The University of Hawaii Cancer Center has issued a plan for its long-term survival but, as might have been expected, it’s turned out to be a work in progress. The biggest outstanding questions lie in the most critical area of revenue generation to become more self-sustaining.
As has been argued before, in these pages and elsewhere, an institution carrying a $10 million annual operating deficit has to cut expenses and boost revenues, and the second half of that equation remains elusive.
But on the expenditure side, the proposal to merge the cancer center with the John A. Burns School of Medicine has outlined approaches that can provide economies of scale. Lawmakers should give them time to work, while preserving a valuable asset for the state: National Cancer Institute certification for the cancer center.
For the immediate future, this means the UH preferred path should be followed, even if it means legislators allocating about $13.6 million for budgetary needs and to keep its NCI status.
The surviving bill that was the vehicle for the cancer center future planning has stalled in the Senate Ways and Means Committee. While the proposal’s not dead for the session yet, it’s going to need a push to overcome some stiff opposition from influential lawmakers.
Among the leading critics is state Rep. Isaac Choy, who chairs the House Higher Education Committee. Choy is worried that the center has become a money pit that will become a continual drain on state resources. He’s right that the center has leaned too heavily on declining cigarette tax revenues.
But the reality is that allowing the center to lose its National Cancer Institute certification may sacrifice an important credential and simply continue a downward revenue spiral. The plan projects that losing the designation would cost dearly in grant revenues and in 100 to 150 lost jobs, up to half of its current personnel.
This seems to be an unwise strategy, when support for the federal National Institutes of Health is growing with the Republican majority on Capitol Hill. Hawaii ought to position itself to gain from this policy shift.
UH describes its vision of a "Kaka‘ako Health Campus" resulting from a more synergistic operation of the two institutions — the Medical School and the cancer center — under a unified administrative services unit.
Other elements of the cost-saving plan:
» Only a core research operations administration team will remain at the center.
» Five research faculty with active NCI grants will be recruited. New recruits will be required to fund 25 percent of their staffing costs with external sources after three years on the job.
» Programs will be reorganized to minimize recruitment and save on lease costs.
The document summarizes the center’s lines of research, including investigations of how electronic cigarettes affect smoking behaviors in Hawaii. It doesn’t mention the possibility that tax revenues benefiting the center could accrue from e-cigarette sales, if enabling legislation passes.
However, the plan does acknowledge the need for new revenue sources. One proposal is favored in the Legislature: finding a private partner to buy part of the cancer center facility.
Additionally, there’s the prospect for refinancing the debt through state general obligation bonds, which fund most of the university’s buildings. Lawmakers and UH officials need to vet these options and fill in more blanks in the financial plan.
In the final analysis, lawmakers should see a federally certified research institute as something Hawaii should work to preserve. Every year more than 6,000 residents are diagnosed with cancer, and more than 2,000 will die from the disease, according to the plan, which also underscored the state’s unique ethnic mix.
That was the plan’s most persuasive argument. Of the 68 NCI-designated research centers in the nation, the one at UH will best serve the state through research relevant to its population, bringing clinical trials of new therapies that patients need. Hawaii should give such an institution every chance to streamline and survive.
