| STRATEGIC INVESTMENT PRIORITY: COLLEGE OF MEDICINE |
 enn 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 half a million patients each year. Since its first
graduating class over 30 years ago, more than 3,000 physicians and 500
scientists have graduated from the College. Student interest remains
exceptionally strong, with 4,800 applicants for an entering class of 120.
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 (March, 1999) 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 an urban area, and the only one between Pittsburgh and Philadelphia. In 2001-02, the Medical Center admitted over 21,000 hospital patients, saw more than 53,000 people in its emergency and operating rooms, and served over 594,000 people through its clinics. The Medical Center has the only children’s hospital in central Pennsylvania, serving the needs of more than 3,000 critically ill children each year. It is the only level-one trauma center and the only poison |
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control center in the region. 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 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. Historically, the College of Medicine has received a much smaller share of its operating budget from Commonwealth appropriations than any similar university medical center in the nation. Penn State’s appropriation for medical education, which is $5,044,000 for 2002-03, has for several years ranked 75th out of 75 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. |
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| 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 support the College of Medicine in the absence
of an adequate state appropriation. The Medical Center’s annual operating margin, or the income generated over actual expenses, has |
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| historically provided the funds to
support medical education. In 1997-98, the operating margin was 8.8 percent,
and 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 2002-03 is projected to be just 4.0
percent, and the Medical Center will be able to transfer only $19,850,000 to
support the College of Medicine. Within three years, it is projected that
hospital operations will no longer be able to support the College of
Medicine. To meet the challenge of decreased funding over the past three years, the College of Medicine has had to increase medical tuition for Pennsylvania resident students by $6,734, or 39 percent. The current annual tuition for resident medical students is $23,910. (Non-resident students pay $33,240.) 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 almost 20 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 2003-04, and again in 2004-05 and 2005-06, 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. |
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