University of Miami President Donna Shalala announced Tuesday that the medical school will take difficult and painful but necessary steps next month to reduce costs, including staff cuts.In a letter to employees, she called the cuts significant but provided no details about how many employees might be laid off.

The process will take place in stages, and affected employees will be notified during the month of May, Shalala wrote. Reductions will not impact clinical care or our patients and will primarily focus on unfunded research and administrative areas.

Shalala said the cuts were necessary because of unprecedented factors including the global downturn of 2008, decreased funding for research and clinical care, plus cutbacks in payments from Jackson Health System. The Jackson reductions have had a profound effect on our finances, she wrote.

UM is not alone. Many medical schools are having to make difficult decisions, particularly because of the growing difficulties in getting research grants, said Ann Bonham, chief scientific officer of the Association of American Medical Colleges.

Sal Barbera, a former hospital executive now teaching at Florida International University, said UM created many of its own problems when it bought Cedars Medical Center in 2007 for $275 million. Paying off that debt is a significant financial responsibility, he said.

Jackson Health System, which has lost $419 million the past three years, cut its payments to UM by $16 million this year, and next fiscal year is working on a new operating agreement with UM that could mean far more drastic reductions.

In her letter, Shalala wrote that UM reaffirmed our continued commitment to our partnership with Jackson.

Since the arrival of Pascal Goldschmidt as medical school dean in 2006, expansion has been swift. UHealth, the clinical enterprise , now employs more than 8,200 employees, according to the UM website. Employees are working on 1,500 research grants, funded by $200 million in outside private and public grants.

The schools financial problems have been exacerbated by the shrinking of federal research dollars, and UM researchers, like those elsewhere, have found themselves battling for grants.

A number of medical schools are having serious conversations and looking hard at medical research, said Bonham, the AAMC officer. She said the National Institutes of Health, the primary funding source for research, is now only granting about one in every six applications, a historical low.

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‘Significant’ UM medical school cutbacks coming in May