The School of Medicine, Dean Robert J. Alpern, M.D., told alumni at this year’s reunion, is well positioned to weather a changing and challenging medical marketplace and uncertain federal research funding.

“The medical school is doing great. The Yale system is alive and well,” he said in his State of the School address in Harkness Auditorium on May 31. He thanked alumni for their support of the school through philanthropy and service.

Funding from the National Institutes of Health nationally has been flat or in decline for much of the past decade, Alpern said. Although NIH funding doubled between 1999 and 2004, Alpern said, “when you correct for inflation, the NIH budget didn’t actually double. Spending was actually down [in real dollars, from 2004 levels] before sequestration, and it has just gotten worse since then. This affects every medical school in the country, certainly every research-intensive medical school.”

Despite the declines in overall NIH funding, the school is still doing well—this year it ranked fifth in overall funding from the NIH and second in funding per faculty member.

Changes in the financial landscape have led to a reversal of the usual revenue pattern in which grant revenue exceeds clinical revenues. This year, because of the lower federal funding and what Alpern called “a massive expansion of our clinical practice in 2013,” clinical revenues are higher than grant income. “This is a good thing,” Alpern said. “This makes us financially more healthy and more stable.”

Among the market forces affecting the medical school are increasing consolidation as hospitals merge and physicians leave small practices for jobs with hospitals and large practices, increasing costs with flat or declining reimbursement, a shift away from fee for service to bundled compensation and quality-based payments, and a growing need for primary care.

Alpern credited Paul Taheri, M.D., the CEO of the Yale Medical Group, and his leadership team for bringing a new level of sophistication to the practice and advancing clinical care at the School of Medicine.

The school, Alpern said, remains committed to providing financial aid to students. “To graduate from medical school with $123,000 in debt is just too much. A high priority for us is to try to get this down.”

The school continues to attract top students, he said. The average GPA for the Class of 2018, which will enter the school in August, is 3.81, and the mean total score on the MCAT is 36.54, the highest in the school’s history, Alpern said. And, he said, Yale’s graduates continue to match at top residencies.

A report from the Association of American Medical Colleges showed that 16.8 percent of Yale graduates from 1993-2003 have entered primary care, about a fifth from that time period practice in underserved communities. Of those who graduated between 1998 and 2008, about 36 percent have become faculty at medical schools. And 96.8 percent said they were very happy with their medical education. “If there are students who are unhappy with their education at Yale, I haven’t met them,” Alpern said.

Education at the school is about to change with the launch of a new curriculum in 2015. The main thrust, Alpern said, is “to bring science and clinical medicine closer together.” Clinical rotations will start five months earlier than under the current curriculum. The new curriculum will also maintain the flexibility of the Yale system, “so students can learn medicine their own way.”

The school will also experiment with what is called the “flipped classroom.” Students will be able to watch videos of lectures before class and during class ask questions about that lecture. “This is where education is going,” Alpern said. “The PowerPoint lecture in the classroom is over. This will be very interesting to watch.”

In conclusion, the dean said that the School of Medicine is committed to maintaining preeminence in its missions of education, research, and clinical care. “That is who we are. That is what we are. There will always be a focus on preeminence.”