Observations

Regional ReviewQuarter 3, 1999

On the Couch

Have you been feeling stressed or depressed lately? If so, you might want to consider visiting a psychiatrist. If you are in New England, you are in the right part of the country; New England has more psychiatrists per 100,000 civilian population than any other region, according to the American Medical Association.

Does this mean that New Englanders have a more stressful life than people living in other parts of the country, say, because of long snowy winters? Perhaps not. The region hosts a high concentration of physicians of all types: 371 for every 100,000 in population as compared to 264 in the nation. But New England is particularly full of specialists, not only psychiatrists, but also cardiologists, anesthesiologists, and neurologists.

The Doctor Is In One reason may be that the region’s high population density and high per capita income support the market for the most specialized medical practices. This is particularly true in Massachusetts and Connecticut, which rank among the top five by concentration of psychiatrists. Big medical schools and research institutes in Massachusetts also provide employment and networking opportunities for physicians.

Yet, psychiatrists are more concentrated in New England than other specialists. Insurance coverage for mental health may partly account for this, says Richard Frank of Harvard Medical School. For instance, Vermont’s exceptionally comprehensive coverage of mental health care allows for a high concentration of psychiatrists in spite of lower population density and per capita income. Likewise, Massachusetts has required insurance companies to include mental health coverage in their benefit packages since 1973. And both Massachusetts and Connecticut have high public funding of mental health services.

Yet, economics does not explain everything. Differences in social stigma attached to mental illness may significantly affect the distribution of treatment providers, says Frank. New England’s muggy summers and long winters may not reduce mental stress, but its cultural climate may be more supportive of those seeking treatment.
— MIZUE MORITA


Virtual Education

Although the Internet is changing the educational landscape at an increasingly rapid pace, don’t expect the classroom to disappear any time soon. While schools as prestigious as Duke’s Fuqua School of Business and the University of Pennsylvania’s Wharton School offer Internet-based MBA or executive education programs, these programs still require substantial classroom time.

U. Penn’s Wharton Direct program has set up more than 30 interactive classrooms around the country where students meet in person but communicate with the instructor via satellite. Duke’s Global Executive MBA couples over 70 weeks of independent, online learning with 11 weeks of meeting time. By retaining class time, they recognize that students are extremely important “inputs” toward education. As Williams College economist Gordon Winston notes, “Students educate both themselves and each other, and the quality of the education any student gets from college depends in good measure on the quality of that student’s peers.”

Students’ contributions to education include classroom comments, team assignments, and insights discovered in study groups. As the number of students meeting together increases, for example, the odds that at least one of them will understand a difficult concept (and be able to explain it to others in terms a peer can understand) also increases.

The classroom’s cooperative atmosphere is especially important in fields such as business, in which the ability to work successfully with a team of peers is paramount. Fuqua admissions counselor Lisa Lee notes that one of the main reasons for required class time is to help develop rapport among the students. In addition, the classroom allows the potential of networking with future professional contacts.

Further innovations may allow more interaction in distance learning. Until then, the classroom still holds many advantages.
— PETER M. MORROW


Dial-A-Rate

prepaid phone cards can be found everywhere. They are sold at convenience stores, post offices, even off carts at some subway stations in Boston. The multitude of cards available is a reminder of how telecommunications are expanding, and how new technologies and changes in regulations have made it easier to make long distance calls, even away from home. But, as calling has become easier, understanding calling prices has become more difficult.

There are as many calling rates as there are cards to choose from, and there is a striking difference between what a person might pay for a long distance call by using one of the major phone carriers versus a prepaid calling card. For example, AT&T quoted a special rate to India at $1.22 per minute. Yet, with a phone card from PT-1 Communications, a call to India would cost just 66 cents per minute. And there are other cards available at even lower rates.

How can prepaid phone cards offer such low rates? One explanation is lower overhead costs. Because the cards are sold outright for cash, no costs are incurred for setting up and maintaining account records, billing, or collection. But, for international calls, the price difference may be more than just overhead.

U.S. carriers have traditionally incurred costs in order to compensate foreign phone carriers for completing their calls abroad, as determined by an international accounting rate system. With the development of new technology, the costs of communication have dropped but the settlement rates have not fallen as fast or as far. And, according to the Federal Communications Commission, settlement rates today greatly exceed foreign phone carriers’ actual costs. So, some prepaid cards deliver low rates by using technology to avoid or diminish these additional charges. “An increasing share of traffic is bypassing the accounting rate system via private lines or the Internet,” says economist James Alleman at the University of Colorado, Boulder.

Prepaid calls may be of lower quality and it may take several attempts to get through. But with technological advance, that is likely to improve. And so are prices, as it becomes harder to maintain old-fashioned rules that are not based on economic incentives.
— DELIA SAWHNEY

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