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UH plan calls for $14M for medical school, cancer center

  • STAR-ADVERTISER / 2013
    The Cancer Center has a nearly $10 million deficit and is draining its reserves to stay afloat.
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The University of Hawaii at Manoa risks losing accreditation for its medical school and the federal research designation for its cancer center unless UH can plug an approximately $14 million budget hole over the next year, according to a proposed business plan made public Friday.

The proposal, which seeks to lay out budget scenarios for the combined operations of the medical school and financially troubled Cancer Center, says state funding for that gap is likely the “most cost-effective” option to keep the center’s federal designation and maintain community service and economic benefits.

The report cautions that sustaining future operations at both institutions could prove more expensive for UH and the state if the center were to lose its National Cancer Institute designation, which earmarks millions of dollars in federal grant research for UH.

“Without additional mission-based support for faculty salary coverage equal to $3.6 million for the (medical) school and $10.5 million for the Cancer Center in fiscal year 2017, the school will lose its medical school accreditation and the center will lose its National Cancer Institute designation,” the report said.

“It is imperative upon the campus and UH leadership to work with the state Legislature, teaching hospitals and local industry to close this remaining mission-based operations gap,” the report said.

Under a preferred business model that keeps the center’s NCI designation, the consolidated “Kakaako Health Campus” would require approximately $13 million a year in additional support to cover annual core expenditures of roughly $45 million.

Under an alternative scenario where the Cancer Center loses its NCI designation, the additional funding needed would drop to $9.4 million next year and $6.6 million the following year. The report estimates the Cancer Center would see a personnel decline of 30 percent to 50 percent, or a loss of more than 100 to 150 jobs due to layoffs and attrition, under that alternative.

Earlier this year, a UH task group completed a review of operations at the Cancer Center and concluded the research facility’s business model is flawed. It said the center is running a deficit of approximately $9.5 million a year.

The center’s money troubles stem from an old business plan that assumed UH’s share of the state cigarette tax would remain steady at nearly $20 million a year to fund operations. Under former Director Michele Carbone, the center pursued building a new, $100 million facility in Kakaako using that flawed business plan, which has saddled the center with an $8 million annual mortgage payment it can’t afford.

UH-Manoa Chancellor Robert Bley-Vroman in February initiated plans to reorganize the Cancer Center as a so-called organized research unit within the John A. Burns School of Medicine. The center has been a stand-alone operation with its own faculty and administration, but the campuses sit across from each other.

The chancellor tasked Dr. Jerris Hedges, JABSOM dean and interim director of the center, to lead the effort on a new business plan for the consolidated operations.

“The UH Cancer Center is being administratively incorporated into JABSOM to improve efficiency and effectiveness of both units,” Bley-Vroman said in a statement Friday. “I will be convening a group of external reviewers to assist in identifying additional opportunities and developing next steps for a thriving Kakaako Campus that serves the people of Hawaii.”

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