Universities feel ripple effects of DOGE cuts to health

Driving the news: An economic analysis by software company Implan on Tuesday estimates proposed cuts could lead to a loss of $6.1 billion in the nation's gross domestic product, a $4.6 billion reduction in labor income and result in the loss of more than 46,000 jobs nationwide.

• This includes the direct effects of the research itself, with 17,000 expected job cuts, but also indirect effects through a slowing of business-to-business spending in the R&D supply chain that could support 14,000 more jobs.

What they're saying: "It's not just researchers that are affected. It's not just universities that are affected," said Bjorn Markeson, academic divisional director and economist at Implan.

• "There's going to be impacts on real estate ... there's going to be impacts on legal services. There's going to be impacts on services to buildings, office, administration."

Between the lines: While federal courts have temporarily frozen plans to slash the rate NIH pays for "indirect costs" and the administration's temporary "pause" on federally funded grants and loans, universities are already feeling real pain.

• Institutions have also been reporting delays of NIH grant reviews, in what some legal scholars call a "backdoor" approach to freezing funding, Nature reported.

NIH cuts are most immediately hitting graduate education programs.

• The University of Pennsylvania said it would reduce graduate admissions, pointing in part to the NIH cuts, reported The Daily Pennsylvanian.
• The University of Pittsburgh, Vanderbilt University and University of Southern California are among institutions that temporarily paused Ph.D. program admissions but have since resumed the process, per Inside Higher Ed.
• Meanwhile, Columbia's medical school and MIT, among others, have frozen hiring.

Zoom in: Maryland is among the states that could be hit hardest, with potential annual losses exceeding $2 billion due to Johns Hopkins University and its robust research corridor, Terry Clower, director of the Center for Regional Analysis at George Mason University, told Axios.

• By his calculations, there could be 2,000 to 3,000 jobs eliminated in the state as the result of the new NIH policy on administrative and overhead costs.
• "Losing 3,000 jobs across the state would not devastate the economy, but it's an add-on effect to everything else that's going on now," Clower said.
• "Taking into account job losses elsewhere in the federal government ... it's a hard hit to the local economy," he said, noting the Maryland suburbs of D.C. have not seen job growth rebound to their pre-pandemic levels.

The cuts can have outsized impacts within states that receive much less, pointed out officials at Dartmouth College.

• Dartmouth has about 1,300 employees funded in part by its roughly $97 million in federal NIH grants. Dartmouth Health has another 400 employees whose jobs are funded at least in part by its $18 million in NIH grants.
• "In New Hampshire, that's a lot of people," said Steven Bernstein, chief research officer of Dartmouth Hitchcock Medical Center.
• Officials said they are not discussing layoffs or other changes. But "medium term and longer term, if the research portfolio shrinks, those job opportunities are going to decline," said Dean Madden, vice provost for research at Dartmouth College.

What we're watching: U.S. District Judge Angel Kelley is still considering whether the cut to the funding of indirect costs is unlawful.

The bottom line: The future of research talent and scientific advancements could be at stake with these looming cuts.

• "It will impact our ability to to train the next generation of scientists, because there will be less funding available to help support students while they're in their studies," Clower said. "There will be knock-on effects in the economy in future years."
• "What we can't measure is what those losses would mean to discovery of new medications, new drugs, new medical procedures," he said.