Thank you, Paula, for that kind introduction. As many of you may know, Paula has been an enthusiastic supporter of the Medical University. She has served on several of our Boards, and I am very pleased to have the opportunity to thank her publicly for her dedication to the University.

It is a great privilege and honor for me to be asked to address you this afternoon. With the beginning of the legislative session, there are many issues on your agenda, and I feel fortunate that amongst these many topics you are able to devote some attention to the Medical University. It is of more than symbolic importance that one of the first presentations in my new role as president should be to this audience. For the fortunes of business and higher education are intimately related. In my opinion, one cannot have a strong business environment in this, or any other, state without a strong educational environment. The reverse is equally true - higher education flourishes where there is vibrant and committed leadership from the business community. I cannot emphasize enough the importance of this relationship and I will return to say more about it towards the end of my remarks.

In the spirit of giving you an overview of the Medical University, I will focus on selected highlights. This is what a friend of mine would describe as "the view from 30,000 feet." Of course, at that distance, there is a danger that everything will be out of focus. Should it all seem a blur to you, let me apologize in advance. If I am even remotely successful, however, you will leave today with a slightly more informed view of the Medical University, and even more important, what we aspire to become.

The best place to begin this overview is with the core purpose of the Medical University. In the process of a campus-wide strategic plan a few years ago, we defined our core purpose in the following words: "to preserve and optimize human life in South Carolina and beyond." You may be surprised at such a broad and sweeping statement. It may, therefore, be worth repeating: the core purpose of the Medical University is to preserve and optimize human life in South Carolina and beyond.

To me, this statement embraces the real essence of our being as an institution. It emphasizes that the Medical University is an instrument for serving the public good. Educating health care practitioners, scientific inquiry, and even caring for the sick, all noble activities, are merely means toward a common end. The goal toward which all of these activities must be directed is the improvement of the health and well being of the people of this State and beyond.

In that regard, it is clear that we have our work cut out for us. The State of South Carolina has among the highest death rates from heart disease, stroke and cancer of any state in the nation. In a state that is almost obsessed with its low performance on SATs, there is surprisingly little discussion about measures of our health status. The sad truth is that most South Carolinians can look forward to a shorter life expectancy and a higher risk of chronic conditions, such as hypertension and diabetes, than can citizens of other states.

It is not by chance that I draw comparison to the attention that has been given to SAT scores. The inter-relationship between poor educational attainment, economic disadvantage, and poor health is well documented. Low scholastic achievement leads to limited employment opportunity, which limits access to health care. The converse is also true - poor health impedes educational and occupational success.

It is a vicious cycle and one that has kept the State of South Carolina from reaching its full potential. At the dawn of a new century, it is incumbent upon the leadership of this State to devote full energy to breaking this cycle. Governor Hodges has demonstrated the courage of his convictions in addressing the educational challenges facing South Carolina. As an educator, I applaud his efforts in this arena and hope that this commitment will be sustained. At the same time, we must be equally passionate about the other elements of this triad — economic opportunity and health status.

At the Medical University, our primary focus, of course, is on improving health outcomes. We approach this broad mandate through three principal avenues — education of professionals, scientific inquiry, and patient care. I suspect that when most of you think of us from an educational point of view, your first association is with the College of Medicine. You may not be aware of the fact that we have six colleges on campus, the others being Pharmacy, Dental Medicine, Nursing, (Allied) Health Professions, and Graduate Studies. On the whole, these educational programs are in very solid shape. One of the indicators that I like to cite of our educational success is the fact that our dental student graduates last year finished the fifth highest on their national board examinations of all fifty-six dental schools. U. S. News and World Report also recognized our nurse midwifery program among the top ten in the country, and they ranked our occupational therapy program among the top 20.

In the area of research, the Medical University has grown by leaps and bounds in the past decade. Ten years ago, the institution attracted about $20 million in outside research funding. Last year, we were the first university in South Carolina to cross the $100 million annual research funding threshold. A five-fold increase in research funding within a decade is phenomenal and probably is not sustainable indefinitely. In the immediate future, however, I do believe that continued growth is likely. In order to help spur that growth along, we have a Foundation for Research Development. This affiliated organization is designed to facilitate the transfer of technology from the Medical University to the private sector. Commercialization of the university's intellectual property can bring discoveries to clinical application quicker, can provide a revenue stream to the institution, can stimulate the creativity of the faculty, and can help build economic development for the State. Already, eight new companies have been launched from these efforts and there is considerable potential for more. One of the rate limiting factors at the moment is the absence of an incubator to provide space and resources to help these fledgling companies get off the ground. We hope that through partnership with the Department of Commerce, the necessary funds for building such an incubator will be found.

On the clinical front, we continue to be the leader in the State in many aspects of specialized care. Our clinicians are recognized consistently in surveys of the "best" providers, and our hospital is recognized nationally for the excellence of its services. The greatest challenge at the moment is on the financial front. In 1997, Congress balanced the federal budget, largely on the backs of the Medicare and Medicaid programs. These reductions have hit academic medical centers particularly hard in two areas. For years, the Medicare program helped offset the extra costs of educating students and residents through a special educational supplement to teaching hospitals. Separately, through the Medicaid program, those hospitals with large numbers of uninsured patients have received a subsidy, referred to as disproportionate share. Reductions in both of these reimbursements have sent most teaching hospitals into the red — the Medical University included.

What is the University doing to try to address this challenge? As you may know, in last year's legislative session, the General Assembly voted to approve a public authority status for our medical center. This will allow us to manage the hospital with a bit more flexibility, especially in the areas of human resources and procurement. We have estimated that these regulatory changes could save us $10 million per year. During the present legislative session, we will return to ask for some technical amendments to the authorizing legislation to address some points that were not addressed in the earlier law. If all goes well, we expect the hospital authority to begin operation by July of this year.

If I might digress for a minute here, discussing the financial plight of our hospital, which is shared with others across this state, affords me the opportunity to mention the tobacco settlement funds. As you may know, the whole premise of the lawsuit brought against the tobacco companies was to recover for the states the costs of uncompensated care for persons with smoking-related illnesses. A separate part of the national settlement provided $5 billion to compensate tobacco farmers in 14 states, including South Carolina, for lost revenue.

As we enter the present legislative session, the tobacco farmers and others are lining up for a share of the State's settlement funds as well. If there were not pressing needs in the health care system, I would agree that these other priorities might be considered. The reality is, however, that the working poor are swelling the ranks of the medically uninsured, our hospitals are bleeding red ink and huge shortfalls are forecast in the State's Medicaid program. This is not a time to redirect health care dollars into other expenditures, no matter how worthy they may be. Nor is it a time to play fiscal shell games by using tobacco settlement funds to replace other health care dollars, and redirect those funds to other purposes. I hope that the Chamber will support the use of the tobacco settlement funds for the purpose for which they were intended — to supplement the State's existing expenditures on health care. Forgive me if I a little too passionate on this point — it just seems to me that this is a matter of principle more than it is a matter of budgetary exigency.

Returning now to my opening remarks, let me underscore the importance of the partnership between business and higher education. Those of us in leadership roles in the State's colleges and universities, especially at the three research universities, believe that we can play a pivotal role in the economic development of South Carolina. Having grown up in the Research Triangle and having worked within the Georgia Research Alliance, I have first-hand knowledge that a symbiotic relationship can and should evolve between an innovative business community and the intellectual resources of a university.

As we envision the future economic development of South Carolina, it is clear that the corporate/academic interface is especially critical in the area of technology-intensive industries. Given our focus at the Medical University, we can be most useful in helping to attract, nurture, and develop biomedical companies. This will not happen, however, without creating the right incentive packages to attract companies in this sector and without significant investment in the State's infrastructure to support such companies. We are already playing catch-up against our neighbors. If we do not enter the race now, we will surely fall further and further behind. The recent recommendations of the South Carolina Technology Alliance are a step in the right direction, but only a first step. I hope that the Chamber will exercise its influence with our elected representatives to allocate adequate resources to allow South Carolina to compete in the technology arena.

In closing, let me thank you again for allowing me to share these thoughts with you. As you can tell, I believe that we are poised on the threshold of extraordinary opportunities for the State of South Carolina. It is an exciting time and I look forward to working with the Chamber to make South Carolina the leader in educational, economic and health improvement. Thank you very much.