Funding for health center to be directed at faculty physicians

Erin Ghere

and Sean Madigan
Although officials for the University Academic Health Center said it is too early to know where state funding for the institution will be spent and what budget cuts will be made, directing money to faculty physicians will be a top priority.
Despite receiving far less money than requested, health center officials said the funding shortage will not be passed on to students through tuition increases.
Gov. Ventura signed the health and human services bill Tuesday evening, securing funding for the health center for the next 25 years. University President Mark Yudof originally requested $37 million for health center financing, as part of a $198 million budget proposal.
Working with legislators, Ventura called for $968 million from funds garnered in last year’s tobacco settlement to go to four endowments, one of which is a $377 million appropriation for medical education. Interest from the endowment will fund the health center and 16 other clinical training sites, for a total of $19 million each year.
The health center will receive about $8 million each year, falling well short of the their two-year $37 million budget request.
Dr. Frank Cerra, AHC senior vice president, will meet with the health center’s seven deans during the next two weeks to decide where to disperse the funding.
“We are just now coming to grips with what we will fund and not fund,” Cerra said. But he added that supporting the teaching faculty will be a top priority.
“It’s imperative that the faculty in clinical departments get paid for the education work that they do, from revenue that was meant to pay for education work,” Cerra said.
About 20 percent of the health center’s total budget is generated through patient care. But health center officials say market forces are making doctors spend more time tending to patients and less time teaching students.
Despite the continuing gap in revenue versus expenses, Katherine Johnston, the health center’s chief financial officer, said the cost will not be passed on to the students in the form of a tuition hike.
“Tuition rates have been approved by the board for (fiscal year) 2000, so there will not be additional increases for the next year to offset the difference between our request and the allocation,” Johnston said.
Tuition accounts for only 5 percent of the health center’s total budget. Cerra said the funding gap will be filled through cost reduction, funding from the Medical Education Research Cost endowment and savings from the health center’s reserves. The MERC program received a percentage of the $377 million endowment.
MERC channels money through teaching hospitals to finance graduate medical education.
Health center officials will receive interest from the tobacco endowments for at least 25 years, easing the concern of increasing costs.
Christine Roberts, AHC media director, said the center had stretched its resources as far as they would go. They had begun using University reserve funds, cutting faculty and reducing class sizes, she said.
“This funding is absolutely critical,” said Robert Bruininks, University vice president and provost. And difficult to get. University officials had to sweat it out until just minutes before the May 17 midnight adjournment before the final funding came down.

Legislative roadblocks
The $6.1 billion tobacco settlement funds proved to be one of the biggest hurdles for the 1999 legislative session. Senate Democrats agreed with Ventura’s recommendation to create endowments from the funds, but House Republicans opposed them, demanding larger tax cuts for citizens.
Health center officials consider the amount of funding a partial victory. Prior to the establishment of endowments just one week before the end of the session, the health center was looking at just $6 million in the House bill and some obscure funding from the Senate bill.
One of the biggest roadblocks in capturing funding had nothing to do with tobacco endowments, but rather eight abortion provisions tacked on to the health bill.
Ventura threatened a veto if any abortion language appeared in the bill, which was still in debate less than 15 minutes before the session ended. Eventually, both chambers passed the bill after slashing all abortion provisions, but not without starkly divided votes.
The University was allocated $119 million over two years, which takes into consideration health professional education as well as undergraduate experiences, faculty pay, facility repairs and University extension and community programs.