Dr. Trump on Sequestration – Q&A from The Cancer Letter

Federal support for cancer research could take a sharp hit if Congress does not take steps to avert dramatic budget cuts set to take effect March 1, 2013. Dr. Trump talked about how RPCI is preparing for these likely cuts in this Feb. 22, 2013 interview in The Cancer Letter (vol. 39, no. 8).

Trump: Roswell Park Prepares for Sequestration

The Cancer Letter asked Donald Trump, president and CEO of Roswell Park Cancer Institute, to discuss the impact automatic cuts in federal spending would have on his institution.

The cuts, which are scheduled to take effect on March 1, could decrease the NIH budget by about 5.1 percent, or about $265 million for NCI during the current fiscal year (The Cancer Letter, Feb. 15).

Trump spoke with Paul Goldberg, editor of The Cancer Letter. An audio recording of the conversation is posted on The Cancer Letter website.

PG: What do you think your world will look like on March 1? What’s your assumption?

DT: I think that’s one of the challenges, Paul. It’s hard to know exactly what’s going to happen. You can ask four experts and get five opinions about what the outlook is. And, in truth—and I’m not trying to be coy—we have been dealing with economic uncertainty and the downturn in NIH budgets for several years.

We spent a long time in 2007-2008 developing a strategic plan, and I think that was time well spent, because it really has allowed us to look forward. And with some planning, we have looked at ways we can modify our projected growth and investments to deal with downturns in the economy or interruptions in funding.

PG: I’ve just talked to four or five experts here in town, and all of them are basically saying the same thing, which is, “Expect sequestration.”

DT: A month ago, the experts that we talked to, at least my impression was that they thought something was going to happen.

I spent Tuesday and Wednesday [Feb. 12-13] in D.C., in a couple of different meetings, and a lot of the experts this week are saying sequestration is likely to happen. But still, what exactly does that mean? How are funds sequestered, and what are the direct impacts on a cancer center?

We have planned for the two-percent reduction in Medicare reimbursement, and we have planned for an overall eight-percent reduction in NCI funding.

We were told at our pre-submission conference with the NCI program staff—our grant is due in May of this year—we were told that they were planning a 10 percent cut in the centers’ budget. Those are the numbers we have been operating under the possibility of existing, and what we will do if these numbers come to pass?

We probably will have some investigators who have very good grants [not get funded]. I think the poster child of this is a grant that Dr. [Deborah] Erwin has in with colleagues at the University of Buffalo and Mount Sinai in New York City, and this is their second submission.

They have a ninth-percentile grant to look at colorectal cancer screening in community-based African-American populations, and if sequestration happens that probably won’t be funded—so that investigator will do something else.

There was an article in The Washington Post in the last couple of days in which [NIH Director] Dr. [Francis] Collins was bemoaning the fact that times have never been more exciting in science and opportunity and it’s a terrific concern for all of us of what we won’t be able to do because of the economic realities and the economic manipulations would happen if sequestration occurred.

PG: What would a two-percent Medicare cut do to you?

DT: Well, it’s a couple million dollars. It’s a significant amount of money, but I guess the thing that we are fortunate to be able to say is that we’ve been dealing with challenging economic times.

We’ve known that healthcare reform was not going to create—that a spigot wouldn’t open with money flowing into to provide increased support for cancer centers.

We’ve been looking for ways to increase our patient-associated revenues by developing collaborations in our region and across the state.

We’ve also worked hard on scientific collaboration that’s offered new granting opportunities and philanthropic opportunities.

We have a nice collaboration that we’ve executed in the last couple of years with the University of Rochester, wherein new philanthropic dollars have come in from the Rochester community, and we’ve complemented those dollars as well to support joint projects led by an investigator at Roswell Park and an investigator at the University of Rochester.

PG: So you will remain upright with the Medicare cuts?

DT: Yes. No question. We are a $550-million operation, so $2 million hurts, but we will go forward.

I’m cautiously optimistic, because there’s a lot of good people working very hard looking at the problem from a number of angles, both increased revenue on all on fronts as well as being as judicious in our expenses as we can that we will continue to execute our mission and provide outstanding patient care and do first rate cancer research.

PG: So what would an eight-percent cut on grants do to you?

DT: Well, that’s a $5.5 million hit.

It’s distributed across a number of different investigators. We’ve got 65 or 70 NIH projects. Everybody will take—I heard this term most recently used by [NCI Director] Dr. [Harold] Varmus— everybody will take a haircut.

Investigators will not buy that extra piece of equipment; they’ll not work as hard on Aim 3 of their grant, because they are saving money.

I think everybody will tighten the belt, and we will all also work hard in our philanthropic efforts to try to develop resources that help bridge the shortfall.

We’ve been, in a relatively small market, terrifically successful and wonderfully supported by our community, both for scientific investment as well as capital investment. We had a meeting of our fundraising board this morning, and they are as worried as we are, but passionately committed to seeing the mission at Roswell Park continue to flourish.

PG: I guess the way Dr. Varmus used the word “haircut” was as opposed to an amputation. So you are not expecting amputations?

DT: No sir. I don’t think any cancer center or medical center’s going to be facing amputations.

It’s challenging, and you can’t absorb cuts of this magnitude without careful planning, but you also have to recognize that we don’t want to throw the baby out with the bathwater if we do draconian exercises that will compromise the mission—and that’s just not an option as far as I’m concerned.

PG: It works in Washington, but not in any responsible place like a cancer center. What about the 10 percent cut in the center’s funding from NCI?

DT: That’s about $400,000—it’s not trivial.

It will have the same impact, broadly speaking, that the individual investigator grants have. The other challenge it poses for us is that we go in for our competitive renewal in May, and the base budget in which we can project our next five years is the budget that we have at the time we go in for renewal.

So our NCI budget for the core grant was cut by five percent this year, in the current year. If it is cut 10 percent next year, there’s no chance. Our CCSG budget will be anything less than the 8 or 10 or 12 percent less than we had three years ago, when we were coming off the best site visit we ever had, and the most productive science in Roswell Park’s history.

It’s a shame and it’s a challenge. We’ve been planning for it as best we can, and we’ll continue to try to husband resources that we have so we can do the highest quality science and provide great care to patients.

PG: But as a half-a-billion-dollar operation, you are okay?

DT: We are not circling the wagons or planning fire sales, by any means.

These are challenging times, but the last four to five years have been challenging to everybody in every sector of the economy.

The difficulty for us, I think, is, in addition to this being economically challenging—and we’ll have to husband our resources as I said—this comes at a particularly unpleasant time, given the wonderful opportunities that exist in science.

And the other thing that other folks can’t forget is that the training of the next generation of cancer care specialists and cancer scientists is going to be compromised by this.

Teaching and education—what are paid for by, at least in our center, resources that we developed from philanthropy and patient care work.

To the extent that other scientific work is compromised, we’ll have to contract our education mission as well. Hopefully temporarily, but you will recognize, I’m sure, that if a young person is looking around for a career path, and sees one path that is very rocky and challenging—we will have folks that decide to do something else.

I worry about that, and to the extent that happens it’s regrettable.

PG: But it’s not necessarily going to happen; right?

DT: I’m sure. The last five years, most of the experts—and I certainly don’t consider myself an expert in this arena—but most of the experts maintain that there has been a reduction in the number of the individuals going into science and pursuing academic careers.

With the funding environment of 9 or 10 or 11 percent optimistically, it’s easy to see how folks would rather try to develop their own independent career, they go into industry—and there is nothing wrong with going into industry—but most of the original discoveries in cancer happen at the cancer centers, so we don’t want to lose the cadre of individuals that will make that happen in the next generation.

PG: When you superimpose sequestration on top of the Affordable Care Act, what’s the impact?

DT: Well, they are additive. The Affordable Care Act has many positive attributes to it, in terms of access of patients to care, access of patients to clinical trials, but part of the motivation for the affordable care act was to try to contain healthcare expenditures.

So we are looking at a likelihood of our reimbursements continuing to be challenged, and what we’re doing internally and in our region is trying to work closely with our payer community, emphasizing the importance of care at a cancer center, and working with the payers to try to develop the programs that most benefit the their members and still bring the care of a comprehensive cancer center to each of those members in an affordable way.

And there are some novel projects developing that I hope will be able to demonstrate what can be done with partnerships that I think can be very productive, but it’s going to take some work.

But we have to do the work because the healthcare dollar is getting a little bit smaller every year, and we have to work hard to maintain our contribution to the care of patients and do it in a way that’s economically viable.

PG: But do you see any places where there could be some offsets from affordable care act money that you don’t have now but could be coming in?

DT: No I don’t see any of those offsets right at the moment. [Consider] the device tax. At one level, that sounds like a nice idea, it gets the companies to pay for the cost of medical care, but we all should recognize that the companies are going to pass that cost on to the consumer as soon as they can.

I don’t see any new sources of revenue.

There will be some opportunities where the— I’m trying to remember the acronym—where the patient centered outcomes research, and [comparative effectiveness research], but those large population bases, there is money for those kinds of studies, and that’s an advantage, and will be facilitatory of some work, but that’s not the driving work in most cancer centers.

It’s important work and can be developed. But for the moment, those of us who don’t have large programs in that arena are not going to invest in trying to create them, but rather try to work hard to maintain the programs that we have.

PG: So, overall, you are still seeing being able to navigate this.

DT: If I didn’t, I wouldn’t keep doing this. It’s going to be challenging, but as I’ve said we’ve been dealing with challenges for several years.

We are fortunate to have stepped back and tried to plan strategically, and we have invested, and sometimes slowed investment in certain areas to deal with the economic winds and snowstorms. I think we are going to do okay, but we have to keep our eyes open, and it will be challenging.

PG: Let me present you with this hypothetical situation: Sequestration goes into effect on March 1. Then people in Washington come to their senses on let’s say March 14 or 28. Will there be permanent harm done to your institution?

DT: No. I think if the sequestration goes into effect and they don’t come to their senses until June and put in some fixes, there will be challenges, but I won’t accept a hypothesis there will be permanent harm.

We are doing pretty well, and I’m confident we will continue to do pretty well, as long as we keep our eye on the ball.

PG: So there is still time then to work it out.

DT: They are going to work it out some way, somehow. Exactly what it looks like is certainly not clear to me.

But my intuition, for what that’s worth—probably not much—is that there will be sequestration and then there will be an adaptation to sequestration that will reduce the pain a little bit, but we are all going to have to tighten our belts and continue to deal with the fact that the granting environment will be more and more competitive.

We will have to invest our money wisely, and we’ll have to take every opportunity to develop synergistic programs, working with new partners, doing things in new ways, that will help us achieve our mission— because ultimately the mission is what has to drive what we are doing. And I’m pleased with how our institution has responded over the last few years to the economic pressures. I think nobody likes it, but we’re doing okay.

PG: Do you think NCI should do something differently?

DT: I’m not sure what else they can do differently. I think there is recognition that almost every economic operation in the country can do things better, whether it’s in industry or science or education, and so there are opportunities for saving and new ways of doing things, but I think the leaders at the NCI and the NIH are making a strong case—Dr. Collins interview in The Washington Post is an example.

He is pointing out that, to the extent that we don’t invest in research, we are compromising the future of our citizens and the economic vitality of many sectors of our economy.

And we have to keep making that case to the legislators, and the legislators have their own challenges, given the fact that money isn’t growing on trees now. But I think the NIH and NCI folks are doing a good job given the fact that they are dealing with a difficult situation.