EVMS. A SPECIAL REPORT.
The school is a success story despite financial hurdles: quality graduates, achievements in research. Yet the hurdles remain, with real questions about whether it can reach its potential.
Published: October 17, 2004
Section: Flavor/Gracious Livingront, page A1
Source: KATRICE HARDY AND BILL SIZEMORE
© 2004- Landmark Communications Inc.
NORFOLK - BY KATRICE HARDY AND BILL SIZEMORE THE VIRGINIAN-PILOT


NORFOLK - A cure for diabetes. Birth-control methods to stop AIDS in the Third World. A technology to diagnose cancer years before it seeps into the human body.

Lofty goals for one of the nation's youngest medical colleges - even one that in its infancy gave America its first "test-tube baby." Eastern Virginia Medical School researchers are working to add to that accomplishment.

But as a team from a national accrediting agency arrives this week for a long-scheduled review of EVMS' operations, a series of setbacks has raised questions about whether the school's record of overachievement will continue. Those setbacks could hinder the progress in health care that EVMS has brought to Hampton Roads.

In 2001, the school made national headlines by boldly marching into the world of stem-cell research, only to pull out of the work six months later after facing intense criticism.

Budget shortfalls forced EVMS to forgo faculty raises for two of the first four years of the new millennium, and the school's endowment - already one of the smallest among U.S. medical schools - slid into a three-year decline.

Last year, school administrators were startled when their long-term partner, Sentara Healthcare, walked away from a deal to jointly develop a high-tech cancer center. EVMS had been counting on the project to bolster its finances and strengthen its footing in one of medicine's fastest-growing fields.

There were more shock waves in June when the school's dean, Dr. Evan R. Farmer, abruptly announced that he was leaving because of differences with other top administrators.

The departure brought back into the spotlight a long-standing problem that EVMS had appeared to lay to rest: turnover in its senior ranks.

It also spurred criticism of EVMS' president, Dr. J. Sumner Bell, who has ruffled feathers by airing EVMS' problems publicly and, some would say, indelicately. Bell's public appraisal of Farmer's alleged shortcomings was undignified, Bell's detractors said, and was meant to divert attention from his failings as a leader.

The fallout from these upheavals has been a growing sense of unease among faculty and friends of the school.

Fund raising has suffered. There are signs that faculty morale has waned. Perhaps most worrisome of all: Some high-profile researchers have bolted, prompting fears of a "brain drain." For medical schools, top-flight researchers are the foundation for success. They pioneer the innovations that bring in money and prestige and, in turn, the best students and teachers.

EVMS leaders say they have taken steps to steady the ship; they have also used the setbacks to examine what many say are fundamental problems rooted in the school's founding three decades ago. Promises made then have kept EVMS well behind Virginia's two other medical schools in state financial support and involvement in the most lucrative health fields.

The school's self-exam gained urgency in recent months as EVMS prepared for the critical review by the Liaison Committee on Medical Education, the main accrediting body for medical schools.

Such reviews are routine, and school officials say they have no reason to believe they will receive anything less than eight more years of accreditation. They say that the many hours they have spent preparing for the review are customary and time well spent: A loss of accreditation would keep students from taking board exams or joining residency programs.

EVMS still has plenty of successes to crow about, its leaders say. Just last month, the school received a $19 mill ion payout from a leading pharmaceutical company for rights to the profits from a birth-control drug developed by EVMS researchers. That product, Seasonale, was the first commercial application of EVMS research in the school's 31-year history.

The school also continues to benefit from a loyal base of students, faculty, alumni and grateful patients.

Still, there is wide agreement that, despite its achievements, EVMS has not fully seized its potential as a research center and a solution to Hampton Roads' most pressing health problems.

Twenty-three students entered what was then Leigh Memorial Hospital one September day in 1973.

They had been chosen out of a field of 1,069 to be a part of the first class of the newly created EVMS.

The privilege came with intense scrutiny.

"I've been dreaming about this place for 10 years," George Sakakini , a Hampden-Sydney College graduate, said then. "It's really a dream come true."

Sakakini is now a Navy doctor and the head of the EVMS medical alumni association.

That day, still etched in the minds of the school's founders, was a feat in itself.

A lot of sweat and moxie - and $18 million - were needed to create the school. It was the largest community fund-raising drive in Hampton Roads history.

EVMS founders weren't daunted by the challenge or put off by the lack of support from a vocal group of doctors who saw the school as competition.

Hampton Roads had a severe shortage of family doctors and a known lack of quality health care. A medical school was the solution, the founders believed.

EVMS, one of the dozen youngest U.S. medical schools, has soared past its beginnings.

Twenty years ago, EVMS wasn't the top choice for about 80 percent of its incoming students. The school attracted few of the nation's top medical school applicants.

Today, EVMS students score above the average on national tests. And more than 50 percent of the school's entering class each fall selects EVMS as their top choice.

Many say they attend EVMS because of the personal attention they get from faculty.

"I enjoy the collaborative spirit here," said Jessica Drummond, a second-year medical student from Arlington .

"It's not as competitive an environment as some other schools might have been," said Drummond, a University of Virginia graduate. "That's one of the reasons I wanted to come here, coming from U.Va., which is an extremely competitive place."

The school's founders say EVMS has accomplished what they set out to do: improve the quality of care and increase the number of doctors in the region.

Between 1970 and 1980, EVMS' first decade, the region doubled its number of physicians relative to its population, according to U.S. census data.

About 40 percent of EVMS' 2,377 graduating medical students have remained in the region.

And the school's faculty physicians play a major role in delivering health care. This past year, faculty doctors handled about 400,000 patient visits.

"We have done an awful lot with a little," said C. Donald Combs, EVMS vice president for planning and program development.

Jim Dahling, president and chief executive officer of Children's Hospital of The King's Daughters, said the school helps hospitals attract high-quality physicians.

David Bernd, CEO of Sentara Healthcare, said there wouldn't be a Level I trauma center in South Hampton Roads without EVMS. Level I is a designation that allows hospitals to handle the most complicated emergency situations.

At Sentara Norfolk General, the only Level I hospital in South Hampton Roads, EVMS surgeons staff the trauma unit.

They are the backbone of that service, Bernd said.

EVMS also provides the region's hospitals with residents, medical graduates who are undergoing clinical training. Sentara uses more than 130 of EVMS' 322 residents.

In addition to training doctors, EVMS offers degree programs in other health-care professions, from clinical psychology to art therapy.

EVMS' biggest claim to fame is its reproductive work. Early in the school's history, in 1981, its scientists were responsible for the birth of the first baby in the United States through in-vitro fertilization. The baby was born after years of opposition by state and federal lawmakers to in-vitro fertilization.

The birth lured other notable reproductive specialists to what eventually became the Jones Institute for Reproductive Medicine.

While it racked up its achievements, however, the school was being held back on other fronts by decisions made in its infancy.

Its founders had chosen a structure that only a handful of other medical schools in the nation have adopted - one that kept EVMS independent of any other university and without a hospital of its own.

The decision was pragmatic, forced by politics and limited money.

There were already two state medical schools, at Virginia Commonwealth University and U.Va., and lawmakers weren't willing to embrace the financial obligations of a third. Incorporating a hospital, meanwhile, would have further strained relations with medical providers who were already wary about the prospect of competition from the new school.

But EVMS was left at a significant disadvantage financially.

In establishing themedical school - its board members are appointed by local cities and a fund-raising foundation - EVMS founders agreed to operate with a limited amount of state support.

That tradition has held. Even today, EVMS receives about half of what the other two Virginia medical schools get per in-state student. Total state support for the Norfolk school was less than $12 million last year. It would have received almost double that amount - $ 22 million - were its funding formula similar to that in place for the medical schools at VCU and U.Va., Combs said.

EVMS' current leaders say some disparity is understandable, given that the school is still not part of the state university system. But they contend that EVMS serves a large enough public purpose to warrant more state support. They want the General Assembly, during its session that begins in January, to increase annual funding by $4 million.

Perhaps even more harmful to its finances has been EVMS' tradition, established early on, of not stepping on other health providers' toes.

On average, the nation's 125 medical schools get nearly half of their revenue from hospital fees and the care provided by their faculty physicians. If EVMS followed the trend, it would be pulling in at least $75 million a year from those clinical operations. But in its last fiscal year, EVMS got less than 30 percent of its revenue from patient care - about $45 million.

Over the decades, the school has surrendered potentially hundreds of millions of dollars in revenue because its clinical operation is relatively small.

EVMS' full-time faculty includes no doctors in some of the most lucrative medical specialties - cardiology, orthopedics, gastroenterology and neurosurgery, to name a few.

And the school has suffered some significant losses of doctors in fields in which it had footholds. In the late 1990s, for example, nearly the entire EVMS pediatric faculty, which doubles as the medical staff at Children's Hospital of The King's Daughters, reorganized itself as a for-profit practice. As a result, EVMS' patient care revenue plummeted by nearly one-quarter. Though it has been rebounding in the past few years, it is still below its peak in the mid-1990s.

Some think that the way for the school to undo its disadvantage is to begin building its own clinical facilities - not necessarily a hospital but at least outpatient centers.

An outpatient surgical center "is certainly something that should be explored," said Dr. L.D. Britt, chairman of the EVMS surgery department. "There's nothing wrong with competition. ? I don't think there's anything in the private sector that's a sacred cow."

Perhaps no episode better illustrates the problems EVMS' financial difficulties have created than the controversy over the school's stem-cell research.

In 2001, two decades after putting EVMS on the leading edge of reproductive medicine with their in-vitro triumph, the scientists at the Jones Institute were at it again.

The institute announced that, for the first time in the United States, it had created human embryos for harvesting stem cells, which many scientists believe could ultimately yield revolutionary treatments for diseases such as Alzheimer's and diabetes. But the work went a step beyond stem-cell research elsewhere, which used "left-over" fertilized eggs from in-vitro fertilization clinics.

Just as they did in 1981, the researchers encountered opposition. Critics accused them of playing God.

Sign-toting protesters held a prayer vigil in front of the school. Gov. Jim Gilmore launched an investigation to make sure no state money was being used. Even members of Congress, President Bush and Pope John Paul II weighed in against the work.

Unlike in 1981, however, the school yielded to the pressure. The reason: Its financial cushion was too small to risk losing EVMS' state funding.

"If it had been my company and I'd had a lot of money, I would have probably said, 'Let's keep going, fellas,'u2009" said Harry T. Lester, rector of the EVMS Board of Visitors. "But ? we were at the time getting $14 million a year from the state. I wouldn't have wanted to be the rector - or the president - who said, 'Risk $14 million a year so that we can be on the cutting edge.'u2009"

The decision stirred resentment among Jones Institute scientists.

Dr. Howard Jones, a co-founder of the institute and now a professor emeritus at EVMS, said in a recent interview that the stem-cell incident signaled a retreat from a commitment to cutting-edge research.

Jones, still vigorous at 93, remains a vital force at EVMS. He maintains a steady work schedule and lectures at conferences in addition to caring for his wife, Georgeanna, the other institute co-founder, who has Alzheimer's.

Jones said the ethical issues raised in the stem-cell controversy were the same as those he and his wife encountered in their pioneering in-vitro fertilization work.

Now medical schools at Harvard University and elsewhere are spending millions on stem-cell research. Just two months ago, a team of researchers in England got permission to do exactly what EVMS was criticized for. And in a ballot initiative next month, California voters will be asked to approve a $3 billion public investment in stem-cell research.

"Twenty years before, the medical school was a lighthouse. They missed being a lighthouse 20 years later," Jones said. "We could have been No. 1, and we're No. Zero."

One of the most significant repercussions of the controversy has been the loss of researchers.

Roger G. Gosden, an internationally known reproductive biologist, left his job as the Jones Institute's scientific director this fall after three years on the job. Gosden, who joined the faculty at Cornell University in New York, declined an interview, but in an e-mail to The Virginian-Pilot, he expressed a loss of confidence in the EVMS administration.

"I accepted appointment as scientific director on the assumption that the school values the Jones Institute as a prestigious center for research, education and clinical treatment," Gosden wrote. "Alas, that has not been my perception."

Jones said Gosden's departure is a serious blow to the school.

"He hit here about the time of that stem-cell blowup," Jones said. "Just as he came up to bat, he got hit by the pitcher before he ever took a swing at the ball."

Gosden's departure also was propelled by the school's decision last year to pull the plug on a satellite fertility clinic that the institute had opened in Northern Virginia in 2001.

The reason: again, finances.

The facility had been launched without a proper business plan and was losing money, Bell said.

But Dr. Suheil Muasher, who ran the clinic for the school, disputes Bell's account. Muasher bought the facility last winter.

"The business plan projected that this place was not going to start breaking even until maybe the third year," Muasher said.

The clinic is now "significantly in the black," he said.

"The current administration tried to blame the old administration" for the clinic's failure to turn a quick profit, Muasher said. "...Unfortunately this has been going on at the medical school in other circumstances as well."

In July 2003, Harry Lester read a newspaper item that spoiled his breakfast.

Sentara Healthcare and Virginia Oncology Associates were teaming up to build South Hampton Roads' first free-standing cancer centers, promising to offer a full range of services under one roof.

Lester, 58, had just taken office as rector of EVMS' governing body. He is largely retired from a career in commercial real estate. Like everyone else on the 17-member EVMS board, he is an unpaid volunteer.

A few years ago, he served on the board of the then-cash-strapped Chrysler Museum. For two years he has been a member of the Commonwealth Transportation Board, which has its own money woes.

Now, as essentially the chairman of the board of EVMS, he's the most powerful voice in the institution. The medical school, Lester said, is the most challenging assignment he has undertaken.

EVMS had been negotiating with Sentara to develop a joint cancer center. It had spent $700,000 and recruited a top cancer specialist, Dr. Joanne Mortimer. But Sentara had blown EVMS' plans out of the water and made a deal with a for-profit doctors' group.

And Lester had to find out about it in the newspaper.

"You can imagine that wouldn't make me feel very good," he said.

The setback with Sentara is another chapter in the "brain drain" of top scientists from the school. Mortimer has left EVMS for the University of California at San Diego. She did not respond to an interview request.

The aborted EVMS-Sentara cancer venture also starkly illustrates the limits on the medical school's revenue stream. In order to grow its finances, the school is dependent on developing ventures with its hospital partners. By almost anyone's account, those partnerships have frequently been dysfunctional.

EVMS President Bell, who led the negotiations with Sentara, said it was as if "your major partner takes you to the dance and then leaves with another girl.

"We felt like we got used."

Sentara has not publicly addressed the matter other than to say it has tried to ensure that its cancer services complement EVMS' academic mission.

EVMS has hired a consultant to study its relationships with its hospital partners. Bell says the school remains committed to finding new ways to serve the area's cancer patients. It is hoping it can still do that with Sentara.

If there is a silver lining in EVMS' fiscal clouds, it is research money. Researchers can attract millions of dollars a year from the federal government and private industry.

During the years, EVMS has pulled in an increasing amount of research dollars, topping $40 million last year. Half of that support went to the obstetrics and gynecology department, home to the Jones Institute.

The department's most lucrative endeavor is CONRAD, formerly known as Contraceptive Research and Development. The U.S. Agency for International Development has given the school more than $100 million to create birth-control methods capable of combating AIDS and other sexually transmitted diseases in the developing world. CONRAD has also received nearly $40 million from the Bill & Melinda Gates Foundation.

But the school has been less successful in winning grants from the National Institutes of Health, the most prestigious and competitive source of research dollars. EVMS' $4 million in NIH grants last year was dwarfed by the money flowing to Virginia's other two medical schools: $60 million at VCU and $122 million at U.Va.

At the top of interim dean Gerald J. Pepe's list is getting more of the school's research funded by the NIH.

The school's work in proteomics is NIH-funded. Proteomics uses the latest technologies to identify the protein "fingerprints" that cancers leave behind. EVMS researchers hope to use their findings to detect cancers in earlier stages.

Recently the school has begun profiting from technology transfers - profit-sharing payments from companies that turn researchers' inventions into commercial products.

Last month it received a $19 million payoff from Barr Pharmaceuticals Inc. for the patent rights to Seasonale, a birth-control pill that reduces women's menstrual periods from 13 to four per year. Seasonale was developed at the Jones Institute.

The school also spun off its first partnership with a faculty startup company to seek federal approval for a version of a drug that reduces visible blood vessels in the cornea.

Meanwhile, Procter & Gamble has invested millions in another promising research product, a protein called INGAP that was co-discovered by a scientist at EVMS' Strelitz Diabetes Institutes. The substance has been shown to reverse diabetes in animals and is now being tested on humans.

As the school has made progress in its research, administrators have tried to narrow in on key areas to focus on.

Bell rattles off the list without blinking: cancer, obesity and diabetes, geriatrics, women's health and educational innovation.

The needs are indisputable. On several key health measures tracked by the Virginia Department of Health - including cancer, diabetes and infant mortality - South Hampton Roads has higher incidence rates than the state as a whole.

Focusing EVMS' research will help the school improve its profile and collect more fund-raising dollars, Bell said.

"That really gives you the connective tissue, the neural network, the brain power, the prestige to be an academic health center," he said.

College convocation speeches are typically bland affairs. But Bell's address on EVMS' 30th anniversary in November 2003 broke the mold.

"You could have heard a pin drop," said Helen Sonner, the school's director of institutional advancement.

"It was a surreal experience," Bell said. "It was motivational to some and threatening to others."

Bell, 54, has held his $295,000-a-year job since 2000. A gastroenterologist and former EVMS faculty member, the Portsmouth native was named president after serving on the Board of Visitors and the presidential search committee. Broad-shouldered and brusque, he has made waves by seeking to run the school on a business model.

From the earliest days of his tenure, Bell felt himself hamstrung by EVMS' financial limitations. In his convocation speech, written with the help of a consultant, he laid them out publicly.

Some of the school's difficulties, he declared, stem from the concepts on which it was started.

"Founded on a shoestring, EVMS started out undercapitalized, and it remains undercapitalized," he said.

"Some of our difficulties," Bell went on, "stem from an impatience to make a big splash, and the mistaken sense that new centers and institutes are the best indicator of progress..."

"The institution hasn't functioned as one institution, but as a patchwork of individual programs and institutes, governed by an unmanageable web of special agreements..."

What was Bell talking about? What programs? What institutes?

"We got the distinct signal that among the things he might have been talking about was the desire to do away with or consolidate the Jones Institute Foundation," Dr. Howard Jones said.

The speech generated a similar reaction at the Diabetes Institutes Foundation, which supports the Strelitz Diabetes Institutes. The two foundations are independent fund-raising entities organized in the 1980s. Each has raised about $13 million for the school.

"We were astounded at Dr. Bell's adversarial position," said C.G. Harris, a member of the diabetes foundation board. "We give them millions of dollars, and they don't like us?"

His purpose wasn't to offend anyone, Bell said, but to exert control over a sprawling, Hydra-headed organization.

"The school was thrust into the national spotlight by the Jones Institute's success," he said in an interview. "But ... it's like building a penthouse before you build the basic structure of the house."

The two foundations were already feeling on the defensive. For a year before the convocation speech, Bell had been trying to merge them into EVMS' central fund-raising apparatus. His speech hardened their resistance during months of negotiations that would follow.

During the summer, the administration backed down: The Jones and diabetes foundations would remain as independent fund-raising groups. All the parties now say they're hopeful of an improved relationship.

But the fundamental problem remains: a lack of money.

"That is at the bottom of all the things that are going on," said Dr. Clarence Holland, a former rector of the board and a general practitioner in Virginia Beach. "The school, bless its heart, has been hanging by a thread for years. ? I was on the board about six years, and that just ate at my gut all the time."

By the time of Bell's convocation speech, budget woes had forced EVMS' board to freeze faculty and staff wages for the second straight year and to increase tuition by 15 percent. Tuition rose an additional 5 percent this fall.

Another disturbing indicator of the school's financial weakness: Its endowment, never very robust by the standards of more established schools, declined between 2000 and 2003. It has increased slightly in the past year. Bell himself has donated $124,000.

School officials have attributed most of the endowment's slide to declines in investment holdings during the weak stock market. It didn't help that the falloff coincided with some temporary cuts in state funding.

In his convocation speech and on other occasions, Bell has also blamed "past overspending" for a large part of EVMS' problems, another assertion that has stirred some resentment.

Edward E. Brickell, the former Virginia Beach school superintendent who preceded Bell as president, didn't take Bell's remarks sitting down. In an August letter that was widely distributed in the EVMS community, Brickell noted that every budget he submitted in his 12 years as president was balanced and included pay raises.

"I believe that the operating budget has increased substantially since I left office, and it seems reasonable to assume that spending decisions since 2000 may have had some impact on the fiscal condition of the school," Brickell wrote.

The convocation speech had forced some festering issues into the spotlight. Some had started to question whether Bell was the right man for the school's top job. More buzz over the president came with the sudden departure of Dean Farmer in June.

Prodded by the faculty leadership, the board set the wheels in motion for the appointment of interim dean Pepe, a longtime faculty member who chairs the department of physiological sciences.

Pepe's appointment has helped calm the faculty and cool some of the Bell criticism.

Farmer was the school's eighth permanent dean in 31 years. The average tenure of EVMS deans, including interim appointments, has been about 2.75 years, half the national average of 5.5 years. Counting interim appointments, the school has had 11 deans.

"Is it 11 personality problems, or do we have a structural problem?" That's how Lester, the rector, framed the issue at an August board meeting.

Farmer has declined to make any public comment.

Bell, in a June interview with The Virginian-Pilot, blamed the departing dean for a variety of problems, including accreditation difficulties encountered by two EVMS academic programs during the past year. Bell's public criticism didn't sit well with many on campus, including Lester.

"I'm not going to talk about it," Lester said recently. "The last time somebody talked about it, it set our school back a long way. Dr. Bell should not have talked about personnel issues with any reporter. He made a mistake."

Still, Lester said it's important that Bell remain in charge while the school faces its most immediate challenge: satisfying the Liaison Committee on Medical Education, the panel that accredits medical education programs.

Accreditation is crucial to a medical school because without it, graduates would be unable to take board exams or enroll in residency programs.

After the five-member survey team from the accrediting committee finishes its campus visit this week, the panel will write a preliminary report and send it to the school for its comments. The committee's final report is expected in the spring.

EVMS officials say they're not worried about the review.

"I have confidence we're going to get there, but I'd like to have a captain of the ship, thank you very much," Lester said. "And we've got one. His name is Dr. Bell, and I think he's going to do just fine for us. I'm aware that there are some people who don't agree with me. ? He's my guy."

Still, a "self-study" at EVMS, carried out this year in preparation for the impending review, revealed a pervasive sense of unease among the faculty. "Faculty morale is lower than anyone would like it to be," the study concluded.

Faculty members expressed concerns about inadequate fund-raising efforts and pressure to bring in more research grants and clinical revenue at the expense of teaching. Tension with partners, particularly hospitals, as they pursue their own objectives - often in direct competition with EVMS' interests - was another worry.

Lester said the board is listening to the faculty's concerns.

With a strong emphasis on research and a strong administration in place, EVMS will flourish, he said.

"We're going to get through all this," he said. "I hope we're going to leave it a little better than we found it."

nu2009Reach Katrice Hardy at 222-5857 or katrice.franklin@pilotonline.com

nu2009Reach Bill Sizemore at 446-2276 or bill.sizemore@pilotonline.com