July 30, 2001

The Board of Trustees has approved a $471.9 million budget for the Health Center for fiscal year 2002, a budget that represents a 9.3 percent increase and forecasts ending the fiscal year in balance.

But the Health Center continues to face a difficult fiscal environment, Dr. Peter J. Deckers, executive vice president for health affairs told the trustees during a meeting June 26.

"The past two years have been a tremendous challenge," he said. "I am proud of how the entire Health Center community responded, but the truth is that the next 18 to 20 months are going to be as challenging as the past 20 months."

In support of the estimated $471.9 million in expenditures, $377.3 million in revenues are anticipated. With the state appropriatio n of $74.6 million and state fringe benefit support of $20 million, the Health Center's budget for FY 02 - which began July 1 - is projected to be balanced.

Bright spots in the past year include:

• Federal research grants increased by 16.7 percent to $44.3 million.
• Other research grants and contracts increased by 19.7 percent to $20.4 million.
• New patient care revenues increased by 13.4 percent to $190.2 million.

"When you consider where we were a couple of years ago and reflect on the substantial progress that has occurred at the Health Center, the current situation is a significant achievement," said President Philip E. Austin. "I know that it is the result of the hard work of many faculty and staff and I want to compliment all involved."

The trustees' Health Affairs Committee unanimously approved the budget June 19 and sent it to the full board, which approved it June 26.

"There's so much that's been accomplished that we now have a solid foundation upon which to move forward with our strategic initiatives," said Claire R. Leonardi, chair of the Health Affairs Committee.

Deckers led the Board through the budget and talked about institutional goals, the strategies to be undertaken to achieve these goals, and the budget arrangements to support the various strategies.

The signature programs, a strategic plan to develop programs that maximize the Health Center's research and clinical assets, figured prominently in the discussion. The signature programs include Genetics/Immunology and Cancer, Brain and Human Behavior, Bone Biology and Musculoskeletal Disease, and Connecticut Health. The budget allocated $2.9 million in internal funding to sustain them.

Deckers pointed out that despite the lack of targeted state support for the strategic plan and the signature programs, they were, and would continue to be, Health Center priorities.

He observed that the faculty recruited under the strategic plan have contributed significantly to the growth of grant funding - which he called "our success story" - during the past several years. "We have an outstanding community of faculty to make this happen," he said.

But despite the growth of certain revenues and grants, cost savings, continued financial restraint, and improvements in finance and management operations, Deckers said he remains concerned about the future:

"The national health care financing situation is no better - in fact, it's worse than it was 20 months ago - and there is no relief on the horizon," he said. "We do not know what will happen on the revenue side."

At the same time Deckers noted that the new budget does not provide support for the Health Center's strategic plan and does not supply funds from the new state pool to help hospitals.

"We've worked hard and we've bought some time, but we haven't yet secured a future," he said. "Without increased funding, we won't be able to meet the state's expectations for new doctors and dentists, great health care and growing research that brings investment into the state and promotes economic development."

Pat Keefe