Chancellor: Brody School of Medicine to remain open | Eastern North Carolina Now

    Publisher's note: This post, by Kelsey Padgett, originally appeared in The East Carolinian, and was submitted to BCN by Betty Myrphy. Story

    Chancellor Steve Ballard released a statement Sunday to assure supporters of the Brody School of Medicine that "there are no plans to close the Brody School now or in the future."

    The statement was sent out in response to accusations made last week that the Brody School is in danger of closing its doors due to financial hardships.

    Last fiscal year, Brody lost $14 million dollars. Also, ECU Physicians, the clinical practice of Brody, is required to keep operating expenses for 90 days, or about $39.5 million, in reserve in order to remain accredited. At this time the practice has 72 days available, totaling $31.6 million.

    In the last five years, Brody has had to make up for a cumulative, permanent state budget cut of about 19 percent per year.

    The continued cuts in the funding by the state, legislative restrictions on how physicians can receive payment for services and a limited ability to collect debt for provided services were a major contributor to the losses faced by the school last year.

    Brody also provides service to a high percentage of patients who are uninsured or have Medicaid, which doesn't fully cover the cost of their care.

    Low tuition and fees charged by Brody prevents it from following the private school model of being tuition-funded.

    In Ballard's statement, he explains how Brody's funding model is unique.

    "Unlike most academic medical centers, we do not own our teaching hospital and that sets us apart from other medical schools in the state," said Ballard. "While we have a highly successful partnership with Vidant Medical Center to provide a teaching hospital, which provides us payment for services provided, there are significant legal restrictions for an independent hospital to fund a medical school that is under separate ownership. Because of these factors we have always and will continue to require strong state support."

    Kathryn Kennedy, chief of communication for health sciences, said that losses like last year's cannot and will not continue, because it could cause Brody to deplete its cash reserves in the next three to five years.

    In order for Brody get back on track fiscally, steps are being taken to increase revenue and reduce what is being spent. Administrators are also seeking funding from programs that aren't mandatorily set for the education of medical students or the region's health needs.

    Kennedy said that administrators are also working hard in Raleigh to inform leaders how important Brody is to the health and economy of our region.

    The School of Medicine is currently a leading employer in eastern North Carolina with 1,800 faculty and staff on its payroll.

    In addition, 24 percent of physicians in the eastern region are older than 60-years-old, and Brody graduates help to fill those positions as older physicians retire. Most graduates stay in the eastern North Carolina to practice general medicine.

    Factors like these lead to Brody's nomination by the UNC Board of Governors to receive an additional $8 million a year in recurring funds.

    As of today, Brody is breaking even for this fiscal year, but Kennedy says that's not enough. Without profit, cash reserves that are essential to long-term operation cannot be built up and investments for the future cannot be made.

    "We have every intention to work and fight for the continued existence of the Brody School of Medicine," said Paul Cunningham, medical school dean.

    Brody was successfully re-accredited in 2013-14 by the Liaison Committee on Medical Education.

    Kennedy said that administrators do not currently believe that the school's accreditation is in jeopardy, but the association is aware of the challenges that Brody is facing financially.

    Brody is scheduled for a comprehensive review by the accrediting agency in 2019-20.