AAMC's Letter to OSTP on the Presidential Review Directive
(PRD)
[On January 26, 1997 AAMC received a letter from Clifford
Gabriel, then Acting Associate Director for Science
in the
Office of Science and Technology
Policy in the Executive Office of the President, requesting
AAMC's views on the status of the government-university
partnership and soliciting recommendations to strengthen
that partnership. This request was related to the Presidential
Review Directive issued by President Clinton on September
26, 1996. The following is AAMC's August 15, 1997 response
to Dr. Gabriel's letter.]
August 15, 1997
Clifford J. Gabriel, Ph.D.
Acting Associate Director for Science
Office of Science and Technology Policy
Executive Office of the President
Room 432 Old Executive Office Building
Pennsylvania Avenue and 17th Street N.W.
Washington, DC 20502
Dear Dr. Gabriel:
Thank you for your letter of June 26 soliciting the views
of the Association of American Medical Colleges on the status
of the government-university partnership. As you may know,
the AAMC maintains a vast reservoir of data on the research,
educational and patient care delivery activities of medical
schools and teaching hospitals that may be of value to you
and your colleagues. I invite you and other members of the
Interagency Task Force to contact the Association with specific
data and analytic requests as your study progresses. In the
meantime, I am pleased to provide the following general comments.
Any discussion of current stresses on government-university
interactions should not overshadow the generally positive
nature of the relationship between these two sectors and its
enormously productive history. Indeed, it is precisely because
of the tremendous benefits to society that have accrued from
this historic relationship that the recent record of steadily
increasing stresses is proving so worrisome. The federal investment
in university-based research since the end of World War II
has produced unprecedented new scientific knowledge that has
improved both the quality and length of life and contributed
directly to America's economic prosperity. Largely based on
the vision of federal scientific leaders such as Dr. Vannevar
Bush, and the remarkably consistent generosity of Congress,
America's government-university partnership has created an
expanding network of research intensive universities and academic
medical centers, a sizeable increase in our scientific and
technical workforce, and scientific world leadership for the
United States. The expanding research base has generated a
persistent demand for federal resources, which has grown faster
than the supply afforded by a constrained federal budget,
and this has been the source of much of the stress on the
government-university partnership.
We necessarily must limit our comments to the environment
we know best - medical schools and their teaching hospital
partners. The 125 accredited allopathic medical schools are
the recipients of more than 53 percent of all extramural awards
from the National Institutes of Health - a total of $4.5 billion
in fiscal year 1996. This is compared to $2.0 billion in fiscal
year 1984. The growth of research capacity and the concomitant
expansion in numbers of research personnel were largely spurred
by overt federal policies and, importantly, by confidence
in the university community that the "rules of the game,"
that is, the federal policies and regulations governing federally
sponsored research, would remain consistent and predictable.
For a variety of reasons, but largely driven by the demand/supply
imbalance for federal research funds, academe's expectation
of dependable federal "rules of the game" has not
been met.
Ensuring a scientifically vibrant and productive research
enterprise in a time of constrained, if not contracting, federal
discretionary spending is the challenge ahead.
We believe that three priority issues need to be addressed
to strengthen and solidify the government-university partnership
and re-introduce a sense of stability in the business climate
for research.
- The fundamental assumptions underlying federal sponsorship
of university research need to be reaffirmed.
- The terms of the partnership need to be stabilized.
- The federal government needs to strengthen mechanisms
of consultation and dialogue that allow it to broaden its
perspective in order to evaluate better the aggregate, cumulative
and unintended consequences of incremental (and seemingly
continuous) changes in federal policies.
The fundamental assumptions that define the government-university
partnership have begun to dissolve as cost accounting strategy
has replaced science policy as the philosophical driver of
the relationship. Incremental changes in grant policy have
moved us ever closer to the procurement model of government
funding than the near-full cost-based reimbursement model
that ruled during the most productive and stress-free years
of the government-university relationship. To some extent,
the inflexible accountability factors that make the procurement
model so seductive for federal policy makers are the very
same attributes that tend to stifle research creativity and
productivity in the academic setting. A national forum must
be identified that can reaffirm the set of fundamental principles
that should guide a true partnership relationship and restore
trust in the durability and dependability of that relationship.
A paramount objective of these efforts must be to solidify
the basic rules governing the government-university partnership.
The past few years are littered with examples of the federal
government's unilateral shifting of the terms of the government-university
relationship, often using cost accounting as the weapon. Seemingly
endless changes in OMB Circular A-21, including capping the
recovery of administrative expenses while at the same time
steadily increasing the administrative burden of meeting expanding
regulatory and reporting requirements, simply transfer costs
to the awardee institutions. For several years, a variety
of institutional resources at medical schools, most especially
surplus clinical revenue, allowed our institutions to absorb
these costs. As new models of health care financing have come
to dominate the marketplace, discretionary clinical income
available for academic investment is evaporating and with
it the capacity of medical schools to withstand these cost
shifts.
Other cost shifting efforts include capping salary levels
reimbursable by NIH grants below the actual salaries paid
to investigators, limiting pre- and post-doctoral stipends
on fellowships and training grants below the levels many institutions
must pay to remain competitive, capping recovery from federal
grants of graduate student tuition costs below that charged
by many institutions, and eliminating the Biomedical Research
Support Grant mechanism, which was targeted specifically to
support institutional research capacity. New proposals to
limit recovery of costs of facilities construction, as well
as operation and maintenance costs, are pending without (to
our knowledge) any credible, data-driven analysis modeling
the impact of the new proposals on universities and schools
of medicine. Special studies, which have in the past been
accepted by the government to deal with the fair allocation
of certain facilities costs incurred in the joint product
environment of research and training, are out of favor; but
the default formulas specified by A-21 are often inherently
illogical and unfair, and the proposed modifications of those
formulas of which we are aware are inadequate responses to
this problem.
Another illustrative example of how the federal government
has unilaterally shifted the terms of the partnership has
to do with the HHS Office of Inspector General Physicians
at Teaching Hospitals (PATH) initiative. Since June 1996,
OIG auditors have been reviewing the records of dozens of
teaching hospitals to see if teaching physicians complied
with the requirements of Intermediary Letter-372, and whether
clinical service charges were coded to reflect the level of
services indicated by the medical record. There is a general
belief in the teaching hospital community that the documentation
standards being applied by the auditors bear little or no
relation to the standards understood by physicians and hospital
administrators, and accepted by their respective intermediaries,
at the time those services were delivered. Even policy makers
at agencies responsible for the program agree that the standards
were unclear at best. The ongoing PATH audit process has further
weakened the trust that must underlie federal – university
initiatives.
The cumulative effect of such cost shifting and rule changing
is to make long term investments by research institutions
in research and training capacity an increasingly risky gamble.
Capacity once degraded cannot be rebuilt quickly, if at all.
The policies governing the relationship and the rules that
follow must be stabilized to allow the risks to universities
of such enormously expensive, long-term undertakings to be
measured with confidence and certainty.
Lastly, the broad vision formerly exhibited by federal policy
makers seems to have disappeared. The tripartite mission of
medical schools and their teaching hospital partners to conduct
research, to teach, and to provide patient care often seems
beyond the grasp of some in the federal government. Enormous
amounts of energy are wasted trying to categorize faculty
and students into research, teaching, or patient care slots
in defiance of their ineluctable interdependence, seemingly
because of ignorance of, or apathy to, the multiple missions
of academic medicine. Federal policy makers seem unable to
realize that changes in the financing of any one medical school
or teaching hospital mission can have devastating impacts
on the other public goods provided by these institutions,
which are highly valued by the both the government and the
public. The federal government needs to find mechanisms that
will allow it to broaden its view and rediscover its understanding
in an effort to weigh better the consequences of proposed
federal policies.
As I mentioned, the AAMC stands ready to make its data and
analytical resources available to the Interagency Task Force
at your request. I am enclosing a number of recent studies
conducted by the AAMC that you may find of interest.
Sincerely,
Jordan J. Cohen, M.D.
President,
Association of American Medical Colleges
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