UNIVERSITY OF PENNSYLVANIA
PRESIDENT'S WRITTEN TESTIMONY: DR. JUDITH RODIN
House Appropriations Hearing
Date: April 3, 1995
Time: 1:00 P.M. INTRODUCTION
Thank you for this opportunity to appear before you today. My name is Judith Rodin and I am the President of the University of Pennsylvania. I have returned home to Penn, to Philadelphia to become the University's seventh President at a time of unprecedented opportunity.
Together, the Commonwealth of Pennsylvania and this University are poised to lead us into the next century.
This Committee has been an enduring and generous benefactor of Penn. I know that in the past Penn has not done all we should to explain to you how we employ those resources to benefit the Commonwealth.
The University is keenly aware of the unique privilege it enjoys in receiving Commonwealth support for its programs. We are deeply grateful for the Commonwealth's support and believe that the state's wise investment in the University benefits both Penn and the Commonwealth.
Let me be direct and concise:
We use Commonwealth appropriations primarily for two purposes: to help support the School of Veterinary Medicine and to help maintain "need blind" admissions for Commonwealth residents.
The Governor's proposed Fiscal Year 1996 budget has recommended a total of $35,470,000 in funding for Penn, broken down into two line items: $20,763,000 for the "University of Pennsylvania" and $14,707,000 for "University of Pennsylvania Veterinary Activities. "
The Vet School is the Commonwealth's Vet School. We are the only Vet School in the state and we are the best in world. I am aware that this sounds immodest, but it is true and true in no small part due to your vision and support. In this connection and throughout these remarks, I want to stress the return Penn gives the Commonwealth on its investment in our University. That return is substantial.
A ri1 3, 1995 ditten Testimony for University of Pennsylvania Through the Vet School we benefit the state by: - educating Veterinarians who, when trained here, tend to stay here; - providing essential services to the state's agribusiness; and - conducting the research essential to curing and preventing diseases that can affect food animals and the food supply.
Let me give you two specific instances. When avian influenza was detected in the Commonwealth and threatened to wipe out large portions of the poultry industry, the Vet School played the leading role in averting this potential catastrophe through its laboratory work. In another potentially catastrophic incident, our New Bolton faculty were the first to isolate Salmonella enteritidis from the egg yolk and from the ovaries of egg-laying hens. They worked closely with egg producers to resolve this problem, thus preventing millions of dollars in losses to the egg industry in the Commonwealth.
Our top priority in the upcoming budget is to ensure an adequate funding base for our School of Veterinary Medicine. The School is not only an invaluable resource to the Commonwealth's agriculture industry, but also an integral and indispensable part of Penn's many health science programs. The School has traditionally relied on Commonwealth funding for approximately 40 percent of its operating funds. Since 1991, the Commonwealth appropriation to the School has decreased by $500,000, not including the effects of inflation. The current Commonwealth funding level of $14,779,000 represents only 27 percent of the School's operating budget. The University is committed to finding ways to increase stability of support for the Vet School and hopes to work with you to, among other goals, lower tuition for in-state students. We share your goal that Pennsylvania's best students not be forced to go out of state for veterinary training.
In terms of student aid, in total over $48M flows to Commonwealth residents in the form of scholarship. Of this amount, Penn provides from its own funds $22M for Commonwealth resident scholarships alone; additional resources are dedicated to loans, work study, and other support. Most of the grant dollars come out of our very limited unrestricted funds. The Commonwealth Appropriation is key to subsidizing part of this amount and supporting Penn's (< capacity to assure that no qualified Pennsylvania student is denied access to Penn because of unmet
A ri1 3, 1995 &itten Testimony for University of Pennsylvania financial need. Penn currently maintains a policy of need-blind admissions which ensures that, once admitted, each student will receive sufficient financial aid to allow him or her to matriculate. The funds that have been appropriated to the University as "General Instruction" have, in fact, been used to support financial aid to Pennsylvanians and to maintain our policy of need blind admissions for those students.
PENN'S SERVICES TO THE COMMONWEALTH
At the heart of the partnership between the University and the Commonwealth is Penn's commitment to education, research and service. The core of this bond is Penn's education of Commonwealth citizens in scores of disciplines and professional fields. Currently 55,000 alumni reside in the Commonwealth, including approximately 1,400 dentists, 3,100 lawyers, 1,300 veterinarians and 2,100 physicians. Their accomplishments are a testament to the stature of Penn's undergraduate, graduate and professional programs. Penn trains a large number of the Commonwealth's health professionals, awarding all of the degrees in veterinary medicine, 41 percent of the degrees in dental medicine, 15 percent of the M.D. degrees, and 23 percent of the master's degrees in nursing. The University annually trains 2,300 health care personnel. I would also note that Penn's internationally recognized Wharton School of Business annually educates about 5,000 students in a variety of business fields, including over 1,700 men and women in MBA programs many of whom are now leaders of business in the Commonwealth.
Of the 22,000 students who pursue full- and part-time educations at Penn in basic and applied areas of learning, about 34 percent are Commonwealth residents. The Veterinary School admits around two-thirds of its total student body from the Commonwealth. Roughly 80 percent of the Veterinary School applicants from Pennsylvania are admitted. The Medical School admissions process also gives special attention to Pennsylvania residents. More than one-third of the total number of newly admitted students over the last four years have been residents of Pennsylvania, even though Pennsylvania residents represented only 15 percent of the applicant pool. Pennsylvanians have twice as good a chance of admission as non-Pennsylvanians. Finally, about one half of the student body in the School of Nursing are Commonwealth residents.
As a leading national research University, Penn's federal and private funding for research and sponsored programs exceeds $280 million. These funds support a wide array of basic and applied research programs and are a key factor in the establishment, growth, and opportunity for high technology industry in our state.
A ri1 3, 1995 ditten Testimony for University of Pennsylvania In addition to providing access to higher education for Commonwealth residents and research and scholarship activities that strengthen Pennsylvania's economy, the University of Pennsylvania is committed to a strong tradition of community service. The University strives to be a good citizen of the Commonwealth and the City of Philadelphia by marshalling its unique resources to combat some of the serious societal and economic problems affecting us, our neighborshoods, and our neighbors.
Penn provides an array of educational and cultural opportunities to the Commonwealth community. Our faculty, staff and students contribute their time and expertise to a host of community efforts, ranging from tutoring elementary public school children to advising local small businesses. Approximately 6,000 University students, faculty and staff participate in more than 300 Penn volunteer and community service programs. There are 30 student-run organizations and over 15 University-affiliated community service organizations active on campus. Last year, students logged 93,248 hours volunteering in community service programs and activities including the Program for Student-Community Involvement, Homeless Health Care Initiative, and Operation Outreach. The University is also involved in a variety of educational programs, such as the Collaborative for West Philadelphia Schools and Say Yes to Education, aimed at building mutually beneficial University-public school collaborations throughout the community. Finally, Penn's economic and community development programs are designed to support the Commonwealth minority business communities as well as to ensure that the University becomes an effective participant in community development efforts.
Penn further demonstrates its service mission through the provision of health care. The Hospital of the University (HUP) of Pennsylvania's PENNSTAR Trauma Program transports trauma patients from all over southeastern Pennsylvania for care at HUP. During FY 1994, the inpatient and outpatient programs of Penn's Medical Center provided $30.9 million in uncompensated care -- that is, care for which the Medical Center received no payment -- largely to Commonwealth residents.
Penn is a significant economic entity in the Commonwealth. Penn is a major employer of Pennsylvania residents, an important customer of Pennsylvania businesses and a substantial contributor to household earnings in the Commonwealth. In FY 1990, applying a standard economic multiplier, the University generated an estimated $2.5 billion in total economic activity in Pennsylvania. The University boosts the construction industry and related businesses through approximately $50 million in construction activity annually. Penn spent more than $390 million last fiscal year in the purchase of goods and services. Including the hospital, clinical practices and
A ri1 3, 1995 &itten Testimony for University of Pennsylvania other units, Penn has over 20,000 employees who annually contribute $30 million in City income taxes and $17 million in State income taxes. It is estimated that our total Commonwealth appropriation of $35,542,000 will generate economic activity of over $82 million for Pennsylvania in FY 1995 and will support 1,411 jobs. Penn is a major engine of economic growth and revitalization in the Delaware Valley.
COMMONWEALTH SUPPORT
The current fiscal year Commonwealth appropriations have been targeted for programmatic support in four areas: General Instruction, Medical Instruction, Dental Clinics and the School of Veterinary Medicine (four line items). Although the Governor's proposed Fiscal Year 1996 budget combines the University's current seven line items into two -- an effort to streamline the process that we support and which reflects the two priorities identified earlier -- the University's FY 1996 appropriation submission was based on the pattern of funding in preceding years and included requests for the seven line items. The following sections describe the programs currently supported by Commonwealth funding and included in the FY 1996 funding request.
THE SCHOOL OF VETERINARY MEDICINE
Agriculture is the foundation of Pennsylvania's economy. The School of Veterinary Medicine and its emphasis on food animal health, productivity, and economics provide continuing education benefits to the Commonwealth. Embodied in the School's mission is the provision of healthcare and protection for the Commonwealth's food and fiber producing animals, as well as for companion animals, sporting animals, wildlife, laboratory animals, animals residing in zoos, working animals, and aquatic animals.
The School is internationally recognized as the premier institution in veterinary medical education and for its progress in veterinary and biomedical research. The School is known for innovation in education through its unique curriculum, its strength in basic science and its commitment to comparative medical research. As the Commonwealth's only School of Veterinary Medicine, it addresses the Commonwealth's veterinary needs by training highly qualified general practitioners and specialists in veterinary medicine. The School is currently in the process of modifying its curriculum to permit students to major in a particular area of veterinary medicine. A major in Food Animal Medicine has already been implemented. Graduates in this major will be uniquely qualified to assist and advise the multiple agricultural constituencies in Pennsylvania. Of the 420 students normally enrolled in our professional program, on average between 150 and 300
A ri1 3, 1995 &itten Testimony for University of Pennsylvania come from Pennsylvania. These students currently pay $3,600 less than out-of-state students. As discussed in more detail below, we hope to find a way to lower the rate of in-state tuition by an even more significant amount in order to attract more qualified Commonwealth applicants.
The School contributes to the economic development and welfare of the Commonwealth and its citizens by increasing the economic productivity of agriculture through its unique programs and outreach from the School's 600 acre New Bolton Center campus. It contributes to the welfare of the citizens of Pennsylvania by delivering highly sophisticated veterinary care in its acclaimed hospitals, and by providing animal disease diagnostics to preserve the Commonwealth's valuable agricultural resources. The School's hospitals deliver state-of-the-art care to large and small animals, many of whom have been referred by veterinarians from across the Commonwealth. The annual visits to our hospitals, coupled with visits seen by our field service personnel, number in the tens of thousands.
The School's Food Animal Programs include the George D. Widener Hospital, a field service/ambulatory clinic, nutrition and health economics, food animal reproductive programs, the Laboratory of Avian Medicine, along with the Laboratory of Large Animal Pathology. The School is a full partner along with the Pennsylvania State University and the Pennsylvania Department of Agriculture's Summerdale Laboratory, under the umbrella of the Animal Health Commission, improving large animal and poultry diagnostic services to the producers and veterinarians in Pennsylvania. The School provides the entire toxicology component of the Commonwealth's effort in this most important venture. In conjunction with production systems practitioners, the Center for Animal Health and Productivity provides health management services for animal populations and conducts field investigations of herd and flock problems that pose serious threats to the economic productivity of animal agriculture within the Commonwealth.
With Penn State, we offer the new Dairy Prevention Medicine Certificate Program that teaches veterinarians how to manage the health of entire herds, and thereby increase profitability. Graduates of this program collectively serve thousands of Pennsylvania farms. We are now extending our expertise to the swine industry and are in the process of hiring two new faculty to better serve this industry. As noted earlier, the first instance of avian influenza in the Commonwealth was detected in our laboratories and the School played a leading role in saving the poultry industry during the avian influenza epidemic. Our faculty at New Bolton Center was the first to isolate Salmonella enteritidis from the egg yolk and from the ovaries of egg-laying hens. Since that time, we have worked with egg producers to provide solutions to facilitate resolution of this problem, and the results have been positive. The School's faculty provide a vital line of early
A ri1 3, 1995 &itten Testimony for University of Pennsylvania defense against the spread of infectious disease among food animal populations within the Commonwealth.
The School contributes to the research efforts of the Commonwealth by creating new knowledge through basic and applied biomedical research, and by providing technology transfer to Pennsylvania industries and agricultural constituencies. Transgenic technology, now of immense importance to many spheres of basic and applied biomedical research as well as to the plant and animal industries, has its roots in the Veterinary School. In the past 12 years, forty percent of papers from the approximately 300 veterinary schools in the world that appeared in the most respected scientific journals came from Penn's Veterinary School. Within the Commonwealth, only the Medical School at Penn produced more papers in these journals than the School of Veterinary Medicine. No other medical school in the Commonwealth produced as many as half the number produced by the faculty at the Veterinary School.
In the field of food animals, our research programs have led to the institution of a clinical test for Lyme Disease, Ovine Progressive Pneumonia, and Caprine Arthritis Encephalitis assay for sheep and goats. The School is pioneering the use of breakthrough technology in the use of Polymerase Chain Reaction assays to assist in more rapid diagnoses of these diseases.
The School currently receives $14,779,000 or 27% of its funding from the Commonwealth. This compares with an appropriation of $15,332,000 appropriated four years ago. In FY 1988, the School received an appropriation of $14,755,000, essentially the same funding as it did this year. Since that time, inflation has greatly eroded this funding. On average, schools of veterinary medicine receive between 60 and 70% of operating funds from their states, plus substantial additional funding for capital needs. Shortfalls from the Commonwealth have required the School to reduce staff, forego raises for faculty and staff, borrow funds for operations, and to continue to raise tuition. Currently the School's tuition level is the highest in the nation and more than twice the national average. As a result, many highly qualified Pennsylvania residents are choosing to attend other schools of veterinary medicine. Moreover, many of these students receive subsidized pre-veterinary training in Pennsylvania. Because graduates tend to practice in the states in which they train, ultimately Pennsylvania is losing potentially excellent veterinarians to other states after investing in the initial aspects of their education. Each time this occurs, Pennsylvania loses its entire investment.
The School requires an appropriation of $23,114,000 in FY 1996 to maintain its programs of excellence and to provide financial aid to Pennsylvania residents in order to lower the effective
A ri1 3, 1995 ditten Testimony for University of Pennsylvania rate of tuition to $10,000. This level of tuition would enable the School to attract a greater number of qualified students from the Commonwealth. These students would graduate with far less debt and would, for the most part, remain in the Commonwealth to apply their considerable skills. An appropriation of this level would amount to 41% of the School's budget, still a great bargain for the Commonwealth.
OTHER SUPPORT
The University currently receives an additional $15,489,000 from the Commonwealth. In many ways, the use of the term "General Instruction" is a misnomer. These funds are used to provide financial aid support to Pennsylvania residents enrolled at the University. For example, last year, over 90% of the $1 1.8 million appropriated to the University for "General Instruction" was used to support grant aid to Pennsylvania residents. In that year (FY 1994) the University spent a total of over $22 million in scholarship aid to Pennsylvania residents. Our Commonwealth appropriation is, therefore, a vital component of our financial aid program and allows us to maintain our need-blind admissions policy. This policy, which is being maintained by fewer and fewer institutions of higher education in the country, ensures that each admitted student will receive sufficient financial aid to allow him or her to matriculate.
The University's Fiscal Year 1996 budget submission included a request for $17,656,000 in the funding category. This figure amounts to an inflationary increase over Fiscal Year 1991 when funding for this line item began to decline. The funding level in the current year represents 96.5 percent of the FY 1991 appropriation.
HEALTH PROFESSIONS EDUCATION AND CLINICAL CARE
The University of Pennsylvania has one of the nation's few comprehensive professional health programs, providing educational programs in Medicine, Veterinary Medicine, Dental Medicine and Nursing. These four professional schools provide health education and service to West Philadelphia, Philadelphia, the region and the Commonwealth.
MEDICAL INSTRUCTION
In FY '94-'95, the Commonwealth provided $4.3 million to the University of Pennsylvania School of Medicine. The state appropriation represents a critical source of support t. for the School of Medicine, allowing it to continue its strong commitment to the local community,
A ri1 3, 1995 ditten Testimony for University of Pennsylvania the City of Philadelphia and the Commonwealth.
The funds provided by the Commonwealth are devoted solely to undergraduate medical education programs. They are used to provide financial aid to Commonwealth residents and to pay the costs associated with providing student services, community health care educational and supportive services, and recruitment and retention activities.
In recognition of the critical support provided by the Commonwealth, special attention is given to qualified Pennsylvania residents who apply to the School of Medicine for admission. Over the last four years, one-third of all newly admitted students have been Pennsylvania residents, even though Pennsylvania residents make up less than 15% of the applicant pool. In FY '94, the School of Medicine provided opportunities in medical education to 238 Commonwealth residents, including 14 underrepresented minority students and 98 women. Penn medical students received financial aid averaging close to $20,000 a year. Commonwealth funds are a vital part of the financial aid pool; frequently making the difference in enabling a Commonwealth resident to attend the School.
With the cost of educating a medical student exceeding $100,000 a year, tuition covers only about one-fifth of the costs associated with medical education. Commonwealth funding represents a critical source of support which helps to plug this gap. These funds take on even greater significance with the dramatic changes occurring in the health care marketplace. Historically, the Medical Center has been able to use patient care revenues to help subsidize some of the costs of undergraduate medical education. However, increased reliance on managed care is placing significant downward pressure on clinical revenues, making it increasingly difficult to shift any of the cost of undergraduate medical education to the patient care base.
The University of Pennsylvania School of Medicine is committed to educating a diverse group of the Commonwealth's most talented medical students and training increasing numbers of them for careers as primary care physicians. These programs are consistent with the national and Commonwealth goals of increasing the number of medical school students in primary care medicine and improving the access of our community to primary and preventive health care services.
Towards that end, the University has created the University of Pennsylvania Health System. The Health System integrates the University of Pennsylvania Medical Center, including the School of Medicine and the Hospital of the University of Pennsylvania, with a newly-formed
A ri1 3, 1995 &itten Testimony for University of Pennsylvania network of primary care physicians. One of the major goals of the Health System is to provide enhanced primary care training opportunities to students at the School of Medicine.
The University of Pennsylvania has launched a number of other programs which will significantly increase its ability to educate primary care physicians. The School of Medicine recently announced the creation of a new Department of Family Practice and Community Medicine which will substantially alter the primary care experience of our medical students. Through this program, students will have increased opportunities to observe and provide family medicine and primary and general health care. The medical student curriculum is being altered to provide required and elective courses in primary care.
To implement these changes, the School of Medicine is recruiting additional faculty in family practice and primary care. These faculty will educate medical students, deliver primary care to Commonwealth residents, and conduct health services research aimed at improving the delivery of basic health care services. The School is also developing the facilities and support systems necessary to educate our students appropriately in the primary care setting. These initiatives, while providing a needed service for our students and the community, will generate additional expenditures for the School of Medicine. The Commonwealth appropriation will assist the School of Medicine in implementing these new primary care initiatives.
Commonwealth funds also help support programs which allow medical students to participate in community service programs. These programs give students the opportunity to broaden their education. They also offer needed services to the community including HIV and AIDS prevention education, health services to the homeless, nutrition education to elementary school students, health screenings and preventive care education.
The School of Medicine continues to be committed to increasing the number of physicians from underrepresented minority groups in academic and clinical medicine. Through the Office of Minority Affairs, the School not only recruits potential applicants for admission and facilitates applications, but also offers counseling to aid in retention of enrolled students. In addition, the School is in the process of implementing a federally-funded Center for Excellence for Minorities in Health Care in order to serve as a national resource for the education of minority academic physicians.
The University of Pennsylvania School of Medicine has made a strong commitment to its neighborhood, the City of Philadelphia and the Commonwealth. Each year the appropriation from
A ri1 3, 1995 ditten Testimony for University of Pennsylvania 11 the Commonwealth allows the School to enhance its services to its students and the citizens of Pennsylvania. This continuing investment provides necessary support for the Commonwealth's most talented students and augments service programs designed to assist our community.
DENTAL CLINICS
The School of Dental Medicine operates dental clinics which provide dental care to residents of the Commonwealth. Active patients number almost 19,000 individuals, 1,700 of them children under age 10, and 3,700 individuals over age 60. The School is a primary site for emergency dental care for both children and adults in the metropolitan Philadelphia area.
The School of Dental Medicine is committed to its role as a contributing member of the West Philadelphia community. The Commonwealth appropriation allows us to provide dental services to the community at rates that are affordable and, in most cases, less than 50% of those charged by other dentists in the area. Because of our Commonwealth appropriation, Penn is able to continue providing care to individuals who are unable to afford private dental care.
This year's request of $1,133,000 for the Dental Clinics is set at a level to reflect inflationary increases.
CONCLUSION
The University's central mission has always been teaching, research and service. That mission will guide Penn into the next century as it deepens its exploration of new technology and interdisciplinary ways of studying subjects. The Commonwealth's generous support has helped shape Penn's mission and has permitted the University to recruit world class faculty and students. The University in turn has brought significant economic and social benefit to the citizens of the Commonwealth. Our economic and academic impact, coupled with our outreach and community activities, makes the Commonwealth funding of Penn a high-return investment in the future of Pennsylvania.
A ri1 3, 1995 &itten Testimony for University of Pennsylvania