As Gov. Nathan Deal seeks to boost state funding for cancer research and expand the ranks of post-graduate medical residents in Georgia, the state's largest teaching hospital outside Atlanta faces budget cuts that could require shrinking its own residency program.
The governor's midyear budget proposes cutting $583,000 in state funding for the Augusta hospital and clinics operated by Georgia Health Sciences University, formerly known as the Medical College of Georgia.
The latest proposed cut isn't huge by itself. But it would add to a decade of reductions that have slashed the hospital's state funding by $8.5 million -- or 23 percent -- since 2002.
"We all have to acknowledge these are tough times and we need to do more with less," said Dr. Ricardo Azziz, Georgia Health Sciences University's president. "But you're now beginning to cut into bone."
The Augusta medical university's hospital performs a key mission in which Georgia overall is lacking: training resident physicians who are fresh out of medical school. The hospital had 421 residents last year, more than 20 percent of the 2,046 residents training statewide. That's more than any Georgia school but Emory University, which routes many residents through Atlanta's Grady Memorial Hospital.
State money, which makes up only about 16 percent of Georgia Health Science University's overall funding, helps the hospital offset the high cost of training residents as well as recoup some losses from providing care to patients who can't afford it.
The proposed cuts to the medical university's hospital and affiliated clinics went unmentioned by Deal earlier this month as he singled out medical education and research as priorities in his State of the State speech to lawmakers.
The governor wants legislative budget writers to fund an additional $5 million for cancer research to help the Augusta medical school reach its goal of winning cancer center designation from the National Cancer Institute. The nod would help the hospital recruit cancer specialists, win grants and offer cutting-edge treatments. Georgia has only one nationally recognized cancer center -- Emory University in Atlanta.
Deal also wants $1.2 million to lay the groundwork for adding 400 medical residents at Georgia hospitals statewide. Georgia ranks 41st nationally when comparing states by how many accredited resident slots they offer. As a result, about 75 percent of Georgia medical school graduates leave the state to do their post-graduate work.
"We must ensure that no doctor trained in Georgia is forced to leave the state to complete his or her medical education," Deal said in his speech to legislators Jan. 10.
However, the governor's proposed cuts to the Augusta hospital could mean reductions to the residency program at Georgia Health Sciences University.
Budget documents from the state Board of Regents state that $583,000 in cuts to the hospital could end up costing the school seven or eight slots for residents.
"It is paradoxical that, in these times we want to increase the number of residents, there are these budget reductions," said Azziz, though he applauded the governor's efforts to expand residency programs elsewhere in the state.
Deal's spokesman, Brian Robinson, said the budget cuts faced by the hospital are in line with 2 percent across-the-board reductions the governor requested from the Board of Regents and most other state agencies.
"The hospital has the benefit of other funding sources," Robinson said. "And Gov. Deal committed in his State of the State address to expanding residency slots in the long term."
The Georgia Rural Health Association, which represents 34 rural hospitals statewide, is pushing to add medical resident slots in parts of the state where doctors are in short supply.
Matt Caseman, the association's executive director, said doctors who do their residency training in Georgia are more likely to remain than those who become residents outside the state.
"Georgia's known for its incredible medical schools, but it's also known as an exporter of doctors," Caseman said.
Azziz said administrators hope they can absorb the cuts by taking revenues that would normally go toward growing the university and diverting them to the hospital and its residency program. Still, he acknowledges years of previous cuts have left the budget lean. Last year, Georgia Health Sciences was forced to lay off 150 workers out of its 10,000 employees.
If the hospital has to resort to residency cutbacks, Azziz said, administrators would likely reduce salaries for resident physicians across the board rather than cut entire slots.
Another option cited in one of the Augusta university's internal briefs on the proposed budget cuts would be to reduce operating expenses, including potential cutbacks in "uninsured patient access to clinical programs." The hospital reported providing $44 million in free and reduced services to poor and insured patients in 2010, though that figure reflects prices billed to patients rather than actual costs.
Azziz said the hospital hopes it can avoid cutting services as well.
State Rep. Quincy Murphy, an Augusta Democrat and member of the budget-writing Appropriations Committee, said lawmakers might be able to restore some of the money Deal is seeking to cut.
Even if the Legislature approves the cuts, Murphy said, they may be short-lived if state revenues keep improving as they had for 18 months before taking a dip in December. He noted that state funding for the Augusta university's cancer center was eliminated completely a year ago, but now Deal wants to restore it to the same level -- $5 million per year -- received for five years under Gov. Sonny Perdue.
"We see a little bit of light at the end of the tunnel," Murphy said. "We just need them to hold on."