KU News Release

Dec. 11, 2006
Contact: Lynn Bretz, University Communications, (785) 766-8616.

Chancellor Hemenway’s testimony to Joint Committee on Legislative Budget

TOPEKA — The following is University of Kansas Chancellor Robert Hemenway’s prepared testimony for today’s hearing of the Joint Committee on Legislative Budget at the Statehouse in Topeka.

Mr. Chairman, I appreciate the opportunity to share with you my perspective on the efforts of the KU School of Medicine and the KU Hospital Authority to work together to best supply medical care and medical education to the citizens of Kansas.

Shared Goal of Excellence

As vice chairman of the Hospital Authority Board and chancellor of the university, I can assure you that neither the hospital nor the School of Medicine take lightly this responsibility.

Because we take these responsibilities so seriously, University of Kansas doctors, nurses and allied health workers care passionately about their ability to fulfill this mission. Everyone wants KU to achieve a modern medical system known throughout the nation for its quality and accomplishments.

That is our goal and our question: How do we make the KU Medical Center, in all of its parts — its teaching hospital, its faculty and staff, its allied health schools, its medical school, its research sites — an institution of the “finest possible quality.” Although we share this strong common goal, we do not always have common agreement about how to achieve it, and we continually search for monetary resources to fund it. This combination of mission and money is why you see multiple views expressed when faculty debate these issues.

Academic medical centers are among the most complicated and inspiring institutions in American society. Because we have academic medical centers, we are blessed with a soaring life expectancy, declining infant mortality and growing control of infectious diseases. The contributions that the KU Medical Center makes to the well-being of Kansans is summed up in a simple fact. Approximately 50 percent of the physicians practicing in Kansas are graduates of the University of Kansas Medical School or trained here as residents. It may also interest you that the KU School of Medicine ranks No. 1 in the country in the percentage of graduates choosing a family medicine residency.

Success of Hospital and School of Medicine

Since June, representatives of the University of Kansas Medical Center and the University of Kansas Hospital have been participating in discussions with Kansas City region life science leaders about how additional education and research partnerships might help us achieve a nationally recognized health sciences center. We are looking ahead and asking how KU can be among the best academic medical centers of the future.

To understand these recent discussions some history may be helpful.

Some of you were members of the legislature in 1998 when I came to you with the proposal to separate Bell Memorial Hospital from the state system and create a legal entity, the University of Kansas Hospital Authority, to operate the hospital. We knew that the hospital could not be successful under its previous governing structure because without the freedom to operate like a business it would always be at a competitive disadvantage. What seemed somewhat of a risk at the time has proven to be a wise move.

Now celebrating its first century of service, the University of Kansas Hospital has more than 3,550 employees, 465 staffed beds and 450 KU faculty physicians. The physician practice is the largest in the state and represents more than 200 specialties. The KU Hospital now has state of the art equipment, a new $77 million center for advanced heart care (a seven-story facility with 110 new beds to care for heart patients) and the region’s only level-one trauma center and burn center. Before the state gave up control of the KU Hospital in October 1998, projected losses were expected to reach $20 million to $40 million a year. The financial strength of the hospital has blossomed since that time with patient satisfaction in the 90th percentile range. That strength allowed the hospital to acquire the site of the former Sprint World Headquarters and renovate the buildings there for an expanded cancer treatment center. The expansion was necessary because cancer patient volume in the hospital has increased sharply, reaching levels not projected to occur until 2009.

As a member of the hospital authority’s governing board I can tell you that the turn around of the hospital was accomplished with a lot of hard work, excellent leadership from Irene Cumming and a drive to focus on patient satisfaction. The growth and renewal of the hospital’s fortunes have been supported by marketing campaigns which have focused on the strength the hospital enjoys because of its status as part of an academic medical center.

The KU Hospital shares a statutory mission with the University of Kansas Medical Center to advance the education of health care professionals and medical research. Currently the Hospital provides about $30 million annually in support of the medical center — much of that support in the form of fees paid for services provided by the medical center to the hospital. When the hospital was originally separated, significant support for the School of Medicine was not possible. The financial strength of the KU Hospital now makes a more robust contribution possible. Resolving what that level of support should be is a major part of the current discussions. Both Dr. Atkinson and Irene Cumming are committed to working together to finalize a partnership agreement which resolves this issue.

The hospital’s success in the last decade is impressive. So is the record of achievement within the University of Kansas Medical Center and the KU School of Medicine.

Executive Vice Chancellor Barbara Atkinson’s excellent leadership has seen the strength and reputation of the school grow.

In the past year external research funding has grown by 10 percent and NIH funding has grown an impressive 21 percent.

In the past year, the basic science faculty has grown from 147 to 159, the clinical research faculty has grown from 43 to 49 and the clinical practice faculty has grown from 289 to 304. The clinical faculty has grown by 42 in the last two years alone.

The school recently won reaccreditation for the longest term possible and it continues to innovate across all of its critical missions. A major curriculum change was rolled out this year to the incoming class of medical students and is already improving the way we train doctors to serve Kansas.

By any measure of success, the KU School of Medicine continues to strengthen its position as a life sciences leader.

There is also another successful partnership — with the Kansas Legislature. Your investment in biomedical research will soon be realized as we open the new 200,000-square-foot Kansas Life Sciences Innovation Center. This facility has been a valuable tool to recruit new scientists to our campus and to enhance the equipment and resources available to our leading scientists. You will also recall that our university’s top priority is the creation of a world class comprehensive cancer center. Your allocation of $5 million to this cause in the current budget cycle has been a critical component of building the talent and infrastructure necessary to allow us to successfully apply for National Cancer Institute designation.

The Future

Strength makes new collaborations possible.

The strength of the KU Hospital and the strength of the KU School of Medicine have reached new and unprecedented levels of success — but the leaders of both institutions are not satisfied with the status quo. The leadership teams of both institutions are committed to continue to build for the future.

They share a vision for that future that includes positioning the KU School of Medicine as a top tier research institution and positioning the KU Hospital as a competitively strong, clinically excellent and accessible institution, one that contributes to a regional and national reputation and to a partnership that will enable our cancer center to achieve NCI designation. The joint success of the hospital and the School of Medicine will, we hope, earn additional investment from private donors, corporations and foundations, perhaps as much as $200 million to $300 million.

Although both institutions have aggressive plans to achieve even higher levels of excellence, both remain committed to their core statutory mission — to enhance the health of Kansans. Under no circumstances will we compromise that commitment.

As these discussions move forward, Dr. Atkinson has made it clear what is not on the table:

• We will not support any partnerships or affiliations that would be detrimental to the future of the KU Hospital or the patients it serves.

• We will not support affiliations that transfer Kansas taxpayer dollars to directly benefit Missouri based institutions.

• We will not support any affiliations that reduce the number of resident physicians from KU serving in the KU Hospital.

• We will not support any affiliation that would compromise our commitment to train doctors for Kansas or to serve indigent Kansans.

• And we will only support affiliations that advance the vision of creating and sustaining new levels of excellence in the KU School of Medicine — and thereby contribute to improving the health of our state and region.

• Finally, we will ensure that any affiliation proposals will be fully vetted and shared with the Hospital Authority Board prior to adoption. Further, faculty will be consulted and informed about any proposal.

The region embraces a shared vision.

In the fall of last year, the Greater Kansas City Community Foundation and the Kauffman Foundation funded a study by a blue ribbon task force to assess higher education in the Kansas City region. The results of that report were very encouraging for the medical center.

The report confirmed that investment in the life sciences was imperative and that a significant share of that community investment should flow to the University of Kansas School of Medicine.

The report identified the presence of the Stowers Institute for Medical Research as a significant strength of Kansas City’s quest to achieve top tier status as a life sciences center. The collaborations between Stowers and KU are very strong. Currently, 19 of the 22 scientists at Stowers have faculty appointments at the KU School of Medicine and 11 KU doctoral students are doing research at Stowers. Stowers’ endowment allows them to plan to construct a 600,000-square-foot, $300 million facility every decade in perpetuity. This footprint for basic medical research greatly enhances the Kansas City region’s aspirations in the life sciences.

Stowers investigators are focused on basic research — exploring the ways in which cells function. In this work they will seek to unlock some of the most basic yet profound mysteries of human biology. The discoveries of the Stowers lab will be applied to improve human health only if clinical and translational research partners are engaged in the work necessary to take the results of the Stowers labs and convert them to treatments and cures. This presents an unprecedented opportunity for KU and Kansas to further the humanitarian cause of healing and curing but also to revitalize our economy through the creation of commercial products and licensed technologies.

Clinical and translational research requires a broad base of patients to test new treatments and cures. A coordinated approach is essential in a market the size of Kansas City if maximum results are to be obtained. KU has recently applied successfully for a federal planning grant to create a clinical and translational research collaborative in our region. In cooperation with many partners we plan to aggressively expand our region’s capacity to offer patients the newest drugs and therapies — providing hope to many who would otherwise suffer or die.

The Blue Ribbon Task Force Report suggested greater collaborations between the KU School of Medicine and leading area hospitals. Children’s Mercy Hospital and Saint Luke’s Hospital expressed an interest in joining the KU Hospital in discussions to determine if enhanced partnerships with KU would be mutually beneficial. A steering committee was convened for that purpose.

Children’s Mercy and Saint Luke’s are excellent hospitals that have ongoing, existing partnerships with KU. We are proud to be associated with such hospitals and believe that our individual strengths and enhanced collaborations can only serve to advance each other and advance our collective interest in transforming the regional economy through expanded life sciences activity. Both hospitals have a significant presence in Kansas and both treat a very large percentage of Kansas patients.

KU joint strategic planning: Determining priorities and investment of resources

Another outgrowth of the steering committee discussions has been a commitment to engage in a joint strategic planning process between the KU School of Medicine and the KU Hospital. This work is being supported by the same consultant that is assisting the steering committee, The Chartis Group — a nationally recognized health care planning consulting group. A process has been designed to allow both institutions to identify key priorities and the resources necessary to achieve specific outcomes. This work is ongoing but shows promise to identify how the KU Hospital might best support the clinical, educational and research missions of the academic medical center. I would expect this work to continue for the next several months. They are complicated discussions.

In the course of this work the KU Hospital has provided the KU School of Medicine with a proposal that would significantly increase hospital support to the school. The proposal, which covers a 10-year time frame, bases hospital support on a number of concessions by the school. The school is studying this proposal and is excited by the generous offer of additional support — but fully cognizant that we can only move forward with carefully worked-out agreements that cover our joint operating procedures.

As part of this process, and with the consultant’s help, the school is attempting to determine what level of support from the hospital would place the school at the average among its peers and how much it would take to place the school in a premiere position. This work is ongoing.

I am hopeful that this process will result in a new and strong working relationship as these two successful institutions move forward together.

Finally, there is the model of the KU Cancer Center.

KU’s application for NCI designation requires unprecedented levels of collaboration among health care institutions.

In order to achieve NCI designation as a comprehensive cancer center, KU will have to enlist the support and partnership of our region’s leading health care providers. Obviously, the KU Hospital Authority will lead the way, but to be successful we must have the major hospitals in Kansas City, Wichita and in the region behind our application. These hospitals could choose to affiliate with other cancer centers and in doing so would significantly compromise our region’s ability to obtain NCI status at our academic medical center.

We have formed the Midwest Cancer Alliance to serve as the vehicle for these collaborations. Patients in our region deserve access to cancer clinical trials, and we can best serve those patients throughout our entire state and region by coordinating the work necessary to create the trials, administer them and report findings. For the Midwest Cancer Alliance to be successful, we must have the support of regionally based, research-oriented hospitals.

Community leaders are rallying to the cause of advancing KU’s standing as an academic medical center.

The steering committee has also been a venue for community leaders to discuss how they might best contribute to elevating the KU School of Medicine. They have pledged significant support and encouraged broad collaborations to advance the goal of creating a life sciences powerhouse. They are very bullish on the potential of KU, and their generous support — when combined with that of the University of Kansas Hospital — will make possible the creation of a world class academic medical center.

Conclusion

These are exciting times to be a leader in higher education. The knowledge economy has presented our state with new competitive challenges. If we are to thrive we must think regionally and we must look to aggressively exploit our expertise in the life sciences. The steering committee is helping facilitate this difficult work. I am hopeful that what will emerge is a new family of collaborators and partners — committed to a powerful, shared vision. And that by strategically investing in the KU Medical Center, all of the institutions will achieve more than if they acted independently — and our region will achieve more together. Many details have yet to be worked out and the discussions are just that — discussions. But I remain very encouraged. We seek how to best serve Kansans and to leverage the public investment in our mission to obtain the best possible results.

I sincerely appreciate this opportunity to appear before you today, and I thank you for your interest in this matter.

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