Med School rides grant funding

Federal stimulus funding has been a boon for the Yale School of Medicine this past year, but now the school must prepare for the day when that extra money is gone.

While most of Yale’s professional schools are tightening their budgets because they are receiving less endowment funding for the upcoming fiscal year, the School of Medicine has avoided large cuts because of economic stimulus funding from the National Institutes of Health, or NIH, School of Medicine Dean Robert Alpern said. When the stimulus grants run out in a year and a half, individual researchers will have to decide how to cut their own expenses, he said.

“We are starting to think about the specifics of [how to deal with decreased funding,]” Alpern said. “[But] we still have time.”

About 50 percent of the School of Medicine’s approximately $1 billion annual budget comes from grant funding, Alpern said, compared to just 8 percent from payouts from the University endowment. As a result, the School of Medicine is less financially dependent on the University than Yale’s other professional schools, he said.

Still, Alpern said the reduction in endowment payouts has mainly affected the School of Medicine’s dean’s office. Although the office has not had to cut jobs, it has eliminated perks such as lunch meetings and free breakfasts, he said.

While the School of Medicine receives research grants from independent organizations such as the American Heart Association, the American Cancer Society and the Bill & Melinda Gates Foundation, most grant funding comes from NIH grants, Alpern said. Another 35 percent of the budget comes from faculty’s clinical practices at Yale-New Haven Hospital, and tuition revenue represents about 3 percent, Alpern said.

Stimulus funding from the $787 billion American Recovery and Reinvestment Act, passed by Congress in February 2009, has provided the School of Medicine an extra $101 million in grant funding from the NIH, Alpern said. But because this stimulus funding dries up next year, the School of Medicine needs a long-term financial plan to offset the coming shortfall, said Cynthia Walker, the school’s deputy dean for finance and administration. Walker said the plan will draw on reserves and increase revenue from clinical practice, fundraising and other federal grants.

The main goal is to sustain a stable level of funding for medical research at the School of Medicine after stimulus money runs out, said Richard Jacob, Yale’s lobbyist.

“The long-term health and productivity of university-based medical research really depends on having the budget of the National Institutes of Health grow in real, inflation-adjusted terms for the next several years,” Jacob added.

Barry Toiv, the vice president of public affairs for the Association of American Universities, a nonprofit association of 60 research universities, said researchers from private and public universities are working to ensure that Congress continues to appropriate and increase funding for research after the stimulus money runs out. And President Barack Obama has requested a $1 billion, or 3.2 percent, increase in funding for the NIH for the 2011 fiscal year, Jacob said.

Clinical practice revenue is also at risk from federal budget cuts, Jacob said. Since Congress passed the Balanced Budget Act of 1997, which contained major Medicare reforms, physician reimbursement from Medicare has been scheduled to decrease each year. In years past, Congress has voted to waive or minimize the decrease. But for 2010, Congress has only delayed the 21 percent decrease in the physician fee schedule until March 1. If the decrease goes into effect, revenue for the Yale Medical Group — the umbrella organization for the School of Medicine’s clinical practice — would decrease by over $8 million.

Alpern said he is confident Congress will reverse the decrease this year. Otherwise, he said, most doctors will stop taking Medicare patients, severely disrupting care for Medicare enrollees.

“A cut of that magnitude would be devastating if it were allowed to take effect,” Jacob said.

The School of Medicine was ranked sixth in the 2009 U.S. News & World Report survey of American medical schools.

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