Medical schools reeling as state funds dip

Underserved patient populations are likely to be the biggest losers.

By Myrle Croasdale, amednews staff. Feb. 17, 2003.

In the wake of state budget woes across the country, publicly funded medical schools are considering a variety of options for making ends meet. They include raising tuition, cutting research funding and freezing faculty hiring.

School administrators say they'll do their best to protect medical education this year but they aren't optimistic about maintaining the quality of training and research if the budget downturn persists.

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Seventy-three medical schools out of the 124 allopathic four-year programs in the United States are considered public. Many raised tuition in 2002 because of budget pressures, and more increases are slated for fiscal year 2003.

California, which is facing a $35 billion shortfall, has a history of protecting its medical education system, but this year that's impossible, said Gerald Levey, MD, provost for medical science at the University of California, Los Angeles, and dean of the David Geffen School of Medicine.

73 of the 124 U.S. allopathic medical schools are public institutions.

While one year will be tough, a pattern of cuts could be crippling, he said. "What's of deep concern to myself and all academic [administrators] in California is the magnitude of budget cuts to the state next year, the year after and who knows how long into the future," Dr. Levey said. "When things stabilize, we tend to not get the cuts back."

All of the University of California system's five medical schools have already raised student fees to cover a mid-2002 cut from the state.

Dr. Levey said the UCLA medical school is considering raising student fees $1,200 for fiscal 2003. Research has already been affected. But, Dr. Levey said he is committed to expanding the school's research portfolio to help address state budget cuts.

Many unknowns

Specific reductions for 2003 are still undetermined. An initial budget proposal by California's governor, which was struck down by the Legislature, called for a 15% reduction in Medi-Cal reimbursements and a $299 million decrease in state dollars for the University of California system.

A spokesman from the UC system said the Medi-Cal cut would have sliced a minimum of $300,000 from academic medical center revenues and $10.5 million from UC physician clinic revenue.

The UCLA medical school, which gets 13% of its $742 million budget from the state, has lowered administrative salaries 5%, and the school is ready to freeze hiring if needed, Dr. Levey said.

For now, UCLA has no plans to trim medical education programs or reduce residency slots, but "nothing that we could imagine would be in the realm of impossible," Dr. Levey said. "It's a staggering deficit."

Across the country at West Virginia's Joan C. Edwards School of Medicine at Marshall University in Huntington, a handful of resident positions were trimmed in July 2002 in response to budget woes brought on by soaring medical liability insurance premiums. The premiums ate up $1.8 million of the school's $70 million budget in 2002 and will rise another 13% for fiscal 2003.

Combined with increases to health insurance and workers' compensation premiums, an unfunded salary increase mandate and proposed state cuts, Marshall could see a $3.2 million drop in its budget for 2003.

If Medicare reimbursement rates are reduced, the school will take an even bigger hit, according to Jim Schneider, associate dean for finance and administration at the school.

Schneider said the school has placed a ban on filling all state-funded positions and imposed a 10% reduction on all medical school department operating budgets. The freeze means 20 positions are vacant, including three recent resignations from the general surgery staff.

If these cuts don't generate enough savings, all medical school staff will have to take a three- to five-day unpaid furlough this summer.

Meanwhile the faculty losses to general surgery have pushed nonemergency surgeries back more than three weeks. Only five general surgeons now support the two-hospital trauma service.

"This is the first time in the 25 years I've been in higher education that we've faced such a significant challenge," Schneider said.

In New York, state medical school tuition is scheduled to increase 80% over four years, landing at $18,000 annually in 2004. Yet the state plans no funding cuts for the schools.

Joshua Cohen, chair of the AMA's medical student section and a medical student at New York University School of Medicine, said the jump in tuition has stunned enrolled students and is discouraging prospective State University of New York medical school students, as tuition nears what private schools charge.

However, the biggest losers, he said, are the medically underserved, since public schools are often the last refuge for students wanting to work in underserved areas.

"I have a number of friends in the SUNY system who are frustrated," Cohen said. " They chose to go to public school because of the lower financial burden, so they could go into primary care and work in underserved areas. Now, they don't think they'll be able to afford to do that."