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Board looks ahead to long-term projects

This weekend’s Board of Trustees meeting focused on reconciling ambitious projects with financial realities.

The Board heard a series of updates about various Duke projects at home and abroad at its final meeting of 2011. The Board also voted on two action items, approving both the first degree program to be offered at Duke Kunshan University and renovations to the Gross Chemistry Building. Improved economic conditions allowed the Board to consider large-scale undertakings in a “forward-looking” meeting, Board Chair Richard Wagoner said. The Board took a strategic look at Duke’s future—particularly Duke Medicine.

“The health care changes in the next five to 10 years are huge,” said Wagoner, former president and CEO of General Motors Corp. and Trinity ’75. “The business model of the health system… is now going to be under pressure. ”

In his presentation to the Board, Dr. Victor Dzau, chancellor for health affairs and president and CEO of Duke University Health System, said DUHS must redesign the way it cares for patients. Dzau also recommended expanding DUHS’s network of physicians and working closely with insurance companies to streamline costs. Although DUHS will end the year on a positive financial note, Dzau said this may not be the case as early as 2014, given national changes in health care.

“We have to be ready for a very different environment, where our resources are more constrained,” Dzau said.

Through a process Dzau called Duke Medicine Enterprise wide planning, Duke Medicine will use the next six months to strategically plan. It will instate four committees—focusing on clinical alignment, optimizing research, redesigning education and prioritizing areas of distinction.

“If we get all these things right—and I have confidence that we will—we can become more efficient while maintaining our excellence,” Dzau said. “If we do that, we will be in much better shape than most places.”

Capital planning

Executive Vice President Tallman Trask outlined Duke’s various capital projects—both completed and in the works— to Board members. The list of desired projects is always greater than available funds, Trask said, adding that the University is striving to solicit donations that match specific priorities.

“Realistically, you can’t escape the fact that there’s no free lunch,” Wagoner said.

The Board also approved renovations to the first and second floors of the Gross Chemistry Building. The renovations have a working budget of approximately $20 million and will take about one year to complete, Trask said. The Board also discussed the selection of an architect for the West Union Building renovations, which are slated to begin July 2013. The University hopes to choose an architect and draw up preliminary plans by the next Board meeting in February.

The Board also reviewed conceptual plans for the events pavilion, which will serve as a temporary dining facility and student center during West Union renovations. The pavilion will be funded by the University and will likely cost less than $5 million.

The West Union Building renovations and other pending structural changes to the University, such as the Spring opening of Keohane Quadrangle 4E, will help shift student life to the McClendon and Keohane area, said Steve Nowicki, vice provost and dean for undergraduate education.

Nowicki and Vice President for Student Affairs Larry Moneta led a discussion on the undergraduate experience that highlighted next year’s house model, which is meant to make the housing system more equitable for students.

“In our current residential system, there is an extraordinary imbalance with a small subset of students—about 30 percent have a privileged space, and the other students are treated like hermits and nomads,” Nowicki said. “It changes the social capital.”

Demand in China

The Board approved the year-long Masters of Management Studies degree program for DKU, spearheaded by the Fuqua School of Business. The program will matriculate its first class in 2012 and operate on pilot basis for three years before being formally reviewed, Provost Peter Lange said.

The MMS degree complements the already established MMS Foundations of Business degree in Durham, making it particularly appropriate to introduce as the premiere academic program in China, Lange said. Students, who will spend the Summer and Fall in Durham and Spring in China, will receive degrees from Duke—not DKU.

Lange said the program is likely to be successful because of the high interest in the Durham-based degree from Chinese students.

“We believe in the Chinese market, given the rapid expansion of the economy, there would be a lot of demand for people with business training right after they finish their undergraduate degree,” Lange said.

William Kirby, T. M. Chang professor of China studies at Harvard University and Duke’s senior adviser on China, presented on the historical progression of higher education in China and why DKU is important to Duke.

“Every major university in this country has faculty who are increasingly active in China,” Kirby said. “China has not only the largest and most rapidly growing system of higher education in the world, but is rapidly growing in quality, too.”

Kirby also addressed some Trustees’ concerns about academic freedom, citing his own experiences in Chinese education.

“[Kirby] was able to give people a lot of comfort,” Wagoner said. “No one is naive to the prospect that there are differences [between the U.S. and China], but [Kirby] gave us confidence that this can be managed in a way that meets the legitimate concerns of some of the [Trustees and faculty members].”

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