Amid a national decrease in medical school endowment returns and applications and a rise in the number of uninsured patients, Duke Medicine has remained stable-but cautious-in grappling with the ongoing global financial crisis.
Duke Medicine is working hard to cut costs and may be forced to sideline several construction projects, said Dr. Victor Dzau, chancellor for health affairs and president and chief executive officer of Duke University Health System. But the School of Medicine has not witnessed a decline in applications, and administrators noted that Duke Medicine's commitment to patient care, academics and financial aid will remain paramount despite the tough times.
"I'm a little bit worried," Dzau said. "I don't want to say we are fine, nothing is wrong.... But I remain feeling quite good that the [School of Medicine] and the Health System are in stable positions, and we obviously are going to watch very carefully what happens next."
Overall, Dzau said Duke Medicine-which comprises DUHS, the School of Medicine and the School of Nursing-continues to be "quite solid," but does not expect this stability to last if the economic climate continues to worsen. Although DUHS is seeing about the same volume of patients as it has in previous years, it has witnessed a decrease in more expensive, nonessential procedures such as electric and cosmetic surgery, as well as an increase in the number of uninsured patients, Dzau said.
DUHS is in the process of obtaining a Certificate of Need for a $250 million expansion of the Duke Comprehensive Cancer Center and a renovation of the Morris Cancer Clinic. In November, officials stated in a press release that they hoped to begin construction on the three-year project in July 2009.
Because of the impact the recession may have on DUHS's strategic reserves, however, this date may have to be pushed back even if this project is essential to Duke Medicine's future, Dr. William Fulkerson, senior vice president for clinical affairs, wrote in a DUHS Town Hall Meeting Summary Jan. 23.
Dzau noted that Duke Medicine does not have to reach a decision about expanding its cancer center until May. The School of Medicine has already delayed construction of a signature research building of about 300,000 square feet, he said.
He noted that plans are still on track to create the School of Medicine Education Center, which would allow medical students and clinical and basic research faculty to interact in a single area. The Education Center is funded by a $35 million grant from the Charlotte-based Duke Endowment.
Dr. Nancy Andrews, dean of the School of Medicine, said the school is carefully assessing the worth of every job position and closely evaluating new recruits to guarantee that they are of top quality. In addition, Andrews said the school is discouraging overtime and staff travel and is always looking to make pre-award and post-award grant management more efficient.
"We are cutting in every place that we reasonably can to redirect more of our resources into academics, to protect and sustain our academic mission," Andrews said.
Dzau said it is too early for DUHS to discuss salaries for the coming year, but noted that the medical school will make cuts in line with the rest of the University. George McLendon, dean of the faculty of Arts and Sciences and dean of Trinity College, told The Chronicle in November that he did not foresee any faculty salary freezes.
For the School of Medicine, however, the economic crisis is not as serious a problem as the flat level of funding from the National Institutes of Health. Since 2003, the NIH budget has failed to keep pace with inflation and has lost more than 20 percent of its purchasing power nationally, Andrews said. Even though School of Medicine faculty receive more NIH funding than most medical school faculty, the net negative growth has still presented the School of Medicine with budget challenges.
"Other schools have budgets that are more dependent on student tuition and donations from philanthropy," Andrews said. "But for us, the economic downturn started when the NIH budget each year failed to keep up with inflation."
Andrews, however, is optimistic that financials will soon improve for the medical school. President Barack Obama's proposed stimulus package would increase NIH funding, which will help the medical school compensate for its decreased returns on long-term investments and endowments, she noted.
Applications to medical schools nationwide have decreased for the first time in eight years, according to the Association of American Medical Colleges. But Duke has received about 5,000 applications, which is typical for a given year, said Dr. Brenda Armstrong, director of admissions at the School of Medicine.
Although the School of Medicine's financial aid has not been impacted, there may be greater demand for grants at a time when the school's resources are constrained, Stacey McCorison, director of financial aid at the medical school wrote in an e-mail. Still, the school will continue to offer the same type of grant and loan programs next year, she said.
"Our student debt is only two-thirds of other medical schools'," Andrews said. "Already, our students graduate with much less debt than the average across the country, and we are going to protect financial aid even in spite of financial times."
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