STRATEGIC INVESTMENT PRIORITY:
MEDICAL EDUCATION


Penn State’s College of Medicine and The Milton S. Hershey Medical Center are important statewide resources, training many of Pennsylvania’s physicians and providing the highest level of health care to more than a half million patients each year. Since its first graduating class over 30 years ago, more than 3,000 physicians and 700 scientists have graduated from the College. Student interest remains exceptionally strong, with 5,600 applicants for the entering class of 135. Nationally, one out of every seven applicants to medical school in the United States applies to Penn State’s College of Medicine. It is recognized by U.S. News and World Report as one of the top medical schools in the country for primary care, which includes family practice, general internal medicine, and general pediatrics.

The Milton S. Hershey Medical Center is the only academic medical center in Pennsylvania not located in a major metropolitan area, and the only one between Pittsburgh and Philadelphia. In 2003-04, the Medical Center admitted over 23,000 hospital patients, saw more than 63,000 people in its emergency and operating rooms, and served over 697,000 people through its clinics. The Medical Center has the only children’s hospital in central Pennsylvania, serving the needs of more than 3,800 critically ill children each year. It is the only level-one trauma center. These services would not be available to residents of a large part of the state without the expertise of physicians associated with the College of Medicine. The College of Medicine has been the provider for the statewide Area Health
Education Centers (AHEC) program since its inception in 1994. Penn State coordinates eight regional groups around the state to facilitate the recruitment and retention of primary care providers in under-served communities. These efforts demonstrate Penn State’s unique commitment to build
Penn State’s Milton S. Hershey Medical Center was founded in 1963 with a $50 million gift from the M. S. Hershey Foundation. Shown here is the College of Medicine building under construction — circa 1967.
education programs in the health professions including medicine, nursing, and allied health in every corner of the state. In addition, the College of Medicine produces the largest number of practicing primary care physicians of any medical school in the Commonwealth.
 
The Milton S. Hershey Medical Center complex — circa, 1972. Since admitting its first class in 1967, Penn State’s College of Medicine has graduated more that 3,000 physicians.

Historically, the College of Medicine has received a much smaller share of its operating budget from Commonwealth appropriations than any university medical center in the nation. Penn State’s appropriation for medical education, which was $4,829,000 for 2004-05, has for several years ranked 76th out of 76 public medical schools in the United States - dead last. The average appropriation for other medical schools
is now approaching $50,000,000. One result of Penn State’s inadequate state appropriation is that the College of Medicine has had to rely on Medical Center revenues to provide support for medical education.

Nationally, academic medical centers are facing severe fiscal constraints brought about by the Balanced Budget Act of 1997, which has resulted in declining reimbursements from Medicare and Medicaid, and from changes in managed care. The impact of these trends on Penn State is that The Milton S. Hershey Medical Center can no longer generate a sufficient operating margin from clinical revenues to meet its own needs for capital investments while supporting the College of Medicine in the absence of an adequate state appropriation.

In 1997-98, the Medical Center was able to provide academic support of $42,540,000 to the College of Medicine. Because of the declining reimbursements and managed care changes, the operating margin for 2004-05 is expected to be such that the Medical Center will be able to transfer only $20,000,000 to support the College of Medicine.

To meet the challenge of decreased funding over the past five years, the College of Medicine has had to increase medical tuition for Pennsylvania resident students by $10,710, or 62 percent. The current annual tuition for resident medical students is $27,886. (Non-resident students pay $38,768.) It has also had to reduce investments in medical research, restrict salary increases for faculty and staff, reduce or defer facilities renewal investments, and cut departmental operating budgets by over 18 percent. At the same time, the Medical Center has had to deplete its operating margin to provide even the reduced academic support payments to the College. Therefore, it has not been able to support critically needed investments in the clinical enterprise of the Medical Center.

The world-class medical education available through Penn State’s College of Medicine is in serious jeopardy. The University is requesting an increase of $10,000,000 for 2005-06, and again in 2006-07 and 2007-08, for a total increase of $30,000,000 in the base appropriation for the College of Medicine. This will represent an important strategic investment in the health and well being of the citizens of the Commonwealth of Pennsylvania.
     



An 1893 baseball game at Old Beaver Field, which also hosted intercollegiate football and track events.

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