Revenue concerns recently led the California legislature to cut the University of California (UC) budget by $813 million in the fiscal year ending August 31, 2010. Some of that cut was absorbed by the medical schools in California, and rheumatology divisions were no exception. What the long-term effects will be on clinical care, teaching, and research is a major concern for the state’s leaders in rheumatology training.
In order to meet the budget shortfall, the regents of the UC system ordered a furlough of state-paid employees. The depth of the cut depended on the person’s salary—the higher the salary, the greater the percentage that had to be saved using unpaid time off.
Furloughs Ordered
“The way it worked, furloughs were scaled based on salary, with the highest earners potentially losing more, up to 10% of their state-funded pay at the highest levels,” says Arthur Weiss, MD, PhD, professor and chief of rheumatology at the UC campus in San Francisco (UCSF). “However, only about 9% of the medical school at UCSF budget comes from the state with the vast majority coming from research grants or professional fees earned through patient care. A large part of the furlough penalty could be offset by these other sources.”
Take, for example, a faculty member making $160,000 a year. Of this figure, suppose that comes 90% from research grants or professional fees and is exempted from the furlough. This doctor’s salary reduction under the furlough program was 10% of the portion of the $160,000 coming directly from the California state budget. This, along with a mandate from the regents that the cuts were not to impact classroom teaching or medical care, meant that there were many differences or inequities in how the cuts were actually implemented.
The budget line that would take the biggest hit financially was in the area of research. “With clinical and classroom activities exempted, all of the furloughs have to come from a faculty member’s research time,” says Gary S. Firestein, MD, professor of medicine and chief of rheumatology, allergy, and immunology at UC San Diego. “This is quite difficult, though, when research grants are actually paying the salaries, and we have to reconcile the fact that we have given less time to the research.”
Nonfaculty Staff Cuts
Among those nonfaculty areas taking the biggest cuts were employees in administration and administrative assistants in clinical areas. These are the places where the workers have the highest percentage of pay coming directly from the California budget.
“The staff supporting academic programs were impacted the most,” says Dr. Weiss. “Secretaries, administrative assistants, people in central administration, and the MD administrators such as deans saw a higher percentage of their pay disappear because they rely on state support.”
“This has raised a number of problems administratively and within various parts of the program,” he says. “You have all of these incongruities that are very difficult to manage administratively. For instance, you can have two people doing essentially the same job, yet one person is furloughed and another isn’t, based on the source of their salary. This causes not only confusion but also inequities based on where a person’s pay comes from.”
Dr. Firestein says he has not yet lost support staff because of these issues, but that these employees are frustrated and understandably unhappy.
The fact that the furloughs are not being coordinated university wide has added to the confusion. For example, Dr. Firestein was concerned that some offices, such as the one that deals with contracts and grants, would be closed during the times faculty are trying submit grants with firm deadlines.
The staff supporting academic programs were impacted the most. Secretaries, administrative assistants, people in central administration, and the MD administrators such as deans saw a higher percentage of their pay disappear because they rely on state support.
—Arthur Weiss, MD, PhD
Clinical Experiences Intact
So far, clinical experience for the students has not been affected by the budget cuts. All the division chiefs note that medical center staff such as nurses and technicians are not included in the furloughs. Strong business results mean that there has been no need to cut back on patient census, and no units have been closed. There is also concern about the future and how the healthcare bills currently before Congress might change the medical centers’ ability to use this as a funding source.
Another worry is whether research funding will continue to be available to fill in budget holes. “If you don’t have a grant expiring in the next year or two, you should be protected in the interim,” says Dr. Weiss. “Eventually we will have to replace expiring grants, and when you have NIH [National Institutes of Health] paylines of 6–8%, you have to worry about the future of research dollars and the stability they have given us so far.”
There are some early signs, however, that research money already granted may not come through at the levels initially promised. There have been notifications from the NIH that stimulus grants will not be funded at the levels first indicated—some cuts were as high as 30–40%. What additional problems this may cause is still very much an unknown.
Retention and Recruitment
A long-term concern voiced is faculty retention and recruitment. Bevra Hahn, MD, professor of medicine and chief of rheumatology at the David Geffen School of Medicine at UC Los Angeles has already lost a well-respected faculty member and is very worried about other universities hiring away her people if the budget cuts continue past their current expiration at the end of California’s fiscal year.
“We are having cuts in salary while requiring higher performance standards in terms of additional patient services,” she says. “So you are being told to do more while you are being paid less. Why wouldn’t someone go where things are not so dire?”
Although retention is a concern, Dr. Hahn feels that recruitment is where California’s state-supported medical schools may suffer the most in the longer term.
“Academically, we can’t even look at a young person who is not bringing enough grant money with them to completely support themselves for at least three years,” she says. “That is a very rare and highly sought-after person.”
Budget constraints also have an effect on the ability of many programs to properly support junior faculty members without their own sources of funding. The schools used to be able to supply support staff to the younger faculty members until they could get published and begin to generate their own grant money. This is no longer a given in the current fiscal climate.
The budget concerns are only adding to the problems that were already faced by California schools in general. “Living in California, and especially in San Francisco, is so expensive,” notes Dr. Weiss. “Our junior faculty cannot easily afford housing and will eventually make choices on where they are going to live based on the economic realities. If it is hard to raise your salary here because of constraints on research dollars or pressures in the clinic, eventually people will go elsewhere.”
Fellows and Residents Spared
Graduate medical education was spared from cuts to the fellows and residents in the rheumatology programs. Nonstate funding sources such as Veterans Administration money and NIH training grants meant no cuts in pay; in fact, some actually saw an increase in salary.
“The problem we are seeing among these people is getting jobs when they graduate,” says Dr. Hahn. “Many practices in the community are not recruiting because they have financial concerns of their own. If you want to practice in the community, how are you going to get a loan to start a practice under current conditions?”
Tuition Increases
Although the cuts in California funding have gotten much of the attention, all three leaders interviewed for this article agree that the biggest future impact on rheumatology in the state will not be related to staff. Instead, the 30% increase in tuition for medical students may lead to fewer people deciding to choose rheumatology as their postgraduate specialty.
“As students assume more debt, they will make choices driven by the need to pay it back,” says Dr. Weiss. “Changes in payment for rheumatologists may mean we are not as well compensated financially. Although rheumatology remains very rewarding professionally and personally, at some point, students with a higher level of debt will make career choices based on what is economically sound for them in their situation.” It is possible, perhaps even probable, that some who might have chosen rheumatology with less debt will now go into other specialties, such as those that are more lucrative.
Nobody really thinks that these problems will go away with the end of the current fiscal year. How the university hierarchies and the state legislature decide to implement next year’s budget may hold the key to how badly medicine in general—and rheumatology in particular—is hurt in the future.
“If the furloughs are short lived, I don’t think there will be a long-lasting effect,” says Dr. Firestein. “Currently there is a light at the end of the tunnel. If cuts like these continue after August 31, we are jeopardizing the future of the university.
“However, if the response is to continue with furloughs and similar measures to make up the shortfall, people will end up taking appointments at places where they aren’t faced with these concerns,” Dr. Firestein continued. “The way they manage the issues going forward will impact on how rank-and-file faculty and staff see the future of UC and their own future at UC.”
Kurt Ullman is a freelance writer based in Indiana.
