This proposal is one of ten winning reports from the 1994 Oregon Better Government Competition. The 1994 and 1996 Competitions were organized by the Portland-based Cascade Policy Institute. Opinions expressed are those of the author(s) and not necessarily those of Cascade staff or advisors, nor should they be construed as an attempt by Cascade Policy Institute to influence any election or legislation.
by Janet R. Beales
The Reason Foundation
Los Angeles, CA
EXECUTIVE SUMMARY
Across the state, schools and communities are looking at new ways of delivering education to students. One option Oregon schools may wish to explore is contracting with a private-practice teacher for instruction.
Private-practice teachers are professional educators who provide their services to schools, or other entities, on a limited contract basis. Contracting with a private-practice educator can help school administrators strengthen accountability, cut costs, and increase flexibility. Using contracting, schools can also take advantage of outside expertise and innovation.
In turn, the contract arrangement elevates the professional status of teachers. Contracting with a private practice teacher requires school administrators to deal with educators on a professional rather than an employee, basis. Private practice enables teachers to take control of their own careers, negotiate their own compensation, and make their own decisions about how to use time, resources, and methodologies.
Most teachers graduating from education schools do not have the variety of professional opportunities available to them as do graduates of other disciplines. Nor are they offered the same kinds of opportunities for career growth. Private practice changes that by broadening career options for teachers.
This study profiles the experiences of a number of private-practice educators around the country, and discusses the benefits to schools of contracting for instruction. In addition, this study presents results from two national surveys about the legal authority of school boards to contract for instruction, and also provides a chart to help administrators identify the fully allocated costs of in-house and contract service.
ABOUT THE AUTHOR
Janet R. Beales is a policy analyst with the Education Studies Program of the
Reason-Foundation.
Before earning her M.B.A. at the University of Washington, Ms. Beales was assistant editor
for the
Fortune Encyclopedia of Economics, and a project manager at the National Chamber
Foundation in
Washington, D.C.
1. INTRODUCTION
A. Background
Across the nation, schools and communities are looking at new ways of delivering education to students. Charter-school legislation, which enables public schools to innovate free from many state and local regulations, has been passed by eleven states, and a number of Oregon legislators are considering the idea.(1) Districts in at least five states have contracted with private, for- profit companies to manage their public schools. And a handful of public schools are experimenting with distance learning where a computer network links teachers to students who study in their homes.
This willingness to look for innovative solutions to the educational challenges of the 21st Century comes just at a time when many states, including Oregon, are also facing budgetary shortfalls. Not only do these reforms hold out the promise of a better education system for the next generation of school children, they may also help alleviate the budgetary crunch that many school districts are experiencing.
Although the average Oregon teacher salary has increased an inflation-adjusted 2.5 percent
to
$37,589, since passage of Measure 5 in the 1990-91 school year, and total state-school
spending has
climbed an inflation- adjusted four percent during that same period, most school districts are
now
being forced to tighten their belts.(2) Some school districts are responding by cutting back on
their
budgets, freezing salaries, and reducing student services. Others are clamoring for a tax
increase.
Oregon Public Schools At A Glance
Students 541,600
Teachers 26,488
Schools 1,170
School Districts 250*
Annual Operating Budget $2.5 Billion
*By 1996-97, state-mandated consolidation will
have
resulted in 175 school districts total.
With a little creativity, and a willingness to break from convention, there may be another way to conserve resources without compromising services. Increasingly, school districts are turning to the efficiencies of the private sector for everything from busing and food service to curriculum design and school management.(3) By contracting with the private sector, many school administrators have realized substantial cost savings and quality improvements.
But contracting need not be limited to administrative and ancillary services. A few schools are applying the concept to instruction, as well. Not only has the arrangement transformed the delivery of education services in these schools, it has also spawned a new profession for educators known as "private-practice teaching." This report describes the concept of private-practice teaching, profiles teachers in private practice, and describes the potential benefits of private practice to Oregon schools, students, and educators.
B. What is Private-Practice Teaching?
Private-practice teachers are professional educators who provide their services to schools
or other
organizations on a contract basis. It is often said that all children are unique, that a
one-sizefits-all
approach doesn't work very well for students. Nor does it work well for teachers. Most
teachers
graduating from education schools are limited to a lifetime of public employment.(4) They are
not
offered the variety of professional opportunities available to graduates of other disciplines. Nor
are
they offered the same kinds of opportunities for career growth. Private practice changes that
by
broadening career options for teachers.
Instead of becoming an employee of the district subject to all its rules and ' regulations,
teachers can
be self- employed or_emp~oyed by a private business. They can contract with schools or
parents to
provide instructional services to students. Some teachers.in private practice tutor students on
a
parent-pay basis; others contract with schools or school districts to provide specialized
instruction
in remedial education, science, or foreign language. Still others use private practice to tap the
market
for adult education, teacher training, or employee education.
Teacher, Inc.
Private practice opens up new opportunities for teachers. It provides greater choices for teachers who don't want to leave the classroom in order to grow professionally. Private practice is not for the risk
adverse. In exchange for entrepreneurial freedom, private-practice educators forego the safety net of district employment and the protection that tenure and collective bargaining often afford.
But for many educators, the chance to chart their own course is worth the risk. For those teachers who are frustrated with status-quo employment opportunities,who want to drive their own careers, or who have a good idea and want to market it, private practice offers the means to do so.
C. What Can Policy Makers Do to Enhance Private-Practice Options?
To encourage private-practice teaching and contract arrangements between public schools and private-practice educators, state policy makers should consider the following recommendations.
* Legislative authority of school boards to contract with a private-practice educator for any type of
instructional services is unclear at present. Statutory language authorizing school boards, or some other school governing authority, to contract for instruction would clarify this issue.
* Individual schools that could benefit from contracting with a private-practice educator may be prevented from doing so by their school district. Charter- school legislation, designed to give broad decision- making authority to individual schools, could enhance opportunities for local schools to contract for instruction.
* In many cases, private-practice educators are licensed by the state in which they provide instruction. However, in some cases, otherwise qualified educators lack the required license to teach in the public schools. Alternative certification policies or waivers to existing certification requirements should be made available in such situations.
Case Study #1
Learning Styles
Springfield, Massachusetts
As a special-education teacher, Susan Fino is used to challenges. So when she decided to leave district employment and go into business for herself in 1986, she took the risks of entrepreneurship in stride. "I knew that the harder I worked, the more likely I was to see success," says Fino.(5)
Fino provides consulting and teaching services to eight public-school districts in the Springfield, Massachusetts area. "I was really drawn to strategies for finding ways to make a child successful in the classroom. Typically, in the public schools as special- education teachers, we taught and supported subjects like math and reading, but I wanted to teach children how to learn, not just what to learn," says Fino. Fino works with a student and the student's classroom teacher to put together a learning program that is specifically suited to that student.
By contracting, schools are able to tap the expertise of Fino when and where they need her. That kind of flexibility enables schools to match their special-education programs to the students who use them. And in some cases, Fino helps schools avoid the more costly alternative of private placement for the most difficult to educate students.
"We have many students going to private schools paid by the school district because the school district doesn't have the programs to serve kids. It's very expensive. Many times parents will bring up my name instead and the school district will agree because they've worked with me before, and I cost a lot less than private placement," which averages $19,000 per special- education student annually, says Fino. When the school districts contract with Learning Styles, the hourly cost averages $30 per student for two-on-one instruction.
Despite the benefits she brings to the schools, Fino says institutional resistance to the idea of private-practice teaching is widespread.
"I keep a low profile [as a teacher in private practice]. I - would rup up against opposition from teachers' otherwise. They don't think of me as someone in business for myself, they see me as helping teachers solve whatever problems they happen to have."
Fino, who shares an office with her psychologist husband, started the business with a $12,000 loan that she used to purchase equipment and create a brochure. Today, Fino nets revenues comparable to an experienced public school teacher. Roughly half her revenues come from school districts; the remainder comes from parents who hire her to work with their learning-disabled children on an hourly basis.
Being in business for herself, Fino finds herself responding to certain incentives that were absent when she was employed by the district. "I have a great incentive to know what's going on in education. People are going to call on me for the information they don't have in the public schools. I have the ability to get it and the incentive. Because if I'm first with the information, I'll get the business." Moreover, her independence enables her to attend conferences, workshops, and trade shows that enhance her professional development and her skills as a teacher. As a public-school teacher, those kinds of professional opportunities had been largely unavailable, says Fino.
"In the public schools, it's difficult to go to conferences and especially to get materials, such as computers and computer programs. Even though its coming out of my own pocket, I know I need those materials in order to survive. These are what make me able to serve teachers and kids."
II. ENTREPRENEURIAL EDUCATORS
Private-practice teachers come in all shapes and sizes. Some provide instruction one student at a time, others teach entire classrooms. Some of these educators run their own business, taking on the dual responsibilities of teacher and business manager. Others want to focus strictly on teaching by working for an established education company an option that poses less risk and fewer entrepreneurial headaches.
The common thread linking these educators is their enthusiasm for teaching, learning, and helping children. What sets them apart from other teachers is their willingness to assume risk, their desire for independence, and their ability to meet the demands of the education marketplace. Private-practice teaching is an option that lets teachers exercise their entrepreneurial talents. (See Case Study #1)
In 1990, the American Association of Educators in Private Practice (AAEPP) was founded by a small group of enterprising educators in Wisconsin to network and support other like-minded teachers. The association now has over 250 members and has become the recognized authority on private practice. Chris Yelich, one of the founders of AAEPP and the president of Science Capsules, a private-practice science-education company, hopes to change the way teachers think about their careers.
"Why is the idea of private practice so foreign in the field of education? If you mention private practice to college students preparing for any other profession, you will find that many are interested in going into business for themselves.... But mention this concept to students in a school of education and they will look at you with a blank stare."(6)
III. WHAT CAN PRIVATE PRACTICE BRING TO OREGON SCHOOLS?
Contracting for instruction offers a number of potential benefits to public schools in Oregon.
A. Accountability
Chief among the benefits of private-practice is the accountability the contract arrangement provides to schools. The contract is an agreement between the private-practice educator and the school or school board to provide a certain service. The contract specifies what will be provided, in what amount, by whom, and under what circumstances. Such an agreement can be terminated at any time, usually without cause, or it can be renewed if the arrangement is satisfactory for all parties involved.
Private-practice educators who do a good job teaching students will likely have their contracts renewed, or find themselves in demand with more schools.-Those that fail to-deliver will have their contracts canceled, or unrenewed. With proper monitoring and a carefully designed contract, such a system protects the school and students alike by retaining the best educators, and forcing the worst out of business. (See Case Studies #2 and #6.)
Case Study #2
Science Encounters
Bethesda, Maryland
When Robin Gross started Science Encounters in 1983, she did so for one reason. "All I wanted to do was to teach science. Since no single elementary school could hire me full time, I had to find another way. I decided to focus all my energy on teaching science and became a science specialist, which meant I had to go into practice for myself," she says.
Today, Gross does much more than teach science. As president and founder of Science Encounters, she employs 20 full and part-time teachers who provide hands-on learning programs to private and public elementary schools in Washington, D.C., Virginia, and Maryland. Science Encounters, in co-operation with another company called Discovering Science, started by one of Gross's former employees, also operates a science oriented summer camp, after-school programs, and uses science to entertain children at birthday parties.
Science Encounters provides teacher-training workshops to improve the ability of regular classroom teachers to engage children in science. The company has trained teachers in the Washington, D.C. public schools under district contract.
Says Gross, the most rewarding part of her job is "seeing the utter delight of children building a bridge in our architecture class, or mixing chemicals together and watching the colors change and learning about chemical reactions."
As an educator with limited business experience, Gross sought out the expertise of a business development consultant to help get Science Encounters off the ground. "I was very scared [about running the business]. And I was wise enough to know that I was ignorant in a lot of areas."
Some of the skills Gross learned from the consultant were how to run a staff meeting and supervise her employees, how to screen potential employees, and how to price her services.
"I have always spent a lot of money on accountants, lawyers, and consultants. I feel like it is money well spent, because I can't do this alone. I've found people I can trust and I've gotten good advice that's worth a lot of money. It's helped me feel like I'm doing this carefully and making good decisions," says Gross.
Gross is keenly aware of the accountability involved as a private-practice educator. "Every day is a risk. The greatest risk is having my name and reputation hanging out in the world every day. I am totally accountable. If someone is upset about a class or a teacher-training session or camp, they know who to call, and it's me. There's no place to hide."
During the decade Gross has operated the company, a lot has changed for Science Encounters. The company reorganized as a partnership, expanded, obtained trademarks, and is now pursuing contracts to teach science at the public schools.
A lot has changed for Robin Gross too. When she started the business, she was single. Now she has a family and is raising two young children. Being her own boss is more important to Gross than ever before.
"I have tremendous freedom. I set my own schedule. I'm able to be home with my
children when
they're sick, or bring them to my office. Even though things have been tough financially,
certainly
in the beginning, there's a lot to be said for having the flexibility I have. I'll never trade the
benefit
of having the freedom to run my life."
Says Gross, " I just feel lucky and blessed that I get to work with curious, fascinated,
and fascinating
kids every day and earn money doing what I love."
B. Enrichment
Schools with limited resources can use the contract option to provide their students with instruction in subjects that may not otherwise be available at the school. SGience labs, music classes, and remedial tutoring are examples of the kinds of instruction private-practice educators can provide. Schools facing cutbacks may wish~to consider contracting with private- practice educators in order to provide students a broad offering of programs without incurring the cost of hiring fulltime personnel.
Private-practice educators can also be a source of alternative methodologies and teaching techniques in core subjects. For example, the Math Enrichment Resource Center (MERC) uses a non traditional approach to teaching elementary mathematics at a school in the St. Paul [Minnesota] School District. (See Case Study #3.) Similarly, Sylvan Learning Centers uses a proprietary curriculum and a specially designed classroom to teach remedial reading and math.
Whether teaching enrichment courses or core subjects, private-practice educators offer more options to school administrators looking to provide the best instructional program possible on a limited budget.
Case Study #3
Math Enrichment Resource Center (MERC)
St. Paul, Minnesota
Bob Hazen is used to the puzzled stares he gets when he tells people he teaches algebra and calculus to six-year- olds. As a private-practice educator, Hazen uses a methodology called Mortensen Math, which incorporates music, colored blocks, and higher concepts like algebra and calculus to teach elementary mathematics in a way that is fun and easy to grasp.
Hazen first came across Mortensen Math in 1989 when he received a flyer in his school mailbox promoting an upcoming seminar on the method. Intrigued by the claims the company made about teaching advanced mathematical concepts to young children, Hazen brought his own five-year old son to the Saturday seminar hoping some of Mortensen Math's teaching methods would be demonstrated.
"Sure enough, Jerry Mortensen was the presenter and 45 minutes later, [my son] Brandon was doing algebraic factoring. I was so impressed, I purchased the materials myself and began using them in my classroom." (7)
Soon after, Hazen, who also teaches junior-high school math full-time in the St. Paul public schools, turned his enthusiasm for the methodology into a business. He established the Math Enrichment Resource Center (MERC) to provide teacher training and student instruction using Mortensen Math on a contract basis.
Through MERC, Hazen has provided services under contract to private schools, home-schooling parent groups, charter schools, and community centers in the Twin Cities area. Under a pilot project with the St. Paul Public Schools, Hazen directed a year-long mathematics program at the Chelsea Heights Elementary School. There, he provided both instruction and teacher training for two first-grade classrooms. Funding for the project was provided for one year by a private donor. Hazen hopes to raise additional funds to continue the work at Chelsea.
"There's a growing awareness in my field of mathematics education that what we're doing isn't good enough. It's a real exciting time to be a math teacher; there's an openness to trying new things that have shown to be effective," says Hazen.
"One appeal of private practice is having more control over what I'm doing. I can spend my time dealing with issues and concerns that make a difference, to provide people with the tools and training that I know are going to help them succeed. I don't always feel that way with the current situation I'm in."
Hazen describes many of the students he works with as having been "contaminated with bad ideas and bad methods about what math is." As a result, he sees students and teachers who are afraid of numbers, who are reluctant to tackle mathematical problems.
At the secondary-school level, says Hazen, I'm getting them six or seven years after they've been contaminated. What I'm so excited about is getting them right in the beginning, by going down into the first grade, whether I'm dealing with students or teacher training. I think the timing is right to elevate and broaden how elementary math is taught while still achieving a mastery of basic arithmetic.
C. Cost Savings
Contracting with a private-practice educator can be a more cost-effective way of providing instructional services for a number of reasons.
1. Competition
In private-practice teaching, there is no job security, there is no tenure, there is no
collective
bargaining. The way educators in private practice stay in business is to deliver a better product
at a
better price than their competitors. Competitors include not just other private- practice
educators,
but also the programs operated by the schools, for a school is unlikely to turn to contracting
if it is
satisfied with its in-house program.
The beneficiaries of this kind of competition are the schools and students themselves. Because the private-practice educator must compete to win the business, he or she is under pressure to keep prices low and service- quality high.
2. Private-sector Efficiencies
Studies comparing the public and private sector find that the private sector generally tends to use resources - be they financial, human, or temporal - more efficiently. Researcher Louis De Alessi, Ph.D., compared the operations of the public and private sectors for various industries and found that the private sector was generally more efficient than publicly operated organizations.(8) Says De Alessi, compared to the public sector, privatesector organizations tend to minimize the costs of providing a given service or product, are more likely to respond to consumer preferences, are quicker to adopt cost-saving innovations, spend less on facilities construction, and are more likely to compensate employees based on their individual performance.
In addition, private-sector compensation tends to be based on market-rates. Since the cost of labor is often lower in the private sector, overall efficiency is enhanced by using the private sector, particularly for labor-intensive organizations, such as education. A parallel comparison is the cost of teachers in public and private K-12 schools. The U.S. Department of Education reports that average-base salaries for private-school teachers are 37 percent lower than that of teachers in the private sector.(9)
According to a recent policy study, Oregon public-school teachers are paid above market wages. The average Oregon public-school teacher received $35,883 in salary (including employer contribution to PERS) during 1992-93, equivalent to a salary of $52,377 for a full- time (i.e. eight-hour day), year-round professional. By contrast, teachers in the state's private schools earn $15,000 to $30,000 with fewer benefits.(10)
The Illinois-based Ombudsman Educational Services provides a good example of privatesector efficiency. Providing education programs under contract with the public schools, Ombudsman serves, on any given day, roughly 2,000 at-risk students in seven states.
Administrators at Ombudsman are few, with just one administrator for every 400 students. By comparison, the Chicago Public Schools, one of the districts with whom Ombudsman contracts, has more than three times the proportion of administrators, employing one administrator for every 124 students.
Operating as it does in the private sector, Ombudsman has greater latitude when it comes to scheduling, curriculum, and instruction. Ombudsman focuses exclusively on core subjects such as math, English, and social-studies, providing students with an intensive course of study. Doing so keeps costs to a minimum. Its locations are modest too; most Ombudsman classrooms are located in store fronts or business parks.
Students attend the Ombudsman program for four hours a day, working at computers independently and at their own pace. Some students graduate from Ombudsman with a highschool diploma, other students use the program to catch up on their studies before making the transition back to a regular public-high school.
Teacher-staffing costs are also lower at Ombudsman. Compensation for Ombudsman teachers, as for teachers in private schools, is based on market rates, which tend to be lower than in the public sector. All Ombudsman teachers are licensed by the state in which they teach. Instead of paying more for instructors, school buildings, and administration, Ombudsman puts its focus on teaching. Student-teacher ratios in an Ombudsman classroom are no more than ten to one. With between eight and ten students per teacher, Ombudsman is able to give greater individualized attention to students.
The bottom line? Suc ' h efficiencies are passed along to the customer.,The cost to the public schools of enrolling a student in an Ombudsman program for a year (between $3,000 to $4,000) is about haff the cost of most district- operated programs for at-risk youth. Moreover, Ombudsman boasts a retention rate of 85 percent among this difficult-to-educate population.
3. Known Costs
In most cases, the cost of contracting with a private provider is straightforward.
Contractors may
charge an hourly rate or a program rate. In either case, all the costs of the contractor a re
boiled down
into a single rate or price. This includes, for example, the costs of benefits, insurance, supplies,
training, and transportation for the teacher-contractor.
Because the provider's cost is clear from the outset, school administrators work with more certainty in the budgeting and decision-making process when it comes to planning instructional programs.
Moreover, schools usually pay only for contact hours between the contractor and the student's Companies such as Ready Go, for example (see Case Study #4), base their fee schedule on an hourly basis. Under such a scenario, schools do not pay for "downtime" such as prep-periods, lunch and coffee breaks, and vacation periods, but only for the time the instructor(s) spends with students. In other words, schools pay only for the services they actually receive, and they know in advance exactly what those services will cost.
Case Study #4
Ready Go, Inc.
New Berlin, Wisconsin
For 25 years, Greg Genal taught and directed health and physical-education programs in the Waukesha,Wisconsin public schools. Although employment with the public schools provided him with the kind of financial security he wanted in order to raise a family, something was missing.
"I was not getting a lot of satisfaction in the public sector," says Genal.(11) "I would come up with a lot of different ideas, but I'd have to wait to take it to the [school] board or curriculum committee, and they'd just get lost in the bureaucracy. I still have good ideas, but now I have the freedom to execute them."
When his youngest son left for college, Genal and his wife, Diane, an accountant, decided
to set their
dreams in motion by founding Ready Go, Inc., a physical-education teaching business.
Ready Go now serves K-8 grade students in over 40 private schools and employs 12 full-time and two part- time teachers. The company provides certified instructors to teach physical education programs, using Ready Go's curriculum. The program stresses physical fitness, team building, and good sportsmanship. Ready Go also offers wellness programs for students and staff such as nutrition, First Aid, stress management, and drug prevention.
Most of the teachers Genal employs are either retired public-school teachers or recent graduates from
education schools in the Wisconsin area. Genal acknowledges that financial compensation is lower for both himself and his teachers compared with the public sector, but says that is one of the reasons Ready Go is a cost-effective alternative for schools.
In fact, before Genal approaches any potential client, he calculates the school's cost of operating its own in- house physical education program, and then prices Ready Go's at or under that amount. Schools contracting with Ready Go pay only for the teachers' contact time with the students. In addition, because the teachers are employees of Ready Go, the schools are not responsible for paying unemployment insurance, health insurance, retirement, and other benefits. Hourly rates for Ready Go programs typically range from $13 to $15 an hour.
Some schools regard Ready Go teachers so highly, they have hired them away from Genal. Even contract provisions designed to safeguard his investment in human capital have not been effective in stopping such "pirating," he says.
Yet despite the difficulties of small-business ownership, Genal finds the rewards are well worth the effort. Genal, who often team teaches with Ready Go instructors, says the main benefit of being a private-practice educator is the personal satisfaction he derives from seeing the results of his own work.
"I truly feel I am having an impact on children's learning. The physical fitness tests, the teaching, the curriculum were ' all set up by myself. All that we ask the children to do I am directly responsible for. I get a real sense of satisfaction from helping children to perform at their best," he says.
4. Stafting Levels
Schools may have greater flexibility in staffing using the contract option. A school district, for example, which expects enrollment to decline, can enter into short-term contracts with privatepractice educators until enrollment stabilizes. Schools can negotiate the contract terms, renewal provisions, and severability clauses that meet their particular enrollment or program needs. The school can contract for as little or as much servicetime required. Contracts can cover a period of several months or an entire year. And if the arrangement is a successful one for both parties, the contract can be renewed.
Schools may also wish to use the private-practice teaching option when the level of instruction needed is minimal, or so specialized, it applies only to a limited student population. For example, one public school in New Jersey turned to Berlitz Jr. to supply foreign-language instruction in Japanese to 60 students. Said school principal Karol Brancato, "What would we have done with a [full-time] Japanese teacher on staff the rest of the time? ... Contracting out is a real viable option for small programs." (12) (See Case Study #5.)
Case Study #5
Berlitz Jr.
Westport, Connecticut
Established in 1987 by Berlitz International, Inc. to provide foreign-language instruction and curriculum to schools, Berlitz Jr. now operates in over 13 states throughout the United States. Berlitz Jr. programs can be found in both public and private schools offering instruction to children in languages as varied as Japanese, Spanish, and Greek. Most Berlitz Jr. teachers are native-speakers of the language they teach.
Typically, a school will contract with Berlitz Jr. to provide instruction to several classrooms for two or three class periods a week. Through the contract arrangement, schools specify and pay for only the amount and type of instruction they need. For small schools or those with a small number of students desiring instruction in a particular language, this is an advantage of the contracting arrangement. Should the school wish to switch to another language at any time, it can easily do so without encountering the problems of teacher layoffs or recruitment.
Teachers have many different reasons for wanting to work for Berlitz rather than working as employees of a school or district. Some are working toward teacher credentials in their home states and Berlitz gives them practical classroom experience and coaching, others appreciate the scheduling flexibility Berlitz offers its employees, some enjoy the variety of jobs with different schools in a neighborhood, different age groups, or different education settings. Still others turn to Berlitz for the pleasure of teaching the language itself and sharing a country's heritage and culture with students.
Beatrice Mora-Diaz is one such teacher. A native of Columbia, she began teaching for Berlitz in 1992 in order to more fully share her culture with Americans. "I always think Americans have a false image of what people from Latin America are like," says Mora-Diaz who teaches both children and adults.(13) "We have a lot of interesting things Americans can get from us. I try to go further than just the language and encourage students to learn about our culture."
With three young children at home, Mora-Diaz schedules her work hours in a way that lets her spend the most time with her family. "I try to accommodate early morning or very late after dinner, or Saturday mornings because I have to take my children to their activities," she says. In any given week, Mora-Diaz may be teaching between eight and 30 hours for Berlitz. She also teaches at a college two nights a week on her own time.
When her children are older, Mora-Diaz plans to teach full-time. As a private-practice educator, she is able to teach in a variety of settings, something she says is helping her decide what kind of teaching career to eventually pursue. But for now, Mora-Diaz finds that private practice enables her to balance work and family life, and gives her the satisfaction of sharing her culture with others.
COST OF IN-HOUSE SERVICES VS. COST OF
CONTRACTED
SERVICES
Cost of In-House Services
Teacher Salary, Insurances and employee Benefits
School District's Annual Gross Payroll $1,000,000
Annual Insurances and Fringe Benefits Paid By District Social Security $75,000
Unemployment Compensation $30,000
Worker's Compensation $20,000
Health & Dental Insurance $190,000
Pension Contributions $50,000
Total Teacher Salary Insurances, and Employee Benefits $1,365,000
Productive Hours (1)
Total Classroom Hours Per Teacher Less: 1,100 Hours
Average Off-Time (Sick and Personal Days) of 2% (22) Hours
Total Productive Hours 1,078 Hours
Hourly Cost of In-House Services
Total Average Teacher Salary Plus Employee Benefits Divided By: $1,365,000/
Total Productive Hours Divided By: 1,078 Hours
Total Number of Teachers Employed By The District 35
Total Hourly Cost of In-House Services $36.18
Cost of Contracted Services (2)
Contractor's Hourly Rate for Contract Performance (1)
$25.00/Hour
District Savings
Hourly Cost of In-House Services Less: $36.18/Hour
Hourly Contractor's Rate $25.00/Hour
Total Hourly Savings (Loss) $11.18/Hour
Source: Gail Ostler, CPA
WHEN SHOULD THE SERVICES OF A PRIVATE-PRACTICE TEACHER BE OBTAINED?
School officials should ask themselves the following questions when thinking about how to provide a specific program of instruction. If the answer to one or more of the following questions is "yes," then the use of a privatepractice educator should be considered.
Does the program require the expertise of a specialist not readily available within the school district?
Does the school district lack staff who have been trained to implement the program curriculum or methodology desired?
Is the cost of purchasing services from a privatepractice educator lower than the cost of compensation and related expenses for a district employee?
Does the program require a high degree of flexibility in staffing or scheduling?
Will the instructional program be provided for a period of less than one academic year?
Will the program serve fewer students than a typical classroom?
Will the program be offered on a part-time basis?
Is a greater degree of accountability, through a contract arrangement, desired?
IV. COMPARING THE COST OF IN- HOUSE AND CONTRACTED SERVICES
Although cost is not the only factor in the decision of whether or not to contract for a given service, it is certainly a major one. Comparing the costs of using in- house versus contract providers is a difficult process. Most school-districts do not have an accounting process that enables them to easily identify the full costs associated with a particular service. In trying to identify total costs, administrators should ask themselves the following question:
If a school stops producing its own instructional service, and instead relies on a private provider, will a given cost continue?
In addition to identifying the fully allocated cost of current services, administrators must also ask themselves what additional costs might be incurred as a result of the contract? Such costs could include the cost of bidding, monitoring and administering the contract.
Table 1, prepared by Gail Ostler, a school-finance consultant and former finance director for the Milwaukee Public Schools, shows how a hypothetical district might compute the hourly, fully allocated, cost of in-house instruction.
Depending on the particular circumstances of the school district and contractor, the figures presented here should be adjusted accordingly. In preparing this chart, Ostler made the following assumptions:
V. POLICY CONSIDERATIONS
Since . private-practice teaching is an emerging and little understood fieldriot much has been written about the subject, nor has much attention been paid to the concept of private-practice teaching among education policy-makers. Private-practice teaching, and contracting for instru4tion in the public schools, raises a number of policy questions for consideration.
Authority of Public Schools to Contract for Instruction
Composite results from surveys of state department of education and state school-board officials. Specific Statutory Authority
| State | School boards have broad powers | School boards have enumerated powers | Permits contracts for instruction generally | Permits contracts for inst. In certain circumstances | Unclear |
| Alaska | X | ||||
| Arizona* | X | X | |||
| Arkansas | X | ||||
| California* | X | X | |||
| Colorado | X | X | |||
| Connecticut | X | X | |||
| Delaware | X | X | |||
| Georgia | X | X | |||
| Idaho | X | X | |||
| Illinois | X | ||||
| Indiana | X | X | X | ||
| Iowa | X | X | |||
| Kansas | X | X | |||
| Kentucky | X | X | |||
| Louisiana | X | X | |||
| Maine | X | X | |||
| Maryland | X | X | |||
| Michigan | X | X | |||
| Minnesota* | X | X | |||
| Mississippi | X | ||||
| Missouri | X | ||||
| Montana | X | ||||
| Nebraska | X | X | X | ||
| New Hampshire | X | X | |||
| New Mexico | X | X | |||
| New Jersey | X | ||||
| New York | X | ||||
| Nevada | X | ||||
| North Carolina | X | X | |||
| North Dakota | X | ||||
| Ohio | X | X | X | ||
| Oklahoma | X | ||||
| Oregon | X | X | X | X | |
| Pennsylvania | X | ||||
| Rhode Island | X | X | |||
| South Carolina | X | ||||
| South Dakota | X | ||||
| Tennessee | X | ||||
| Utah | X | X | |||
| Vermont | X | X | |||
| Virginia | X | X | |||
| Washington | X | X | |||
| West Virginia | X | X | X | ||
| Wisconsisn | X | X |
* States with charter-school legislation implicitly enabling charter schools to contract for instruction.
A. Legal Authority of Public Schools to Contract for Instruction
With few exceptions, public schools have delivered instruction using only those teachers who are employees of the district. State regulations continue to reflect this traditional delivery model. Many state policies, while not prohibitive, nevertheless are ambiguous when it comes to the legal authority of school districts to contract for instruction.
Two surveys, both conducted in the Spring of 1994, sought information on the legal authority of school boards to contract with private providers for education services. The American Association of Educators in Private Practice (AAEPP) surveyed the state departments of education.(14) Senn Brown, director of legislative services for the Wisconsin Association of School Boards and a cofounder of AAEPP, surveyed state associations of school boards. Table 2 shows the composite of responses to both surveys. A total of 44 states responded to one or both surveys.
Nearly every state responding to the survey had some provision for contracting with a private provider, although the contracting option frequently was limited to specific populations or programs such as special education, vocational education, or driver's training. Roughly a quarter of survey respondents indicated that their states grant broad powers to school boards thus implying that school boards would have the authority to contract for instruction generally, as long as such an action would not conflict with other state or local rules and regulations. Brown advises readers to consult legal counsel for expert opinions regarding a state's laws and not depend solely on the survey results presented here.
In Oregon, state law grants both broad and enumerated powers to school boards. According to the surveys, while school boards may contract with private providers for education services, Oregon's Employment Relations Board has ruled that contracting is a mandatory subject of collective bargaining. Contracting for instruction appears to occur infrequently. Officials with the Oregon Teachers Standards and Practices Commission, the agency primarily responsible for teacher licensure, for example, did not know of any such activity taking place within the state.(15) Perhaps a better indication of the authority of school boards to contract with private providers is to look at the states where this activity is already occurring in the public schools. Berlitz Jr. has successfully negotiated contracts with publicschool districts in the states of California, Colorado, Florida, Illinois, Indiana, Maryland, Massachusetts, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, and Wisconsin.(16)
A number of survey respondents suggested that school boards indeed did have the authority to contract, but that no formal opinions had been issued by the state-education department, attorney general's office, or the courts. When the laws are silent or ambiguous on the authority of school districts to contract for instruction, as they often are, school-decision makers may wish to consult legal counsel.
Nancy Lavelle, president of the Institute for the Redesign of Learning, a California company providing education, training, and counseling services to at-risk youth under contract with 30 public schools, discovered the problems of unclear authority first hand. Her company, in partnership with the California Department of Education, and the Department of Rehabilitation, spent one year planning a program to serve at-risk youth, which would have involved the use of some federal funds. Just before the program was to be implemented, the contract office of the Department of Rehabilitation said it would not authorize the contract because, according to one Department of Rehabilitation official, while there are no restrictions, there is nothing in federal regulations that expressly permits state agencies to contract with private providers to implement the use of Vocational Rehabilitation funds. (17)
Says Lavelle, "It is one of those Catch-22 situations. There's no restrictions, but there's nothing that actually allows it, so they [the Department of Rehabilitation] don't do anything about it."(18)
To encourage contracting for instruction in the public schools, the Oregon legislature should include statutory language in the state-education code expressly authorizing school boards, or other governing authorities, 'to.do so. (See Appendix 11 for model statutory language.) In addition, local collective- bargaining agreements, discussed below, should make clear the authority to contract. Certain aspects of contracting-out for services are mandatory subjects for negotiation by collective-bargaining units in Oregon.
B. Charter Schools
One policy reform that may open the door of the public schools to private-practice educators is the
Charter school. Charter schools are public schools freed from many state and
local-education
regulations. The U.S. Department of Education defines charter schools as publicly sponsored
autonomous schools, substantially deregulated and free of direct administrative control by
government. In many instances, charter schools have the authority to contract for instruction.
Legislation in some states allows charter schools to use non-certified, non-unionized teachers
to
provide instruction. As of September 1994, roughly a dozen states had passed some form of
charter-school legislation. Those states which appear to enable charter schools to contract for
instruction include: Minnesota, California, Colorado, Massachusetts, Michigan, and Arizona.
Charter schools may find the idea of private practice appealing because it enables them to contract for special services for which they don't need, or can't afford, permanent, full-time employees. Charter schools could be organized around a small core of teaching staff, for example, who then leverage their resources by contracting for specialized instruction.
Alternatively, a charter school could contract for its entire instructional program with a teacher cooperative of private-practice educators. The New Country School, a charter school in Minnesota, uses such a model where teachers, as members of the EdVisions co-op, provide instruction and consulting to the charter school, as well as to other schools on a contract basis.
Regardless of how the charter schools themselves are configured, the existence and
widespread
appeal of charter-school legislation indicates greater openness toward changing the way
schools are
organized and operated. Reforms, such as charter schools, which decentralize decision-making
and
encourage innovation, pave the way for more acceptance of the private-practice teaching
concept.
C. Teacher- Certification Requirements
With few exceptions, anyone teaching in a public school must be licensed by the state of Oregon.
Typically, teachers obtain such a license by completing a state-approved teacher-education program at a college or university within Oregon. Such programs usually take one year to complete. While the certification process helps to ensure that prospective teachers have completed a certain course of study, it does not guarantee that an individual is fit to teach.
It does, however, serve as an effective barrier-toentry for many talented adults interested in teaching. For the most part, individuals lacking certification, such as small- business owners, university professors, engineers, or nurses who have accumulated a lifetime of experience, are not qualified to teach under the various state regulations that govern our public schools. (They can, however, teach in private schools, which typically do not require certification as a prerequisite for employment).
Some educators in private practice may benefit from alternative-certification programs. In their true form, these programs can significantly reduce the time and investment required to obtain a teacher license. A study entitled Alternative Teacher Certification: A State-by- State Analysis 1993-94 reports that just 14 states have "true" alternative certification programs.(19) (Oregon is not among them.) Programs meeting that criteria involve formal instruction and mentoring while teaching. An additional seven states have similar programs, but they are applicable only in cases of teacher shortages. As of 1993, according to the report, the state of Oregon was not even considering alternative-certification programs
Although a step in the right direction, alternative certification programs do not go far enough in opening up the field of education to different service providers, or recruiting good teachers. Certification, in any of its forms, does not test that the teacher is fit for the job. But it does keep many educators out of the public-school job market. State policy makers wanting to increase the pool of potential educators and trying to invite new talent into the public schools should make waivers to certification requirements available to otherwise qualified teachers.
The true test of teacher competence should be teacher performance, not teacher licensing. Private practice, using-the contract arrangement, ean help ensure that ' teachers are accountable for their performance. In private-practice, teachers serve neither under the protection nor the constraints of collective bargaining rules and public-employee unions. (See Case Studv #6)
CASE STUDY #6
Sylvan
Learning Systems
Columbia,
Maryland
When the Baltimore and Washington, D.C. school districts decided to revamp their remedial education programs, they hired Sylvan Learning Systems, a private tutorial company, to do the job. Within one year, Sylvan students in the Baltimore Public Schools were showing significant improvements on standardized tests in math and reading, prompting the district's director of student assessment, William Caritj to say, "We never see gains anywhere near that magnitude." (20)
In addition to its work in the public schools, Sylvan provides tutoring, testing, and testpreparation courses to students through more than 500 franchised and company-owned centers in the United States and Canada. Traditionally, Sylvan, which has been in operation since 1979, has operated on a parent-pay basis, but it now serves public schools under contract. All Sylvan programs use a three to one student-teacher ratio, and all Sylvan teachers are licensed by the state in which they provide instruction.
As a franchise operation, with individual learning centers requiring teachers, directors, and owners, Sylvan offers a range of career options to educators. One teacher who has moved up the ladder with Sylvan is Ellen Larkin Sternig.
Sternig started out as a public-school teacher but left after eight years because of the limited opportunities available to her there.
"I really felt stifled [in the public schools]," says Sternig. " I felt that a lot of my creative juices were not going anywhere. Teachers are treated like non-professionals. You punch in at eight, go through your education programs, and leave at three. It's an atmosphere of being taken care of, not being in charge."
The lack of a merit-based system of reward also discouraged Sternig, who says some teachers went the extra mile, staying late, creating interesting programs for children, while others put in minimum effort. "I worked hard as a teacher... It was really frustrating to see other teachers just punch in and punch out. I had a difficult time with that kind of system," recalls Sternig.
"I thought there's got to be a better way of using my talents, and life was too short," she says. "I could better service children in some other capacity, though I didn't know what it was [at the time]," she recalls.
So Sternig began to explore her options in education. She coordinated test-preparation and study-skill programs for one company, and served as an academic advisor for another. Eventually, she became the director of a Sylvan Learning Center, and helped the company adapt its programs for its first public-school contract with the Baltimore Public Schools. Now she is considering taking on an ownership role by purchasing a Sylvan franchise.
"As a franchisee, you're on the front line, working with kids, counseling parents. The center will be as good as the person running it. Accountability? You bet. Parents come and pay. If the kid is not making it, they don't come back. You do whatever you need to do to make that kid successful. That's what it's all about, and that's not happening in the public schools."
Sternig thinks that efforts to transform public education will lead not just to more opportunities for students, but more opportunities for teachers as well.
Says she, "Teaching is not like other professions. If you go to medical school, you come out and you can work for a hospital or open your own practice. In teaching, you get out of education school and you go into the monopoly, or else you don't work. AAEPP [private practice] opens up the door and lets people realize there are options."
Concludes Sternig, " I'll never go back now. I've seen other ways, other possibilities out there... I really want to be my own boss."
A contract with'a priVate-practice teacher is an agreement for the provision of a service, and not a guarantee of employment. It is also usually for a limited time. Because of these differences in the relationship between the school and the teacher, those private-practice educators who do not perform satisfactorily will have their contracts cancelled or find that they are not renewed at the close of the term. Conversely, those teachers with very good performance records will likely see their contracts renewed, and may even generate new business as a result of their good record.
Certification requirements have other adverse consequences, as well. In some cases, they can penalize students, or increase school costs. For example, Berlitz Jr. provides foreign-language instruction to public schools in ten states. Even though Berlitz teachers may be very good at what they do, because most of them are not certified, high-school students learning a foreign language from a Berlitz Jr. teacher can not earn credit for their coursework toward graduation. In some cases, high schools have had certified teachers who serve no instructional purpose sit in on the Berlitz Jr. classes solely for the purpose of assuring credit. Such a duplication of staff needlessly drives up the cost of public-education.
D. Teachers' Unions
Opposition to private-practice teaching and other contract arrangements with public schools, also known as privatization, has come chiefly from the National Education Association (NEA) and its state and local affiliates. Not only is the NEA the largest teachers union, it is also the largest union, period. With 2.2 million members, the NEA is a powerful and influential force in education policy, particularly as it concerns public education at the K-12 level. (The American Federation of Teachers, or AFT, which is expected to merge with the NEA, claims approximately 820,000 members.)(21) In Oregon, the NEA claimed 36,726 members in 1993; corresponding figures for the AFT are not available.(22) Many attempts by public schools to contract with a private provider for instructional and non- instructional services have failed due to resistance from public employees and their unions. Given the incentives involved, it is unrealistic to expect to gain the full support of union leadership when it comes to contracting for instruction.
School administrators wanting to explore the contracting option may wish to include a provision in the collective- bargaining agreement explicitly allowing for contract instruction. Such a provision will make it easier for a public-school district to pursue this option should it wish to do so at some later date.
Despite union opposition, many private-practice educators have been successful in winning contracts
with the public schools in other parts of the country. Local school boards, principals, individual educators, and parents are usually open to the idea of exploring alternative ways of delivering education. Moreover, school boards tend to use the contracting option as a supplement, rather than a replacement, for the existing instructional arrangement. In such a case, union positions are not significantly threatened.
V. CONCLUSION
Increasingly, public schools are coming to acknowledge that new ways of doing business are necessary if students are to excel in the 21st Century. Contracting for instruction is a practical option for Oregon school boards and school administrators interested in strengthening accountability, cutting costs, increasing flexibility, or taking advantage of outside expertise and innovations. Instead of hiring an employee at a given rate, school administrators buy the performance and output of an educator for a given price, to paraphrase Ted Kolderie, one of the pioneers of the private-practice concept and director of the Center for Policy Studies in St. Paul, Minnesota. Such an arrangement, if properly monitored, makes the private-practice teacher accountable for results, not just for the process of teaching.
In turn, the contract arrangement elevates the professional status of teachers. Contracting with a private-practice teacher requires school administrators to deal with educators on a professional, rather than an employee, basis. Private practice enables teachers to take control of their own careers, negotiate their own compensation, and make their own decisions about how to use time, resources, and methodologies.
Ellen Larkin Sternig, an educator in private practice, says the new breed of teachers is demanding greater opportunities for autonomy and professional growth. Meanwhile, parents are demanding better educational outcomes for their children. These two cross-currents in education are changing the way schools and educators deliver instruction. Every major company is going through restructuring and so is education, says Larkin Sternig. Either you're going to be part of it, and make it happen, or you're going to be pulled along.
ACKNOWLEDGMENTS
I would like to thank Senn Brown, Chris Yelich, Kurt Austin, Dick Meinhard, Ted Kolderie, Robin Gross, Margaret Sapir, Ellen Larkin Sternig, Greg Genal, Bob Hazen, Susan Fino, Nancy Lavelle, and Jim Boyle for their input and suggestions. My thanks to Raymond Ng who prepared this paper for publication. I would also like to extend my appreciation to supporters of the Reason Foundation who made this research possible.
RECOMMENDATIONS FOR POLICY MAKERS
MODEL LEGISLATION
The American Association of Educators in Private Practice has proposed the following model legislation to clarify the authority of public schools to contract with a private-practice educator for instruction:
A school board ma contract in writing with any partnerszlip, corporation, sole proprietorship, cooperative, association or other legal entity for teaching or other educational services. Expenditures pursuant to such a contract will be aided under the state school-aid program.
In addition, state-policy makers may also wish to include a provision enabling schools to use noncertified teachers for the delivery of instruction provided such an individual is otherwise qualified to teach. With respect to the awarding of course credit and grades, such a teacher would have the same authority as his or her certified colleagues, and students receiving instruction from a non-certified teacher would be able to apply their coursework toward graduation requirements and the calculation of their Grade Point Averages (GPA).
CONTACTS
American Association of Educators in Private Practice
N7425 Switzke Rd.
Watertown, WI 53094
(800) 252-3280
Berlitz Jr.
125 Main St.
Westport, CT 06880
(800) 528-7929
Ombudsman Educational Services
1585 N. Milwaukee Ave.
Libertyville, IL 60048
(800) 833-9235
Institute for the Redesign of Learning
1137 Huntington Dr.
South Pasadena, CA 91030
(213) 257-3006
Math Enrichment Resource Center (MERC)
1484 Canfield
St. Paul, MN 55108
(612) 645-2706
Gail Ostler, CPA Consultant
2566 N. Farwell Ave
Milwaukee, WI 53211
ReadyGo, Inc.
1720 Craftsman Dr.
New Berlin, WI 53151
(414) 542-8462
Science Capsule
N7425 Switzke Rd.
Watertown, WI 53094
(800) 252-3280
Science Encounters
4401 East West Hwy.
Suite 450
Bethesda, MD 20814
(301) 718-0808
Sylvan Learning Systems, Inc.
9135 Guilford Rd.
Columbia, MD 21046
(800) 627-4276
Learning Styles
125 Liberty St.
Springfield, MA 01103
(413) 736-4880
Ted Kolderie
Center for Policy Studies
59 West Fourth St.
St. Paul, MN 55102
(612) 224-9703
ENDNOTES
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