Trends in federal grants and contracts to research universities for research and development generally reflect trends in the overall federal discretionary spending. While the president and Congress whittle away at discretionary spending, it is likely that research universities will suffer a notable loss in federal support. Even if research universities receive proportionally generous treatment from the federal government, there simply is not enough money in the discretionary budget for contracts and grants to continue to grow as they have in the past two decades. Further, the precisely calculated but arbitrary methods used by the federal government to audit overhead or indirect costs of research projects funded by federal grants make for a costly accounting procedure and inefficient use of resources by the universities. The authors favor a prospective reimbursement procedure based on groups of similar universities, arguing that this will save administrative costs on the part of the federal government and spur universities to become more efficient.
University hospitals face increasingly difficult cost-containment struggles.
Traditionally focusing on tertiary care, university hospitals are now faced with competition from cheaper private medical groups and the expansion of cost-cutting HMOs. They also must cope with federal programs like Medicare and Medicaid that place strict ceilings on bills for patient care. In the past, universities could rely on their hospitals for significant soft money that could be used to support medical research and education, but almost all of these centers must now reorganize to suit the changing face of commercial medicine. Industry and academia. The relationship between research universities and private enterprise is a curious one.