For at least the last 20 years, the United States has lagged other developed countries in the returns it gets on its K-12 education and healthcare investments. In education, the U.S. spends almost 40% more than the OECD average expenditures per full-time equivalent, yet scores only slightly above average on outcomes scores and remains particularly behind some of its global economic competitors. In healthcare, the U.S. spends 2.5x the OECD average, yet America's health outcomes are generally no better than its global peers. In financial terms, America does not achieve a competitive return on its investment in these categories and has not for multiple decades.

Despite numerous, well-intentioned, and, in many cases, very positive efforts to close these gaps, America has barely improved its competitive position, despite plenty of time to see progress. Why is this? Are current American approaches the right approaches to closing the gap? Is there a better way to problem solve our K-12 education and healthcare investment productivity gaps? In his recent book, Upstream: The Quest to Solve Problems Before They Happen, author Dan Heath outlines an approach to problem-solving that moves from "reacting to problems, putting out fires, dealing with emergencies" to preventing the problems in the first place. The book provides problem-solving insight, which I believe could accelerate closing our K-12 education and healthcare gaps.

In the case of K-12 education and lifetime healthcare, there is a deep body of research indicating that the earliest days of a child's life (from prenatal to three-years-old) can profoundly impact cognitive development and long term health. For over 20 years, we've known about the link between infant and toddler brain development and later educational success. In the last decade and with increased momentum in the last few years, neuroscience studies have linked brain development and early childhood stress to long term health issues. Just in the past year, there have been studies released out of Harvard Center on the Developing Child, The University of California Berkeley, The Office of the Surgeon General of California and The National Academies of Sciences, Engineering, and Medicine pointing to the significant societal costs in not ensuring that our infants and toddlers and their families get off to great starts in life.

From recent work, not only is quality early childhood education needed to get off to a great start in life, but the system thereafter is not set up to catch people up. The vast majority of school districts move kids along with roughly a year of education every year; only a handful of districts can accelerate that kind of annual academic progress. For example, if only the top 20% of districts can make up the gap for a cohort that's a year behind at the end of second grade, then even if we were to improve the entire K-12 system radically it wouldn't be enough if we didn't also get a lot better at the early years.

Study after study outline a profound and unambiguous evidence base that under-investment in our youngest members of society have significant and broad lifelong equity, economic and moral costs, for instance:

• Child and maternal health: Nearly 1 in 5 children in the U.S. have special healthcare needs but millions lack access to the services they require. A special healthcare need can include physical, intellectual, and developmental disabilities, as well as long-standing medical conditions, such as asthma, diabetes, a blood disorder, or muscular dystrophy. Their mothers don't fare much better; U.S. maternal mortality has increased in recent decades, and one in nine American women suffers from maternal depression. Both maternal mortality and depression disproportionately affect women of color. Estimates of the societal costs of current approaches to child and maternal health range from $500 billion to $600 billion per year.

• Racial inequity: Children of color represent more than half of kids under five in the U.S. today. Compared to their white peers, they are far more likely to experience poverty, food insecurity, homelessness, and preschool expulsion. And their parents face a higher risk of employment barriers, uncertain immigration status, unequal wages, and nonstandard work schedules that make it harder to use child care and early education programs - society benefits when all of its members start with a level playing field on its opportunities.

• Education outcomes and cost: Fewer than 3 in 10 children have access to high-quality early care and education. A typical low-income five-year-old enters kindergarten more than a year behind his/her higher-income classmates in language and literacy skills. If we’re counting on primary education to prevent opportunity gaps, we’re starting way too late. The primary grades, at best, will carry kids along on pace, not catch them up.

• Workforce and the wealth of young families: Couples and single parents spend nearly 25% and 50% of their income on childcare. Some caregivers must choose between daycare and groceries. Others live in childcare deserts and have to quit working because no care is available. More than half of Americans live in neighborhoods with an insufficient supply of licensed childcare.

The latest evidence-based research indicates that there are three main areas to invest in to ensure our infants and toddlers get off to great starts. First, provide healthy beginnings in the form of family health and healthcare. In States, this means the expansion of Medicaid programs or other health insurance benefits. It also means better and more generous family leave policies and more generous WIC funding (food funding). It can mean better screening of children for health or cognitive or disabilities. Second, families need to be supported through income and job programs, including but not limited to flexible scheduling programs, living and minimum wage programs, Earned Income Tax Credits (EITC), and Childcare tax credit programs. And third, we must have access to quality childcare, including where there is no external provider of childcare. Programs can take the form of better parenting education programs, subsidized or fully provided childcare, better and improved childcare quality incorporating the latest brain science, and better standards for early education quality and metrics around the whole child as they enter the school system.

Nobel prize-winning economist James Heckman of the University of Chicago has been tracking a few early childhood investment programs for over 30 years and has concluded that these particular programs have an ROI exceeding 13%. Not all early childhood development programs and policies produce those types of returns, but many do. Much work is currently underway to discover the design elements that drive those kinds of returns. Most recently, Harvard economist Nathaniel Hendren released a study of 133 historical policy changes and concluded, "our results suggest that direct investments in low-income children’s health and education have historically had the highest [marginal value of public funds] among the many policy changes." Further, Hendren and his colleagues “find that opportunities for high return investments in children have persisted across policy categories for many decades.”

Taken together, the economic benefits of the various evidence-based studies approach one trillion dollars per year. And, that leaves out any moral imperative to treat our citizens with respect and care. More work needs to be done to integrate what is known about infant and toddler brain development and cognitive, social, and healthcare outcomes. To date, these studies lack an integrated macro view. Integration would help outline the macroeconomic impacts of proper prenatal to three development. Much of the work done in early childhood development has been done in silos, preventing a thorough accounting of the economic benefits to society.

Yet, knowing these compelling statistics have been around for a couple of decades, we still underinvest in our youngest. Children under three and their families receive about ½ the government (federal, state, and local) spending support that children of all ages, meaning up to age 18.

So why is this? What are the barriers that must be overcome to invest in the promising pathway to improved American competitiveness? Many of these barriers have been well articulated by Promise Venture Studio, an organization dedicated to catalyzing innovation in the early childhood development sector. Others, including former Secretary of Education Arne Duncan and The Hechinger Report, have also articulated reasons that an ‘upstream’ approach to investment has been slow to materialize at scale - the list is long and goes a long way to explaining lack of focus on infants, toddlers and their families:

• Lacking an integrated strategic perspective:

  • Need for an integrated, evidenced-based macro view of the societal benefits. To date, much of the academic work has been subscale (with under 100 participants studied in the most famous and reputable studies) or narrower, less systemic programs (value of quality childcare but excluding the health values, for instance). As mentioned above, public health, education, and economics academics have historically been siloed organizationally.

  • Lack of communication of the strategic stakes - global competitiveness - enough to create a movement around getting America’s infants and toddlers off to great starts. Many public health initiatives such as smoking or drinking and driving have been able to communicate the overarching need for change in ways that capture the imagination.

• Gaps in Government Organization and ideology:

  • Infants and toddlers do not have direct democratic representation: Seniors have 47 million voters; young children have zero, and the low-income parents of young children are stretched thin. Unlike senior citizens, it's hard for them to be politically active.

  • The Early Childhood Development (ECD) workforce and many low pay workers have had disproportionately less legislative power: Childcare workers and early educators are disproportionately women in general and women of color in particular. To date, their work has been undervalued and underpaid at best and invisible at worst.

  • Formal government systems and structures fragment Prenatal to three efforts: Unlike K-12 education, there is no system tasked with nurturing all children under five, leading to fragmented supports and services. In fact, in many states (but not everywhere), infant and toddler initiatives tend to be spread among several departments, with overall accountability and coordination lacking. My home state of Texas is ranked last in the efficiency of its system.

  • Some ideological mindsets are at odds with governmental Prenatal to three interventions: Privacy is one example. We value the privacy of the home, but this can isolate families and lead society to render quick judgments on parents. We value privacy, but we end up imposing it on people who may or may not want it. This is especially true in the infant and toddler arena, where services are entirely voluntary. Another example is wealth transfer, effectively transferring wealth from childless citizens to those who have children.

• Lacking an upstream, long term, and systemic plan and perspective:

  • Investments can take decades to show returns: Politicians won’t be in office when today’s three-year-old’s are 13 or 30, disincentivizing spending on our youngest citizens. We end up allocating far more resources to remediation than prevention.

  • Businesses support beyond a couple of issues (Pre-K programs, and the importance of Child Care) has been lacking. Companies have supported early childhood programs directly related to educational (Pre-K) or workforce (childcare availability) initiatives. Still, they have been hesitant to promote family health or family income and housing support issues. Some of this relates to the long term nature of benefits; some it pertains to lack of education of society, and some relate to lacking a direct ask or call to action. There is unambiguous economic evidence for businesses to support early childhood efforts.

As a result, America continues to avoid problem-solving the most fundamental issues - infant and toddler health and education. America continues to spend more on downstream interventions doing as Dan Heath outlines, reacting to problems and fighting fires. Also, what programs we have aren't just underfunded; they are uncoordinated - with outcomes and evidence that are not well tracked to continuously improve our investments. Thus, reducing the return on our education and health care investments and creating non-distinctive and non-competitive outcomes. It is time to try a new approach.

So, what should we do?

First, both leverage the existing evidence base and conduct further research to provide an integrated perspective to serve as a call to action for a new movement. Integrate the various academic and socio-economic work into a cohesive whole, including a macro-economic look at the value. Outline the systemic nature of the issue and the detrimental impacts of investing only in narrow-based programs. The fantastic report recently released by the University of Texas LBJ School of Public Policy’s Prenatal to Three Policy Impact Center exemplifies an integrated evidenced-based policy and program review. As discussed in the report, further research is needed to round out more evidence and complete an integrated economic view. But the report is a very important first step. With that integrative view in hand, develop a communications program that pushes the agenda to movement status.

Second, rethink the entire governmental organization approach to Prenatal to three investments to improve effectiveness and efficiency. For example, early childhood funding in Texas flows through five different state agencies ranging from health services to workforce supports. Consolidate departments to create powerful senior leadership positions. Be mindful that housing Prenatal to Three initiatives in education organizations may take away focus, as it has done in the past.

In addition take a hard look at processes that are both detrimental to families and inefficient. Many government enrollment (and re-enrollment) processes for Medicaid and SNAP are incredibly bureaucratic, expensive, and prevent delivery of services to the very people who need them. These need to be streamlined. Also, examine all programs that currently receive investment focusing on improving the returns of that investment portfolio. An excellent example of this is in home visiting and screening. Program costs vary widely and can run from under $1,000 a family per year to over $16,000 per family per year. Are we doing our best to ensure the delivery of the right amount of service to the right families?

Third, measure whether our infants and toddlers are getting the starts they deserve and use those measures for continuous improvement. Kindergarten readiness has been the mantra for many education initiatives, as are third and fourth-grade test scores. Be more explicit on what we mean by Kindergarten readiness. Isn't a child ready when the kids know the learning standards, are healthy, have housing, and don’t suffer from toxic stress caused by adverse childhood experiences?

Fourth, invest more in the evidence-based approaches that are currently known to work. Early Head Start is a proven, evidence-based program. At present less than 8% of the infants and toddlers eligible for this program are enrolled.

Fifth, involve families in any system redesign process. Much of the prenatal to three arena needs a redesign. Use the best of today's design principles, most notably user-centered design, to incorporate input from the most important constituencies, the families.

Sixth, involve businesses and import the best of the for-profit sector in redesign efforts. Are there creative financing techniques that can be used to finance prenatal to three investments? As but one example, use tax credits to expand facility capacity in childcare. Can we leverage new technology and emerging business practices, (expanding what Promise Venture Studio, the Dallas-based Child Poverty Action Lab, Early Matters Greater Austin are doing) to improve the delivery of services? Can we expand what is already being done and advocated by Opportunity Exchange in childcare with shared services, combining buying capacity to reduce the cost to serve? Can more businesses add family-friendly benefits and policies?

Allowing all of our families to enjoy equality of opportunity is a must. By all indications, quality actions directed at infants and toddlers and their families have significant economic potential. Could those actions be a vital cog in improving America’s global competitiveness? The evidence, although siloed, is compelling. It is time for a new, integrated 'upstream' approach. We need to increase our focus and investment on infants and toddlers, find new communications approaches to gain support, and new governance mechanisms to continuously improve on both the effectiveness and efficiency of these programs.

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Many thanks to Elliot Regenstein of the Foresight Policy + Law group for his wise content and editorial counsel during the drafting of this article.

About the Author:

Tom Hedrick is the founder and Managing Director of private investment firm Dillon Joyce Ltd. Prior to that Tom was a Senior Partner with McKinsey and Company. Tom was also a 2017 Fellow in Harvard's Advanced Leadership Initiative where he focused on early childhood education and development. After leaving Harvard ALI, Tom helped lead a turnaround of AVANCE Inc. as CEO. AVANCE is a national nonprofit focused on parenting education for low-income Latinx families. Since leaving AVANCE, Tom has been involved with various Prenatal to Three initiatives in Texas including Early Matters Greater Austin, the Texas Prenatal to Three Collaborative, and the Prenatal to Three Policy Impact Center at the University of Texas.