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I. THE ORIGINS OF THE STABILIZATION POLICY One of the issues raised most often in the research sector is the desire for a stable and secure funding base. This issue figured prominently in the 1976 report of the President's Biomedical Research Panell/, in the 1977 IOM staff paper, "Policy Issues in the Health Sciences, 2/ and in the 1979 and 1980 reports of the Department of Health, Education, and Welfare (Health and Human Services in 1980) Steering Committee for the Development of a Health Research Strategy, chaired by Donald S. Fredrickson, Director, National Institutes of Health.3 A. HEW (HHS) Health Research Planning in 1979-80 The 1979 and 1980 HEW (HHS) reports stemmed from a concern expressed by the then secretary of the department, Joseph Califano, about the future of federal support for health research at a time when "an insufficiency of national resources to meet all competing demands makes the need for careful balancing of alternative requirements especially critical". Specifically, he called for the development of a comprehensive five-year research plan for the health-zelated agencies of the department4/. 1979 HEW report The department steering committee's 1979 report placed major emphasis on stabilizing the "science base" and established as the first priority the stabilizing of support for investigator-initiated projects (which had been NIH's first priority for some years). The chairman's overview in the 1979 report stated that, "It seems to me that any serious research planning must attend first to this fragile and unreplaceable (sic) center of the health science system"5/. It argued that, "If it is accepted that excellence is sustained by cyclical competition for support, then an equally important requirement is a predictable market for the ideas and skills subjected to that competition. Otherwise, research will cease to compete for the career attentions of the most gifted"6/. To achieve this objective, the report called for an agreement on some reasonable targets, ideally both by the Executive Branch and the Congress, which would extend beyond single-year appropriations, "even though all concerned recognize that such expressions of intent cannot be taken as binding commitments"7/. As the first health research planning initiative, the report proposed that steps be taken to establish a "long-term floor" to the capacity for funding investigator-initiated research by NIH and ADAMH An/. The 1979 report recognized that stability can be defined in many ways. For example, it could be compatible with "a steady but slow rate of growth or decrease" in program levels for research activities over a multi-year period, or it could mean maintenance of those activities at the then current F.Y. (1981) program level for an indefinite period9/. It emphasized, however, that, "in any case, stability must mean that the intended program levels will be protected from erosion by inflation''l°/. It described this kind of control in the year-to-year changes in the level of new, renewed and supplemental (competing) awards as a "minimum commitment" to this important aspect of the research effort, "independent of other special initiatives involving the science base, applications, training or transfer activities"] 1/ . At the same time, it warned of other concerns. One of these was the need for continued attention to the needs of other research components, such as centers, epidemiology, research resources, and the intramural programs. In addition, it emphasized that special attention to new investigators must accompany any stability initiative and that, if there were any indications that new investigators were having difficulty establishing research careers as a result of such an initiative, "appropriate actions should be taken to arrest that trend''l2/. 5
The 1979 report indicated that NIH proposed to award for F.Y. 1981 about 5,000 new and competing research projects and ADAMHA about 569. These F.Y. 1981 figures were accompanied by projections for later years under alternative approaches to stability--i.e., (1) with "modest" growth (from 5,000 in F.Y. 1981 to 5,931 by F.Y. 1984 for NIH and from 569 to 869 in this period for ADAMHA), (2) with "minimal" growth (to 5,436 for NIH and 719 for ADAMHA), and (3) with maintenance of the projected F.Y. 1981 levels (5,000 and 569~3/. IOM critique In a specially commissioned review of the department steering committee's 1979 report, an Institute of Medicine committee expressed grave reservations about the specific numbers and goals chosen in that report*. It pointed out that there was a serious possibility that implementation of the stabilization initiative would serve to "put a ceiling on growth rather than to provide a firm floor from which to build''l4/. In its view, the focus on the need for "predictable support" had been at the expense of the need, outlined in HEW's previously issued statement of Research Planning Principles, that support be "sustained and enhanced''l5/. It went on to say that the growth rates chosen were too restrictive for a forward-looking document, which ought to reflect the promise inherent in the knowledge gained from previous investments in research. It suggges ted that decisions to constrain health research budgets should be made with the full knowledge of lost scientific opportunities. The IOM committee report also called for renewed attention to stabilizing the entire science base, argued that the analysis should include detailed discussion and planning of research training, and expressed concern about the need for coming to grips with the problems connected with the support of young investigatorsl6/. 1980 HHS report The 1980 report of the HHS steering committee described the goals set forth in the IOM critique as "ideal goals, indisputably the horizons sought by the HHS agencies ''17/ but said the agencies can only move toward goals "at the pace and degree of directness permitted by the realities of the annual appropriations cycle''l8/. It noted that the 1979 proposal for approximately 5,000 new and competing research projects had already (that is, by December 1980) been "confirmed and made operational" in the President's F.Y. 1981 budget for NIH (although a similar initiative for ADAMHA had not been approved) and that the response of Congress had been generally positive and added that the initiative seemed to deserve further development in association with the F.Y. 1982 budget process#. It characterized the maintenance of a stable base of competing research project grants as the "most important step" toward stabilizing that base, but agreed that attention must be given to other critical elements of the research effort, as welli9/. It added that any effort to stabilize the funding of research must also take into account the important differences among the several components of NIH and ADAMHA. *In this connnection, it should be borne in mind that the projection of 5,000 competing NIH projects for F.Y. 1981 was below the actual figures of 5,200 and 5,900 for F.Y. 1978 and F.Y. 1979. #It is understood that some of the institute directors at NIH felt that the emphasis to be placed by the stabilization strategy on the research project grant line item in the budget would be a mistake and viewed it as an unnecessary limitation on their management prerogatives to allocate funds within their institutes among the various support mechanisms, including research training, research centers, etc. 6
Although the 1979 report had included projections for moderate and minimal growth to F.Y. 1984, the 1980 HHS report included only the F.Y. 1981 es timates for research pro jects (4 , 884 for NIH and 593 for ADA~lA)20/ . B. Perspective of the Policy's Chief Architect The context for the decision to recommend a stabilization figure of approximately 5,000 projects for NIH was described in a 1981 article by Donald Fredrickson, NIH director and chairman of the HlIS steering committed/. He pointed out that the annual NIH budget had expanded 13-fold between 1956 and 1966 and that, even after the dramatic rate of growth had slowed down, the NIH budget continued to increase in constant 1969 dollars through F.Y. 1979. However, he observed that "after that, the tide turned". Congress, engaged in a struggle to set budget ceilings for itself, never passed an F.Y. 1980 appropriations bill for RHS, and the stopgap continuing resolution approved for that fiscal year, due to a rapid growth in the inflation rate, represented a small reduction in purchasing power below the F.Y. 1979 appropriations22/. According to Dr. Fredrickson, the number of new and competing awards made each year is subject to considerable change, because the total number of grants in the portfolio of a given institute reflects several- cumulative years of funding. The number of competing projects funded fell from 4,600 in 1975 to 3,460 in 1976, rose in 1978 to 5,200 and again in 1979 to 5,900, and then receded to 4,800 in 1980. Inflation and rises in indirect costs were also contributing to instability23/. Dr. Fredrickson reported that the 96th Congress had debated levels that represented capacities to fund competing grants in F.Y. 1981 in numbers ranging from 3,800 to 5,000 and pointed out that, at the 3,800 level, an average of only one in four approved competing grant proposals would be fundable. He emphasized that in the F.Y. 1980 budget the Carter Administration agreed to request funds for approximately 5,000 competing grants, at the time enough to fund about one out of three approved applications, and Congress had appropriated funds for nearly that number. Although President Carter twice found it necessary to reduce his 1981 budget, the 5,000 grants survived both reductions, and Congress ultimately included funds for this number in its continuing resolution for F.Y. 1981. Dr. Fredrickson concluded that "The willingness of the Executive and Legislative branches to support the principle of stabilization through these difficult years is a dr/amatic gesture toward continued support of the biological revolutionary . 7