Oct. 20, 2005
Dear Colleagues, Students and Staff:
Recently, a final report was released by a Blue Ribbon Task Force established to study higher education in Kansas City. Its findings are very favorable to the University of Kansas Medical Center. I wanted to provide you with some additional information on the report knowing you will be hearing about it in the months ahead.
Most importantly, I wanted to take this opportunity to share my pride in all of you--this report is an exciting vote of confidence in your work and the progress we have made together over the past several years.
The Greater Kansas City Community Foundation earlier this year commissioned a Blue Ribbon Task Force charged with providing our community with strategies, based on many local reports and hundreds of interviews, to "help guide business, philanthropic, civic and government leaders as they identify funding priorities and help to strengthen higher education."
The task force was chaired by Dr. Benno Schmidt, who served as President of Yale University from 1986 to 1992. Other task force members are James Duderstadt, former president of the University of Michigan; Kurt Schmoke, former mayor of Baltimore; Sara Martinez Tucker, president of the Hispanic Scholarship Fund; Farris Womack, former vice president at the University of Michigan; and Richard Atkinson, former president of the University of California.
The report concludes in part, "We believe it is clear that research capacity in the life sciences is the broad area of knowledge that offers Kansas City the greatest opportunity. This is the area that holds the greatest promise for economic and humanitarian returns."
The report includes key recommendations to build Kansas City into a life sciences center. They include building basic research capacity at KUMC with a goal of moving our external research funding from $75 million today to $300 million in 10 years. As the report states, "There is no better investment Kansas City could make in its future."
Additionally, the report calls for continuing to align the work of the Stowers Institute for Medical Research and KUMC. In collaboration with area hospitals, including The University of Kansas Hospital, the report calls for expanding translational and clinical research capacity.
This report clearly adds momentum to our quest for NCI Comprehensive Cancer Center designation by calling on community leaders and funders to support enhanced investment in our cancer research initiatives.
It is my hope that the favorable recommendations of this report will be embraced by Kansas City civic leaders on both sides of the state line and that as a result greater philanthropic investment will flow to our robust research enterprise. The report can also serve as a tool to help us drive additional state and federal investment to KUMC.
A full copy of the report is available on the website of the Greater Kansas City Community Foundation at www.gkccf.org. A brief summary of KUMC highlights follows, along with a link to news coverage by the Lawrence Journal World.
I would be interested in any questions or comments you have about the report. The report's recommendations are great news for us and I appreciate all of the work you do to create a place that our community values.
Sincerely,
Barbara Atkinson, M.D.
Executive Vice Chancellor
Executive Dean, KU School of Medicine
A Life Sciences Plan for the University of Kansas Medical Center
The strategy we recommend to build basic life sciences research capacity at KUMC has eleven major elements, and divides into two phases of roughly six and four years. Because KUMC needs to build its clinical research and care capacity along with its basic science, we are combining the two to present a unitary institutional plan. The most important elements of the plan are:
If this plan is implemented, Kansas City should be among the top 20 life sciences centers in the country by 2015. Stowers will have a robust collaborator in KUMC that is one of the top 25 medical centers in basic life sciences and one of the top 50 in R&D generally. Kansas City’s hospitals will have stronger basic sciences research collaboration than ever, and can align their clinical research and clinical care programs most productively.
We will briefly discuss each element of the plan, including costs and funding mechanisms, and offer some thoughts on financing strategies. We wish to repeat a point that we have emphasized before: the most essential element in the strategic plan to move KUMC to a new level is the talent of the people brought in at all levels, from PhD students to senior faculty. With the presence of Stowers, KUMC has a chance to compete with the best, for the best, but it must be able to equal the research and financial incentives offered by the best medical centers to succeed.
Achieve Comprehensive Cancer Center Designation
KUMC has put a high priority on achieving Comprehensive Cancer Center (CCC) designation from the National Cancer Institute within 6 years. This is central to its strategy to make KUMC a world-class medical center.
Some have questioned whether this should be KUMC’s first priority in view of its low level of clinical cancer care. The CCC issue highlights the need for KUMC to forge strong alliances with the KC-MO hospitals to broaden its clinical capacity and to create the strongest possible alignment of basic research with translational and clinical capacity. This task force is neutral about whether CCC designation should be the first priority, or should become a longer-term objective within an overall strategy of building basic and clinical research capacity. We present the Cancer Center first because the KUMC’s leadership holds it currently as a first priority. There must be a rigorous assessment of whether CCC designation is likely and timely and of the clinical base in cancer care that is necessary to achieve it. It should be recognized that the quest for CCC designation can energize and focus KUMC’s drive to become a world-class medical research center even if the designation does not come as quickly as KUMC might hope. We also note that there are many examples in other states of how the quest for CCC designation has energized politicians to support the effort. It is a worthy enterprise and one the public can rally around.
If the designation occurs, Kansas City will be one of the thirty-nine American cities with CCC designation. (There are 60 CCC’s nationwide.) Center designation will bring $40-50 million in additional NIH funding. It will be a critical element to enhancing the reputation of KUMC, giving a serious lift to both faculty and student recruitment. Since the Center will collaborate closely with all Kansas City’s hospitals, it will enhance the reputations of Kansas City’s major hospitals for quality clinical care. Cancer is probably the weakest area of clinical care currently at Kansas City’s otherwise strong hospitals.
KUMC has recruited a strong leader for the CCC effort, Dr. Roy Jenson, who played a leading role in Vanderbilt’s CCC designation. KUMC and Dr. Jenson need to recruit three senior deputies to provide leadership in basic science research, clinical programs, and drug discovery and development. Stowers has agreed to fund and help recruit the basic science research leader. All three need to be of highest quality. In addition to leadership, the other vital elements are faculty recruitments and building a state-of-the-art Cancer Research Center. KUMC needs to enhance significantly its cancer research and clinical care base to reach a critical mass of talent for CCC designation. Ten new senior faculty, mostly in clinical research and care need to be recruited, and roughly 25 new junior faculty need to be added to strengthen basic science research. Alliances must be created with KC-MO hospitals.
After a two-three year start-up period during which KUMC must carry their salary and laboratory start-up requirements, research faculty cover 80-90 percent of their continuing costs with their grants. Senior research faculty start-up costs vary considerably depending on laboratory size and equipment requirements. In the past three years, senior faculty start-up costs at KUMC have averaged $3.275 million. We have increased this to $3.5 million to reflect KUMC’s need to be competitive with the best medical centers in recruiting. Junior faculty start-up costs are much less, since they typically join functioning labs. At KUMC they have been averaging $750,000. We have increased this to $800,000. Clinical practice faculty also have start-up costs that amount to about $800,000. After their first three years junior research faculty also have about 80 percent of their costs carried by grants. Clinical practice faculty cover roughly 90 percent of their costs with clinical income. If the 10 senior faculty are divided equally between research and practice, their start-up costs will be $21.5 million and their continuing costs not covered by grants will be about $500,000 per year. For the 25 junior faculty recruits, we expect about two-thirds will be research and one-third clinical, the total start-up costs will be about $20 million and their continuing costs not covered by grants will be about $860,000 per year.
The third element of the plan to achieve CCC designation is to plan and build a first-class Cancer Research Center of some 250,000 square feet which will house the labs of 70 principal investigators. It is estimated that it will take four years to plan and build the Cancer Research Center and the cost will be about $90 million.
CCC designation is phase one in a long-range 10-15 year plan to develop a much larger cancer center at KUMC. After phase one, the plan is to add 300,000 square feet for a 150-bed cancer hospital, 150,000 square feet for an outpatient diagnostic and treatment center, and another 250,000 square feet for a research laboratory.
Additional Facilities
In addition to the facilities planned for the Cancer Center, KUMC has other research lab needs. KUMC will open a new 225,000 square feet Biomedical Research Building in September 2006. Researchers can then vacate the aging labs in Wahl East, Wahl West, and the Hixon building, all of which require modernization. Also the Lied Biomedical building needs renovation. The estimated costs for these renovations is $24 million. This will provide space for 70 principal investigators.
The new and renovated lab buildings along with the Cancer Research Center, which should be completed by 2010, will give KUMC sufficient new, start-of-the-art research facilities for the influx of new faculty researchers provided for in the first five years of this strategic plan. In the second five years of the plan, research faculty expansion will call for another 250,000 square feet laboratory building. It will take two additional new buildings in the next five years to support the new level of clinical services offered and to provide space for the School of Medicine’s medical education activities. The first of these is a Center for Advanced Medicine, a 170,000 square feet facility for clinical research, clinical teaching, and ambulatory care. This is estimated to cost about $53 million, with the KUMC Hospital expected to carry half the cost. The second building is a medical education building of 143,000 square feet with a 500-seat auditorium. This is estimated to cost $40.5 million.
Additional Faculty
In addition to the 35 new faculty recruited as part of the CCC designation effort over the next 5 years, KUMC needs to add about 20 additional senior faculty and about 35 additional junior faculty in the same time period in other research areas to raise its basic and clinical research to the levels needed. We believe these faculty should be recruited under a strategic plan that dovetails with Stowers’ strategic recruitment plan. Most of the junior appointments should be in the basic science departments which currently have strong senior faculty leaders. Most of the senior appointments should be in clinical research. If 20 senior research faculty are added over the next seven years, the start-up costs would total $70 million, and the continuing costs, once they are all on grants, will be $1.2 million per year. If 35 junior research faculty are recruited, the total start-up cost will be $28 million, and continuing costs about $1.4million annually.
In the second five years of the ten-year plan, the School of Medicine would recruit an additional 50 research faculty, one-third senior, two-thirds junior, and an additional 30 clinical practice faculty. The start-up costs for the 16 senior research faculty will be roughly $56 million, and for the junior researchers $27.2 million. Their continuing annual costs will be $960,000 for the seniors and $1.36 million for the juniors. The 30 new clinical practice faculty will have start-up costs of $24 million and continuing costs of $600,000.
Expand PhD Program
KUMC currently admits 20 PhD students each year, and since PhD’s generally take 5 years to degree, the PhD cohort is about 100 students. This program needs to be doubled over the next 5 years to provide the graduate students necessary to work in the labs of the new researchers recruited to KUMC and to Stowers.
Graduate students are the lifeblood of high quality life sciences research. They bring energy and new ideas into their laboratories, and working with them brings out the creativity of junior and senior faculty. The quality of graduate students is as important to faculty as the reverse. Thus KUMC must make sure that as it adds 20 new PhD candidates each year, it is also recruiting the highest possible quality. The School of Medicine’s PhD stipends are now $20K per year. This is not competitive. To be competitive stipends should be raised to $25K in 2006 and $30K in 2009. After two years, about 80 percent of the students’ stipends will be carried by grants supporting the labs to which they are assigned.
The school plans to phase in the additional students gradually, adding 5-10 students in classes starting next fall, depending on the availability of outstanding students. Thus the start-up cost of doubling the size of the program and raising the stipend to $25,000 in 2006 and $30,000 in 2009 is approximately $14 million, spread over roughly seven years, and the continuing costs are an incremental $2.5 million per year over what is being spent to support PhDs today. With the School of Medicine rapidly improving its reputation in basic and clinical research, and with the chance to work with Stowers, the increased stipends should help the school bring the quality of its PhD students to a significantly higher level.
Add 40 Post-Docs
Post-doctoral personnel recruited for specific research projects and not yet ready to become junior faculty are a very valuable element of a thriving research enterprise. KUMC needs to add 40 post-docs over the next five years to work with the new research faculty and additional PhDs. They receive stipends averaging $32,000 per year. After 2 years, 80% of their stipends are covered by grants. Thus, the start-up costs for this effort will be $4 million and the continuing costs will be $320,000 per year.
Bioinformatics
Bioinformatics plays an increasingly central role in biomedical research as vast data sets have to be harvested and analyzed to guide discovery. This brings biology to the intersection of mathematics, statistics, information systems analysis and computer science. It requires a sophisticated interdisciplinary effort. KU and KUMC have a plan to create a bioinformatics program that would physically be divided between the Lawrence campus and KUMC. It will be important to locate as much of the bioinformatics program as possible at KUMC. KU has pledged 10 faculty positions toward the effort and KUMC has pledged five faculty positions. KUMC has to find the resources to recruit these five faculty – two seniors and three juniors – in addition to the new faculty we have discussed above. Bioinformatics is a field that receives strong NIH funding support, so the economics is similar to the other research faculty we have discussed. The start-up costs for the two senior appointments will be about $7 million and their continuing cost will be $120,000 per year. The juniors will have start-up costs of $2.4 million and continuing costs of $120,000 per year.
Bioinformatics is so vital to advanced life sciences research that we recommend a second research consortium in the field be located adjacent to Stowers and UMKC. As we will discuss in the section on a proposed new Kansas City Institute for Advanced Study, this consortium would combine faculty from the UM system and other faculty contingents invited from universities such as Washington University, Johns Hopkins, and others.
These researchers would work very closely with researchers and clinicians at KUMC, Stowers UMKC, and the KC-MO hospitals. It is very important that the network infrastructure extend to KUMC, Stowers, UMKC, and the hospitals so the full life sciences community can share the massive databases necessary for contemporary life sciences research. Several of Kansas City’s industries, such as Cerner and Lab One, will probably want to participate in the bioinformatics enterprise as well.
Bioengineering
KU and KUMC have a similar plan to develop a bioengineering program, with Lawrence committed to 10 faculty and KUMC to five. Again, KU should be encouraged to locate this program at KUMC. Bioengineering is a key element in building life sciences capacity that can generate innovation and economic growth. It is an extremely dynamic area of applied science which has been the fastest growing area of engineering since 1990. As we will discuss presently in the chapter on translational research, bioengineers are increasingly working on basic science issues in the leading life sciences centers. Proximity to KUMC will therefore be important. The costs for KUMC will be similar to those for the bioinformatics program.
The Costs of Excellence –And the Return
The life sciences strategic plan we recommend, coupled with the ramp-up of research activity at Stowers, can cause a decisive change in the future of Kansas City. It will bring roughly 300 life sciences researchers of the highest quality to Kansas City in the next decade. It will bring 40 new PhD students each year, joining a cohort of 200 PhDs working in life sciences research. A good number of these PhDs will undoubtedly stay in Kansas City if it has the momentum in the life sciences that Stowers and this plan will create. Over the course of the decade, 1.5 million square feet of state-of-the-art life sciences research laboratories will be built and equipped. Over 1500 technical support jobs will be created.
Life sciences and medical research R&D funding in Kansas City, most of it from external sources, will move from about $200 million currently to about $800 million annually, and this is not counting any private industry life sciences R&D, which will also expand dramatically if this plan is put in place. Such a dramatic increase in life sciences research will put Kansas City in the forefront of excellent places for life sciences industries to locate and expand. This plan will also make Kansas City a center of innovation and entrepreneurship in biotechnology, as we will discuss in the next chapter.
What Will the Plan Cost?
Excluding the costs of Stowers’ expansion, which Stowers will bear, the cost of the life sciences plan, rounded up for contingencies and inflation, are:
| Facilities: | $330 million |
| Start-up Costs for New Faculty: | $285 million |
| Continuing Annual Costs for Faculty: | $ 7.4 million |
| Expand PhD’s and Raise Stipends | |
| Start-up | $14 million |
| Continuing Annual Costs | $2.5 million |
| Add 40 Post-Docs | |
| Start-up | $4 million |
| Continuing Annual costs | $320,000 |
| Total One-Time Costs: | $645 million |
| Total Continuing Costs: | $10.2 million per year |
The Return on Investment
In thinking about whether this strategic plan is worth the investment, two assumptions need to be made. Should the increased activities of Stowers be considered a benefit of implementing this plan? The argument for including Stowers is that putting this plan in place makes it much more likely that Stowers will conclude that Kansas City is an environment in which it should continue to concentrate its expanded presence. Also, this plan will reinforce Stowers in significant ways. The argument for excluding Stowers is that it is already here and will, of course, cover all the costs of increasing its activities. Our intuition is to include Stowers in the calculus, but we present it both ways.
The second major assumption is based on whether external federal and private funding of life sciences and medical research will continue, and continue to grow. We believe the correct answer to both questions for strategic planning purposes is clearly yes. Life sciences and medical research has a unique and growing appeal in American politics, and the returns on investment are substantial. NIH funding has doubled in each of the past five years. It is doubtful whether such rapid growth will continue, but it is highly unlikely that NIH funding will decrease. Moreover, bio-terrorism and agro-terrorism are among the most horrific and potentially devastating types of damage this country could suffer, and there will undoubtedly be growing federal investment in research that could prevent or mitigate the consequences. There is also growing concern about pandemic diseases that spread from animals to humans, such as avian flu and “mad cow” disease.
With Stowers included, the investment question is pretty simple: Is it worth spending $645 million over the course of a decade, and $10.2 million a year thereafter, to bring an additional $600 million a year in R&D expenditures into the community? It doesn’t take a tedious analysis of multiplier effects to see that the investment produces huge recurring returns.
If Stowers is taken out, the investment thesis is still compelling. A $645 million investment and $10.2 million of annual continuing costs bring to Kansas City $300 million of annual R&D expenditures, which historically has risen much more than inflation.
It is hard to imagine any investment that could produce such huge returns for Kansas City. And this is without even considering the most valuable returns: the likelihood that life sciences firms start up in, move to or expand in the city; the enhancement of Kansas City’s reputation as a center of excellence and creativity; the innovations and new enterprises this vastly enhanced research capacity will generate; and the humanitarian contribution of medical breakthroughs.
A Financial Strategy
Of all the elements of a sound life sciences strategy for Kansas City, crafting a financial strategy will be the most distinctively local. A group of outsiders can only suggest strategies that have worked in other places and might work in Kansas City. It is up to the civic, academic, and political leadership in Kansas City and the states of Kansas and Missouri to figure out how to get this done.
We believe the major philanthropies of Kansas City will need to take the lead to get a financial strategy in place with reasonable promptness. The strategy we suggest would be to provide a powerful incentive for the political process in Kansas and for individual philanthropists and small foundations to focus support on building life sciences capacity at KUMC. The sooner the financial strategy is set, the sooner Kansas City can get the benefit. Dithering and uncertainty are lethal to strategies for substantial change. This needs to be a two-state metropolitan effort in terms of philanthropy, and the state of Kansas needs to be a responsive partner in the effort. A possible approach might be the following:
If a financial strategy of this kind can be implemented, the consequence will be that a $175 million philanthropic commitment will trigger what would be for a private university the rough equivalent of a $1 billion investment in life sciences research capacity. With the presence of Stowers, this level of investment would give Kansas City momentum in the life sciences matched by only a handful of other cities in the country.
A Civic Leadership Strategy
The life sciences plan we recommend will require organized civic leadership to take stewardship of the strategy. Whatever the form of this leadership group, it must have the stature and power to work as a strong strategic partner with KU, KUMC, and the Kansas Board of Regents. It must have the confidence of Stowers and the ability to strengthen productive relations among Stowers, KUMC, UMKC, and KC-Mo hospitals. K-State and UM-Columbia have important roles to play.
This leadership group also must have the influence to engage powerfully with the Governors and legislative leaders of both states to get academic, political, and philanthropic strategies coordinated fast. In our opinion, the leadership entity should not be a stakeholder group, with the inclination to spread money around, but rather an entity that will focus relentlessly on quality, strategic momentum, and accountability. Stakeholders should have a strong say, but the strategy needs to be in the hands of a group whose fiduciary anchor is the greater good of Kansas City. The group needs to have the persuasive power that comes with the ability to deploy substantial dollars.
It may be that the reformed, muscular KCALSI that is under discussion is such a group. Or it may be better to create a private 501(c)(3) life sciences investment board that would control the nucleus philanthropic fund we have recommended. In our opinion, the life sciences leadership group should not be subsumed into an endowment board attached to any particular institution. It needs the independence to work effectively with all the institutions in the city. The major philanthropies who contribute to the nucleus fund would undoubtedly have considerable influence over how this leadership group is structured. However, we do not believe the group should be a committee representing different philanthropies. Once the group is constituted, it should represent Kansas City, not the philanthropic organizations or individual donors.
Strategy must be evergreen, and should change as circumstances and experience dictate. Thus, the leadership group must have the clear authority to revise strategy or insist on new approaches. Finally, the group must have staying power. There needs to be a continuity of strategy, investment, and oversight for 10 years. At that point, and perhaps before, it will be time for fresh thinking about life sciences strategy.
We do not exaggerate when we say that the life sciences leadership group will undertake a responsibility that is as important to the future of Kansas City, and holds as much promise of civic benefit, as any strategic enterprise in the history of the city.
To read coverage from the Lawrence Journal World, visit http://www2.ljworld.com/news/2005/oct/20/ku_med_called_boost_research/
©
The University of Kansas Medical Center