Rx for medical school funding causes a stir

YAKIMA, Wash. -- A lawmaker is calling a 10 percent fee a state agency is charging a local medical school to oversee $800,000 in funds it received from the Legislature "highway robbery."

The 2009 Legislature earmarked the money from the state general fund to assist the Pacific Northwest University of Health Sciences in training new doctors over the next two years. The school's operating budget is about $10 million a year.

With the state money, the medical school will establish seven sites at medical facilities in various communities where students will be paired with doctors for a two-year training period.

In order to cover the cost of monitoring the program, the Higher Education Coordinating Board in Olympia is taking a 10 percent cut, $80,000 over two years.

Rep. Norm Johnson, R-Yakima, said it's an inflated fee that the board is assessing merely to make up for budget cuts it suffered this year.

"I think they're trying to make up their deficit on the backs of universities and colleges in the state of Washington," he said. "Maybe we need to go in and set some perimeters on them."

Rep. Eileen Cody, D-Seattle, who chairs the Heath Care and Wellness committee in the House, agrees.

Both representatives supported state funding for Yakima's medical school because it's expected to produce family physicians, something lacking nationwide, Cody said. The school enrolled its first class in the fall of 2008 and now has about 150 students in osteopathic medicine.

"I think it's silly," Cody said of the HEC board's 10 percent administrative fee. "I think (the board) could have done it for less than that."

Not so, said the HEC board's Executive Deputy Director, Don Bennett. He said a lot of time went into negotiating the contract with the university for the use of state funds and that it will require much oversight.

His staff in Olympia will spend about 32 hours a month -- one day a week -- assessing whether the school is meeting contract requirements to assure taxpayers their money is being spent appropriately, he said.

"That's part of the public accountability that we're supposed to provide," Bennett said. "We just can't leave (the money) on a stump and walk away."

The HEC board administers funding programs for individual students and helps colleges and universities plan curricula. Overseeing funds coming directly from the state's budget for student training is new, Bennett said.

If the entire $80,000 is not used over two years for administrative costs, the remaining amount will go back into the state's general fund. At that point, the contract could be amended to give the unused portion back to the school, he said.

Most of the $720,000 in state funding going to Pacific Northwest University of Health Sciences will pay for faculty members to track student progress and for faculty travel to different sites, said Gretchen Eickmeyer, the school's vice president for advancement and development.

"It's almost like starting a new business in all these communities," she said.

Next time state funds are allocated to a university for student training, lawmakers will pay closer attention to inserting language in the legislation on administrative costs, Cody said.

Since the 2009 legislation has already become law, not much can be done about it.

"Nobody thought about how much the HEC board would take out of it," the Seattle lawmaker said. "It was kind of put together at the last minute."

Rep. Deb Wallace, D-Vancouver, said administrative fees by state agencies run anywhere from 1 to 10 percent, and are usually based on the amount of oversight work involved.

"It's within the acceptable range, but it depends on the amount of work that is required," said Wallace, chairwoman of the House Higher Education Committee. "I do believe that there may be some reporting that may need to be done that requires additional staff work."

Overseeing the contract with Yakima's university is additional work for the HEC Board, which recently lost seven employees after its $7 million general fund was slashed by $1.2 million, said Bennett.

"The fact is we got less money to operate on that the year before and this is a new workload," he said. "There is no free workload."

* Phil Ferolito can be reached at 509-577-7749 or pferolito@yakimaherald.com.