if this movement withstands the new federal mandate.

A related issue, just beginning to surface, is President Bush’s second education plan: requiring states to beef up civics education. This return-to-the-Fifties effort will attract corporate support as well as mainstream media pundits who bemoan the dropping voter rolls even as they dismiss calls for significant electoral reform that might provide some reason to show up at the polls.

There was no mainstream media response to my story, though I used an earlier version as one of my regular columns in the weekly Brookline TAB. A handful of alternative media outlets ran it.


Dennis Fox — my website includes coverage of Massachusetts test opposition and corporate issues; links to groups and resources

FairTest — A primary national anti-testing organization

Multi-National Monitor
January/February 2002
Title: “Business Goes to School: The For-Profit Corporate Drive to Run Public Schools”
Author: Barbara Miner

The Progressive Populist
November 15, 2000
Title: “Dunces of Public Education Reform”
Author: Frosty Troy

North Coast Xpress
Winter 2000
Title: “Corporate-Sponsored Tests Aim to Standardize Our Kids”
Author: Dennis Fox

In These Times
June 2001
Title: “Testing, Testing: The Miseducation of George W. Bush”
Author: Linda Lutton

Faculty Evaluators: Perry Marker, Tom Ormond, and Elaine Sundberg
Student Researchers: Lauren Fox, Derek Fieldsoe, Joshua Travers