In a year that saw a number of new faculty appointments, continued capital expansion, and the development of strategic plans for sustaining its clinical enterprise, the 1996-97 financial picture for P&S was positive. The operating budget grew to more than $560 million, a 6 percent increase over the previous year. The bulk of that increase was the result of increased activity in academic departments, centers, institutes, and programs. The budget also showed significant growth in annual debt service expenditures consistent with the ongoing capital expansion of the school's physical plant. Overall revenues were stable, growing by 6 percent, with particularly strong performance in patent and gift income. Other major items of revenue--tuition, sponsored research, and faculty practice income--all showed modest growth for the year.

The demand for the school's academic programs remained robust in 1996-97. The physician training program has remained highly competitive, with more than 4,100 applications for 150 first-year places. The basic science graduate programs, occupational and physical therapy, human nutrition, and medical informatics also experienced strong admissions demand, in some cases doubling in the last six years.

The strong growth in the P&S endowment will help preserve the school's long-term future. During the past year, the market value of the endowment grew $608 million, an increase of $100 million (20 percent) over last year. This endowment growth largely reflects a vigorous investment market, but it also includes new contributions to endowment principal particularly endowed chairs and professorships. The school now has 71 endowed chairs, an increase of 28 chairs over the past nine years. Research, both basic and clinical, remains a central component of the school's mission.


P&S ranks in the top tier among medical schools in federal grants as the faculty continue to compete well for research grants over a wide range of academic disciplines and areas of interest. During 1996-97, expenditures under government and non-government sponsored awards grew to $155 million, an increase of 4 percent over the previous year. Those expenditures include both direct and indirect expenses for grants and contracts running directly through P&S. When we add the research activity of P&S faculty at affiliated organizations--such as the New York State Psychiatric Institute and Presbyterian Hospital--the total research portfolio for 1996-97 climbs to roughly $240 million.


Along with government sponsored research, partnerships with industry have also provided funds to support scientific investigation. Through a strong technology transfer program, patent income continued to show strong growth generating additional sources of revenue to support new research endeavors. During the past year, the University also completed a major multi-year agreement with VIMRx Pharmaceuticals that will provide $30 million over a five-year period to support the work of the Columbia Genome Center. Coupled with government grant support and University and school contributions, that new partnership will play a critical role in underwriting new genetics research and strengthening the Columbia Genome Center.

P&S faculty practice income accounts for about 40 percent of the school's budget. Practice income increased 6.5 percent over the previous year to $224 million despite continued changes in the health care marketplace. Almost $9 million of this clinical income was provided to the school through its assessment on clinical income. That money was reinvested by the dean in clinical educational and research programs and helped to underwrite new faculty recruitments and capital renovations.

    Sponsored Award Spending
        (funds in millions of dollars)


The development of a long-term strategy for the school's clinical enterprise was a major priority during the past year. The school, as well as the central University, allocated significant funds to help develop a business plan that would position P&S and the clinical faculty to respond to changing market conditions and the anticipated increase in managed care penetration. Those plans were developed with input from the clinical faculty and with the close participation of the University's trustees. Here again new partnerships have played a major role in helping to shape the school's clinical care mission. A significant collaboration was launched in early 1997 when Columbia's clinical faculty joined forces with their counterparts at Cornell University to form Columbia-Cornell Care (CCC), a managed care physicians organization and management services organization (see Partnering to Face a Challenge). CCC will seek to negotiate managed care contracts, develop new medical and business information systems, and undertake primary care development activities for both medical schools. A preliminary business plan was developed for the new organization, which will be financed from capital contributions from both Columbia and Cornell. On the Columbia side, a portion of the capital will come from equity contributions from both the school and the central University and from University loans that will be repaid from the clinical enterprise.

The new partnership between Columbia and Cornell may extend even further as CCC is now collaborating with New York and Presbyterian hospitals to form a joint managed care initiative delivery system for the physicians and the hospitals. The merger of New York and Presbyterian hospitals is evidence again of the important roles that partnerships are playing in the day-to-day activities of P&S. Although the merged New York and Presbyterian hospitals will still have two independent medical schools as academic partners, it will require close collaboration of both universities. Formal mechanisms have been put into place to facilitate that collaboration.

The decade-long effort to improve the physical plant of P&S continues. The capital expansion program was launched in 1990 and by the year 2000 we will have spent about $300 million, half of which is funded by long-term debt. The debt service on the long-term debt is reflected in the school's annual operating budget. One primary focus of the capital program over the last two years has been the development of two new buildings in the Audubon Biomedical Science and Technology Park. Once again, strategic partnerships have played a central role in Audubon's success. The first Audubon building, a commercial biotechnology facility, was funded through a partnership among the state, the city, and the University. The facility, now known as the Mary Woodard Lasker Biomedical Research Building, is almost completely occupied and is helping the University enhance its technology transfer programs and promote economic development in the community. The second building, a University research facility, was funded through a close partnership among the state, the federal government, and private philanthropy. Through generous contributions from the Fairchild Foundation and Russ Berrie, the University was able to complete the core and shell building with two built-out floors. The building, now known as the Russ Berrie Medical Science Pavilion, already houses researchers from the departments of pediatrics and genetics and components of the Columbia Genome Center.

The remaining four floors of the building are now under design and will soon house a world class diabetes center for research and clinical care (also funded through the generous support of Russ Berrie--see A New Home for Research and Diabetes Care), an expansion of the Columbia Genome Center (assisted with a major gift from an anonymous donor--see Genetics Research Increases Treatment Possibilities), and a program in cancer genetics. The top floor of the building will house a mouse facility to support the researchers in the building.

Along with the Audubon activity, major lab and office renovations were undertaken over the past year for the departments of pharmacology, surgery, medicine, pathology, orthopedic surgery, neurology, and microbiology. Those new laboratories will be home to many new investigators and will help P&S sustain and enhance its research missions.

The long-term outlook for P&S remains very positive as evidenced by the strong admissions demand for its academic programs, a steadily growing endowment, and a continued leadership role in medical research and clinical care. To position itself favorably for the future, P&S is moving ahead with plans to upgrade and expand the buildings and laboratories in which scientific research and teaching take place while continuing to develop mechanisms to generate new revenues from a number of sources, including clinical trials and patent license agreements. New partnerships with government, industry, private donors, and other health care institutions have been helpful in enabling P&S to launch new programs and remain competitive in the rapidly changing health care marketplace. The continuation of those partnerships will play a major role in the school's long-term fiscal strength.