Some hospitals opt to lease rather than build; others concentrate on clinical expansions.

Tinker Ready

When the Center for Life Science opens late next year, it will squeeze 18 floors of new lab space into a small lot off Longwood Avenue. The demand for the space in the sleek, privately owned building has been huge. Beth Israel Deaconess Medical Center (BIDMC) will lease half of the 700,000-square-foot building, while Children’s Hospital Boston and the Dana-Farber Cancer Institute have dibs on much of the rest.

But this doesn’t necessarily translate into a surge in new research at the Harvard-affiliated hospitals. In the Longwood medical area, where science is heavily funded by the National Institutes of Health (NIH), hospitals face an abrupt flattening of support from the federal agency. So, after a spurt in lab construction in the last 10 years or so, some hospitals plan to build less lab space and lease more. Others are concentrating expansion efforts on new operating rooms and other kinds of clinical space.

For example, the space BIDMC will lease doesn’t represent a major expansion in research, says Jeffrey Flier, an endocrinologist and the hospital’s chief academic officer. “A lot of people have the mistaken idea that we have hundreds of thousands of square feet of new space and that’s not true,” he says.

Instead, BIDMC sold a precious parcel of the abutting land to New Hampshire-based Lyme Properties with the goal of consolidating its scattered research operations in the new building. Flier called it a sensible approach for the times.

“Up until about two years ago, institutions like ours were feeling cramped for space,” he says. “NIH funding was robust. Now everyone is looking a little bit askance. Should we be planning for growth at the same rate that we were before?”

This sudden limit on research funding will hit hard in Longwood. While the bulk of $28.6 billion in NIH funding goes to universities, research hospitals collected $1.5 billion in 2003 (the last year for which figures are available.) And the Longwood area hospitals got a big share of that. Brigham and Women’s Hospital, along with the Dana-Farber Cancer Institute, BIDMC, and Children’s Hospital, made up four of the top five hospital recipients of NIH grants, together collecting $568 million in 2004. (Massachusetts General Hospital was the top recipient with $285 million.)

Now, after several years of increases that doubled the agency’s funding, the NIH budget is expected to remain flat or even shrink in 2007 for the second year in a row.

The years of generous NIH funding saw the rise of several towering research buildings in the Longwood area. The 12-story Smith Research Laboratories at Dana-Farber opened in 1997 and the Harvard Institutes of Medicine in 1996. The 20-story building housing the Karp Family Research Laboratories came on line at Children’s in 2003.

During this time, clinical revenues were shrinking, causing hospitals to rely more on NIH to fund the cost of research infrastructure, says Joseph Loscalzo, chair of Brigham’s department of medicine. In an April article in the New England Journal of Medicine, he warned that NIH funding limits might erode the progress that academic research centers have made in setting up new labs.

“It takes many years for institutions to develop investigators skilled in modern research techniques and to build the costly, complicated infrastructure necessary for biomedical research. Rebuilding the investigator pool and the infrastructure after a downturn is expensive and time-consuming and weakens the benefits of prior funding,” he wrote. Hospitals should seek new sources of support for research, including industry, private donors and nonprofit organizations, he added.

Still, Brigham is betting that NIH funding will be on the upswing again. It bought the old Massachusetts Mental Hospital building earlier this year and plans to open up new lab space there by 2011, even though its 2003 master plan noted that it would seek off-campus sites for its expanding research enterprise.

“We’re hedging our bets a little bit…We expect [NIH funding] will cycle and eventually we’ll need more space, hopefully just as the building comes on line,” Loscalzo says. “Space is still quite constrained here and the Brigham has been luckier than other institutions. We have not yet been greatly affected by the NIH downturn. But it will happen.”

Today, clinical expansion dominates at Longwood, driven by recent increases in insurance payment rates and rising admissions. The other major construction site in Longwood besides the Lyme lot is for a 10-story center for cardiovascular treatment at Brigham. The building, now in the works on the Francis Street side of Brigham, will add 16 new operating rooms and space for 140 beds. The planned 400,000-square-foot addition at Dana-Farber, scheduled to open in 2011, will give the clinic a new front entrance and add a chemotherapy infusion center, with some space for clinical research.

The Joslin Diabetes Center is planning a major project that includes a research building, along with clinical space and 150 units of housing. But rather than build it themselves, Joslin is in discussions with a private developer, which would build and own the building and lease space back to Joslin.