USC Medical School Announces Pay Cuts, Layoffs : Finances: Faculty, staff will bear brunt of $11.2 million in budget cuts. Potential closure of County-USC poses an even bigger threat.

Getting hit with more bleak budget news, nearly 400 faculty and staff members of the USC Medical School were told Friday that many would have to accept pay cuts, and some outright dismissal, as part of an $11.2-million spending rollback to erase the red ink that is threatening the school.

Medical School Dean Stephen J. Ryan said that at least 100 faculty members in basic medical sciences--biochemistry, cellular and molecular biology and neurobiology--will get immediate 25% pay reductions, being paid for a nine-month school year, rather than a full 12 months. He said many could make up the difference through grants.

Ryan said notification would be made over the next week to staff members whose contracts will not be renewed.

Ryan outlined the budget plan during an extraordinary open meeting on the medical school campus. After defending his investment of $52 million over the last four years to rebuild medical school facilities and bring in star faculty members, Ryan heard his own words thrown back at him.

“Your investment in the future has put us where we are,” one questioner wrote on a card read by Ryan to the audience. “The faculty and staff are paying the price. . . . We have no future.”

Ryan said making the cuts was one of the most painful decisions he ever had to make.

“These are my friends for 20 years,” he said after the hourlong question-and-answer session. “For me it was heart-rending.”

The rollback represents a 3% cut in the school’s $341-million annual budget. But Ryan said the spending rollback was more painful than it appears because the $11.2 million had to come out of his $20-million discretionary budget, much of which goes directly to pay faculty and staff.

Exactly how many faculty and staff members face salary cuts and possible separation from the university in the long term is not known. He said tenured faculty will not be affected, although they could be at some point in the future.

The biggest cuts, 27%, were in the school’s administration budget. Overall, the school employs 3,800 faculty and staff.

Though the meeting was called by Ryan to discuss the budget cuts, many of the questions dealt with a much bigger problem for the medical school: the potential closure of nearby County-USC Medical Center.

The meeting came less than a day after word surfaced that the county’s top budget officer was recommending closure of the public hospital, one of the nation’s largest, and the elimination of nearly 10,000 jobs held by physicians, nurses and other health workers.

The proposal was made by Chief Administrative Officer Sally Reed. The actual decision would have to be made by the Board of Supervisors.

Ryan and others said that if the hospital were to close it would dramatically alter the character of the medical school. Under an $80-million annual contract, the school provides all the physicians at the hospital. Faculty members also supervise more than 900 resident physicians who work there.

Asked by one questioner whether he had a contingency plan if the hospital were to close, Ryan said he did not.

“It is a little like contemplating your own death,” he said. “You don’t want to think about it.”

He said several times that he did not think the Board of Supervisors would close the hospital because of its strategic importance as the medical care provider of last resort for tens of thousands of poor patients, and as operator of one of the nation’s busiest emergency rooms.

Others said the proposal had caused a serious morale problem among medical school health workers.

“Generally everybody is very concerned about the longevity of the institution,” said Dr. Ronald L. Kaufman, the chief of staff at the medical center. “The problems that the county is facing are very real.”

Dr. Donna Shoupe, a gynecologist, said Ryan had a tough job, trying to deal with shrinking revenues while also trying to build up the school. “We are trying to survive, and we are also trying to be excellent. That is difficult balancing act,” she said. “But I am happy that we have a plan.”