1. DEPARTMENT OF MEDICINE RESEARCH RETREAT Richard A. Walsh, MD John H. Hord Professor and Chairman of Medicine Case Western Reserve University Physician-in-Chief University Hospitals February 9, 2013 Case Medical Center Case School of Medicine Case Research Institute University Hospitals UH Medical Group University Hospitals at Case Medical Center is the primary affiliate of Case Western Reserve University School of Medicine. Financing the Research Mission: the Future of Federal Funding

2. 02/09/13University Hospitals Case Medical Center/Case Western Reserve University2 “…THE MANDATE OF THE CHAIRMAN OF MEDICINE IS TO DEVELOP A BALANCED PROGRAM OF TRAINING AND RESEARCH TO ASSURE THE HIGHEST QUALITY OF PATIENT CARE IN THE BROAD FIELD OF INTERNAL MEDICINE. …HE MUST ACCOMPLISH ALL OF THIS DESPITE SHRINKING SUPPORT FROM THE MEDICAL SCHOOL, HOSPITAL AND FEDERAL SOURCES WHILE EXPENSES ESCALATE” Eugene Braunwald, MD 1982

3. 02/09/13University Hospitals Case Medical Center/Case Western Reserve University3 US BIOMEDICAL RESEARCH IN 2012 100 BILLION DOLLAR ENTERPRISE –65% BY INDUSTRY –30% BY GOVERNMENT (NIH) –5% CHARITIES, FOUNDATIONS, INDIVIDUALS, ENDOWMENTS 50% OF ALL ECONOMIC GROWTH IN THE PAST CENTURY TRACED TO MEDICAL RESEARCH (MILKEN INSTITUTE) 30% OF RESEARCH FUNDING IN MEDICAL SCHOOLS ORIGINATES IN THE DEPARTMENT OF MEDICINE

4. 02/09/13University Hospitals Case Medical Center/Case Western Reserve University4 THE PROBLEM: THE PERFECT STORM NIH SUPPORT DECLINING INDUSTRY SUPPORT DECLINING PHILANTHROPIC SUPPORT UNDER PRESSURE HOSPITAL SUPPORT UNDER PRESSURE PROFESSIONAL FEE SUPPORT NEGLIGIBLE ENDOWMENT INCOME RESET POST RECESSION PUBLIC SUPPORT AND TRUST ERODING

5. 02/09/13University Hospitals Case Medical Center/Case Western Reserve University5 FEDERAL FUNDING FOR BIOMEDICAL RESEARCH – SOME SOURCES NATIONAL INSTITUTES OF HEALTH VETERAN’S ADMINISTRATION DEFENSE ADVANCED RESEARCH PROGRAM AGENCY (DARPA) NATIONAL SCIENCE FOUNDATION DIRECT CONGRESSIONAL EARMARKS ACA RELATED PROGRAMS (eg PCORI)

6. 02/09/13University Hospitals Case Medical Center/Case Western Reserve University6 POTENTIAL SOLUTIONS: SCHOOL OF MEDICINE TRANSPARENCY REGARDING FUNDS FLOW TO DEPARTMENTS ALLOCATION OF FINANCIAL RESOURCES BY MERIT (eg INDIRECT COST RECOVERY, DEAN’S TAX, HOSPITAL SUPPORT) ROLE OF BASIC SCIENCE DEPARTMENTS IN THE TRIPARTITE MISSION PERIODIC TOP DOWN BOTTOM UP RESEARCH STRATEGIC PLAN PARTNER EFFECTIVELY WITH DEPARTMENTS AND CENTERS IN PHILANTHROPY AND TECH TRANSFER SUPPORT EXCELLENCE vs SUBSIDIZING STATUS QUO

7. 02/09/13University Hospitals Case Medical Center/Case Western Reserve University7 NIH CHALLENGES NIH BUDGET IS A LINE ITEM IN ANNUAL FEDERAL BUDGET/NOT AN ENTITLEMENT THUS AN EASIER TARGET FOR CUTS (UNLIKE CMS,SS) 10% CUT IN SALARY CAP INCREASED EARMARKS WITHIN THE NIH BUDGET BY CONGRESS/NIH LEADERSHIP POST DOUBLING, POST ARRA EFFORTS US ECONOMIC GROWTH EXPECTED TO BE 2% OF GNP RATHER THAN 4% POST 2008 RECESSION

8. 02/09/13University Hospitals Case Medical Center/Case Western Reserve University8 POTENTIAL SOLUTIONS: DEPARTMENT OF MEDICINE FOCUS: THE WELL ROUNDED PERSON HAS NO POINT BUSINESS PLANS WITH CAREFULLY ESTIMATED RETURN ON INVESTMENT FOR RECAPITALIZING EXISTING OR NEW PROGRAMS INTERNAL AND EXTERNAL ADVISORY COMMITTEES WITH FOCUS ON PHILANTHROPY EMBRACE AND DEVELOP CENTERS/SERVICES LINES WITH DIVISION CHIEF LEADERSHIP

9. 02/09/13University Hospitals Case Medical Center/Case Western Reserve University99 It is not the strongest of the species that survives, nor the most intelligent. It is the one that is the most adaptable to change. ~Charles Darwin

10. 02/09/13University Hospitals Case Medical Center/Case Western Reserve University10 Reduced Funding Decentralized Data Lack of Collaboration Research Mission Retrenchment ScenarioGrowth Scenario Integration of data among three missions – centralized database Collaboration with industry and other health systems Centers of excellence Commercialization and brand capitalization

11. 02/09/13University Hospitals Case Medical Center/Case Western Reserve University11