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called philanthropic foundations, charitable trusts, trusts, charitable
corporations, and sometimes funds). See the Foundation Directory (New York:
Foundation Center, 1992), xxi-xxxii.

42. National Guide to Funding in Health, 2nd ed. (New York: Foundation Center,
1989), V, and Ruth Kovacs, ed.. Foundation Grants Index 1993, 21st ed. (New
York: Foundation Center, 1992), xii-xiii.

43. The Howard Hughes Medical Institute is not technically a foundation under
the tax code but instead is a medical research organization. Because its
activities and purpose are so similar to those of foundations, it is considered
with foundations in this chapter.

44. Robert J. Glaser, "The Impact of Philanthropy on Medicine and Health,"
Perspectives in Biology and Medicine 36 (1992): 46-56. This source provides a
useful historical introduction to the activities of several major foundations in
support of health care.

45. A. McGhee Harvey and Susan Abrams, For the Welfare of Mankind: The
Commonwealth Fund and American Medicine (Baltimore: Johns Hopkins
University Press, 1986).

46. John Ettling, The Germ of Laziness: Rockefeller Philanthropy and Public Health in
the New South (Cambridge: Harvard University Press, 1981).

47. Barbara G. Rosenkrantz and Peter Buck, Introduction, in Philanthropic
Foundations and Resources for Health: An Anthology of Sources (New York:
Garland Publishing, 1990): xi-xix.

48. NIH Data Book 1991,2.

49. George F. Cahill, Jr., and Diane R. Hinton, "Howard Hughes Medical Institute
and Its Role in Genomic Activities," Genomics 5 (November 1989): 952-54;
and Robert Mullan Cook-Deegan, "The Human Genome Project: The
Formation of Federal Policies in the United States, 1986-1990," in Kathi E.
Hanna, ed.. Biomedical Politics (Washington, D.C.: National Academy Press,
1991), 99-175.

50. Kenneth W. Rose, The Availability of Foundation Records: A Guide for Researchers
(North Tarrytown, N.Y.: Rockefeller Archives Center, 1990), IV-2-IV-3. See
also Darwin H. Stapleton and Kenneth W. Rose, eds.. Establishing Foundation
Archives: A Reader and Guide to First Steps (Washington, D.C.: Council on
Foundations, 1991).

5 1 . Chuck Hill and Anne Muchoney, eds., A Guide to the Project HOPE Archives
(Millwood, Va.: People-to-People Foundation, 1991).


Several general guides to the U.S. health care system present good overviews of
the functions, activities, and roles of federal, state, and local health agencies.
Among the best are Anthony R. Kovner and contributors. Health Care Delivery
in the United States (New York: Springer Publishing Company, 1990); Florence


A. Wilson and Duncan Neuhauser, Health Services in the United States (Cam-
bridge, Mass.: Ballinger, 1985); and Milton I. Roemer, Ambulatory Health
Services in American: Past, Present, and Future (Rockville, Md.: Aspen Systems
Corporation, 1981 ), which also contains a good overview of patient care
aaivities of disease-specific foundations. An excellent compilation of essays
on the government's role in formulating health policy is Theodore J. Litman
and Leonard S. Robins, Health Politics and Policy (Albany, N.Y.: Delmar Pub-
lisher, 1991).

The best history on the origins of the Public Health Service (and hence federal
involvement with health care) remains that by Robert Straus, Medical Care for
Seamen: The Origin of Public Medical Service in the United States (New Haven: Yale
University Press, 1950). The most recent history is Fitzhugh Mullan, Plagues
and Politics: The Story of the United States Public Health Service (New York: Basic
Books, 1989). Recent historical studies of other federal health agencies in-
clude Victoria Harden, Inventing the NIH: Federal Biomedical Research Policy,
1887-1937 (Baltimore: Johns Hopkins University Press, 1986); Elizabeth
Etheridge, Sentinel for Health: A History of the Centers for Disease Control
(Berkeley and Los Angeles: University of California Press, 1992); and Alice
Sardell, The U.S. Experiment in Social Medicine: The Community Health Center
Program, 1965-1986 (Pittsburgh: University of Pittsburgh Press, 1988).

The classic work on local health units is Haven Emerson, Local Health Units for the
Nation: A Report (New York: Commonwealth Fund, 1945; reprinted by Arno
Press, 1977). In 1973 a team at the University of North Carolina began an
important project to survey the activities and organization of local health
agencies. A good example of their work is C. A. Miller et al., "A Survey of
Local Public Health Departments and Their Directors," American Journal of
Public Health 67 (1977), 931-39. An excellent model history that focuses on
the activities of a local health department is John Duffy, A History of Public
Health in New York City, 1625-1866 (New York: Russell Sage Foundation,

The standard work on the structure and organization of foundations is Frank
Emerson Andrews, Philanthropic Foundations (New York: Russell Sage Foun-
dation, 1956). The value of the archives of philanthropic foundations, includ-
ing health-related foundations, has been argued by David C. Hammack in
"Private Organizations, Public Purposes: Nonprofits and Their Archives,"
Journal of American History 76 (1989): 181-91. Good histories of the health
activities of important foundations include A. McGehee Harvey and Susan L.
Abrams, For the Welfare of Mankind: The Commonwealth Fund and American
Medicine (Baltimore: Johns Hopkins University Press, 1986); E. Richard
Brown, Rockefeller Medicine Men: Medicine and Capitalism in America (Berkeley
and Los Angeles: University of California Press, 1979); and John Ettling, The
Germ of Laziness: Rockefeller Philanthropy and Public Health in the New South
(Cambridge: Harvard University Press, 1981).


Biomedical Research Facilities


Biomedical research facilities are units of the U.S. health care system
devoted primarily to scientific investigations in medicine or other modes
of therapeutic treatment, or to studies of the basic composition and
functions of the human body. This chapter reviews the major types of
biomedical research institutions and their activities. As shown in Table
l-I, biomedical research institutions are inextricably involved with most
functions of the health care system. The signature function of research
may not readily be distinguished from other principal functions. Many
kinds of investigative units, for example, are involved in patient care.
Their programs often contribute a vital part to the education (particularly
postgraduate training) of health care professionals. Indirectly their influ-
ence extends still further: biomedical research findings are an essential
ingredient in health promotion and policy formulation, and they make
possible the manufacture and marketing of products and services worth
billions of dollars annually.

Institutions in the United States devoted to biomedical research num-
ber in the thousands and include programs in the basic sciences, such as
molecular biology and biophysics, as well as in the clinical sciences, such
as cardiology and surgery. Units that conduct programs dedicated to
developing refinements in biomedical technology within larger institu-
tions belong equally to this category. The concept of biomedical research
also includes investigations in allied health fields, such as dental medicine,
nursing, and pharmacology, and in behavioral sciences, such as psychol-
ogy and sociology.^ In this chapter, the term will be used in its broadest



Specialty institutions devoted to biomedical research fields are identi-
fied by a welter of generic terms, some clearly denoting a particular
function or size, others seemingly devoid of meaningful association. The
jargon of the National Institutes of Health (NIH), the largest of the Public
Health Service branches of the Department of Health and Human Ser-
vices, for example, speaks of "BIDs" — bureaus, institutes, and divisions.^
There are also many federal research agencies bearing the name center.
Institutions outside the government are designated by these same terms,
but many others are used as well. The nonprofit sector recognizes numer-
ous research academies, clinics, consortiums, departments, groups, foundations,
laboratories, programs, and units. The commercial sector adds companies and

Unmistakable from even a casual analysis of this segment of the U.S.
health care system is the fact that independent biomedical research units
are far outnumbered by comparable organizations that are subdivisions of
larger bodies. Fewer than one in ten are without some form of parent
body. Throughout the country, there is a proliferation of specialty units
within governmental agencies, hospitals, universities, and commercial
companies. This is not to say that independent biomedical research insti-
tutions are a declining phenomenon. There are today, as there have been
for decades, many new and vital organizations of this description. At
present, however, the trend favors the development of large, conglomer-
ate medical enterprises.^

Another general characteristic of research institutions, and one that is
related to the frequency of their affiliated or subordinate status, is that as a
rule they are neither quite as visible nor as permanent as other kinds of
organizations in the U.S. health care system. Most U.S. hospitals, for
example, take as part of their mission to be known as permanent commu-
nity assets and often assiduously cultivate their public image through
media advertising and other, more subtle public relations campaigns.
Educational institutions also desire visibility to attain objectives such as
the recruitment of students and the maintenance of alumni and commu-
nity support. Health industry firms routinely spend millions of dollars
annually to encourage the public to trust and use their products. By
contrast, a public profile is deemed unnecessary, if not undesirable, for
most specialty research organizations. Such units are established when
intellectual motivation and funding opportunities come together, and this
generally happens with far less fanfare than is heard from institutions that
directly serve the public. When all their projects conclude or funding is
exhausted, most research organizations, both public and private, can
relatively swiftly disburse their property assets and disband.



FIGURE 4-1 Dr. George H. Bishop conduas research on sensory mechanisms of
skin in the Neurophysiology Laboratory, McMillan Hospital-Oscar Johnson Insti-
tute, Washington University, St. Louis, 1946. Source; Washington University School of
Medicine Library, St. Louis


The federal government has long established and operated biomedical
research agencies. Every state of the union also funds agencies that
conduct investigations in health-related fields. Completing the picture are
varieties of investigative units that are both private and nonprofit and also
many that are run for profit. Both federal and profit-making units tend to
be unambiguous concerning control and funding. The investigatory
branches of the Department of Health and Human Services, for example,
operate totally on congressional appropriations. Their work is performed
ostensibly in the public interest, and significant findings are generally
divulged as soon as it is feasible. Commercial biomedical firms usually
conduct research out of corporate revenues; findings from their laborato-
ries are proprietary and disseminated according to marketing strategies.

The factors of control and funding are often more complicated in the
cases of state agencies and of private, nonprofit biomedical research
institutions. A large proportion of institutions in both categories depend


on complicated and multilayered funding systems extending across state
lines. Various federal grant programs enable state, local, and private
nonprofit organizations to form special units for biomedical research.
Private foundations and corporate sponsors also play a central role in
sustaining nonprofit investigative organizations, both within and apart
from governmental control. All of this is carried on in the public interest
or, from a different perspective, in the interest of science and health.'^

Private philanthropy accounts for what most closely approximates a
legal definition of a "typical" biomedical research organization. This
definition is found in a section of the Internal Revenue Code concerning
the eligibility of such units to receive private donations. According to the
code, an organization is a medical research organization [if it is] directly
engaged in the continuous active conduct of medical research in conjunc-
tion with a hospital. "5 Under the strictest possible interpretation, the law
would appear to address only those units that are subordinate sections of
major health care delivery facilities. The phrase "in conjunction with a
hospital," however, is generally taken to include many different levels of
association with clinical institutions, among them purely intellectual and
collegial connections. A broad interpretation permits wholly independent
organizations engaged in health sciences research to receive donations
under the code.^ Many research units, furthermore, are eligible recipients
of charitable contributions and gifts by virtue of being part of educational


The federal government operates several hundred specialized biomedical
research components. These are parts of the agencies already reviewed in
broader perspective in Chapter 3. The greatest number are grouped under
the egis of the Public Health Service of the Department of Health and
Human Services. They include the institutes and centers that compose the
NIH, the divisions of the Substance Abuse and Mental Health Services
Administration, and the Centers for Disease Control. They all are com-
monly referred to as intramural research laboratory units (i.e., operating
within the "walls" of the federal government), to draw a distinction
between them and the extramural research program offices operated by
many of the same institutes and divisions, in which money is sent "be-
yond the walls." Many specialized biomedical research institutes and
divisions are also to be found within the departments of Agriculture,
Defense, Energy, and Veterans Affairs.^

Federal agencies set national standards not only because they are


sources of funding, but also because they serve, at least in principle, as
flagships in their respective investigative fields. At the very least, they
have been centers where scientists across the country gained formative
experiences and made important associations. This leadership function
was particularly significant during the halcyon early years of the NIH
(roughly the late 1940s through the early 1960s). In his autobiography.
For the Love of Enzymes, the biochemist Arthur Kornberg recalls how young
scientists typically exchanged positions at the NIH for appointments at
other institutions, or vice versa, in the course of their careers.^ Competi-
tion between the NIH and the world outside Bethesda for candidates to fill
junior posts and postdoctoral fellowships continues to renew and
strengthen these same connections. Mutual reinforcement, moreover, is
perpetuated through the experiences of members of hundreds of review
panels that convene at the NIH as a part of the annual grant-funding

Specialization renders it impossible to represent any one federal
laboratory unit as typical of all that the government operates. The mam-
moth NIH campus in Bethesda houses the largest concentration of intra-
mural research programs. There, to cite but one example, are located the
laboratories of the Digestive Diseases Branch, Intramural Research Divi-
sion, of the National Institute of Diabetes and Digestive and Kidney
Diseases, one of the thirteen National Institutes of Health. This unit boasts
two sections, devoted respectively to gastroenterology and to liver dis-
eases, where scientists conduct experiments on the physiology and bio-
chemistry of digestive disorders. A prominent example of NIH laboratories
located outside Bethesda are the units administered by the Gerontology
Research Center of the National Institute of Aging, in Baltimore. A wide
range of investigations on the aging process and age-related disorders are
conducted at the center's facilities.

Military medicine embraces numerous fields of applied biomedical
research. The Letterman Army Institute of Research in San Francisco, for
example, is devoted to problems related to battlefield trauma and defenses
against biological and chemical weapons. The Diving Medicine Depart-
ment of the Naval Medical Research Institute in Bethesda specializes in
studies of decompression sickness, the use of anesthesia and other drugs
below the ocean's surface, and the long-term effects of contaminants on
divers. The Department of Veterans Affairs, in addition to maintaining
cooperative research contracts with medical centers throughout the
United States, operates its own Medical Research Service at departmental
headquarters in Washington, D.C., to investigate clinical problems espe-
cially prevalent in Veterans Administration hospitals.



"Affiliated status" in this context covers both integral research units of
hospitals and universities and research institutions that maintain coopera-
tive arrangements with hospitals and universities. They are commonly
located within both state-supported and private, nonprofit medical cen-
ters. Federal extramural funding, private philanthropy, and clinically
generated revenues have contributed to make equivalent units in both
ownership categories remarkably similar.

An example of an integral unit is the Bockus Research Institute in
Philadelphia. Bockus is a part of the Graduate Hospital Research Center,
which in turn is affiliated with the University of Pennsylvania (although
not owned by the university). The institute specializes in research in
cardiovascular physiology. An example of an institution with a more
collateral relationship with a hospital complex is the Brain Research
Center, an independent, nonprofit organization affiliated with the George
Washington University School of Medicine and located at Children's
National Medical Center in Washington, D.C. Research there concentrates
on the role of neuropeptides in the nervous systems of children, and the
center is currently running experiments in the treatment of autistic
and self-injurious behavior. Not all hospital-affiliated research units,
however, conduct laboratory experiments. The Sid W. Richardson Insti-
tute for Preventive Medicine of the Methodist Hospital in Houston, for
example, specializes in epidemiological studies of chronic lung and
heart diseases. Among its objectives are the analysis of health insurance
claims and employee absentee data to evaluate preventive medicine

The overwhelming majority of biomedical research institutions func-
tion within a single facility, but there are numerous exceptions. The
Affiliated Children's Arthritis Centers of New England, for example, is a
research organization comprised of a network of fifteen tertiary pediatric
centers located throughout the region and based at the Floating Hospital
of New England Medical Center in Boston. The organization conducts a
series of programs on childhood rheumatic diseases, including clinical and
health management research, and community education courses and

Private hospitals that house research institutes number in the hun-
dreds. These special branches are located throughout the United States,
though virtually all are found in major metropolitan areas. As noted in the
previous chapter, the economic and social realities of the U.S. health care
system make it difficult to operate large private hospitals outside urban
centers. This is doubly true for costly research units. The investigatory


divisions of the Mayo Clinic in Rochester, Minnesota, are exceptions in
this regard. The Mayo Foundation continues to operate research programs
in private facilities, although with extensive government support. The
General Clinical Research Center at Mayo Foundation is located at St.
Mary's Hospital in Rochester and is funded by the NIH's General Clinical
Research Centers Program, which underwrites investigations in a wide
range of clinical specialties. Other Mayo research facilities are housed at
Rochester Methodist Hospital. More recently, the foundation has estab-
lished group practices in Jacksonville, Florida, and Scottsdale, Arizona. A
special satellite telecommunications system permits staff physicians at
these locations to participate in selected research programs centered in
Rochester. ^°

Academic medical centers have increasingly developed as the loca-
tions of choice for biomedical research. Minimal components for an
academic medical center are a hospital and a degree training program in at
least one branch of the health sciences, but this hardly suffices to describe
the massive conglomerates that have emerged under this bare description
in many large urban areas. ^^ As with hospitals and research units, a
hierarchical affiliation is not a necessity. Many institutions have been able
to devise cooperative arrangements and to derive other mutual benefits
from mere proximity. An outstanding example of this is the clustering of
biomedical research institutions in metropolitan Houston in the vicinity of
several universities and hospitals.

The biomedical research units at Boston University are typical of
special investigatory divisions that have developed under the umbrellas of
academic medical centers throughout the United States: the Aphasia
Research Center, the Arthritis Center, the Center for Psychiatric Rehabili-
tation, the General Clinical Research Center, the Gerontology Center, the
Health Policy Institute, the Hubert H. Humphrey Cancer Research Center,
the Human Bioenergetics Laboratory, the Laboratory of Neurophysiology,
the Marine Program, the Robert Dawson Evans Memorial Department of
Clinical Research, and the Whitaker Cardiovascular Institute. Major uni-
versity medical centers such as Boston University's are, in general, more
intellectually diverse than those connected to hospitals without graduate
degree programs in the health sciences. Many extend beyond biomedicine
proper to allied fields in biology, bioengineering, and the social sciences.
Boston University, for example, maintains a year-round research program
at the facilities of the Marine Biological Laboratory in Woods Hole,
Massachusetts. The fact that Boston University is privately owned has no
bearing on the array of research units that it maintains or the kinds of
investigations in which they engage. Numerous large state universities
support comparable numbers and varieties of investigatory bodies.



A select number of private, nonprofit agencies occupy enormously influ-
ential positions at the centers of the experimental life sciences, each with
numerous links to the world of clinical practice as well. Particularly
illustrative of institutions in this rank are three of the oldest in the United
States — the Carnegie Institute of Washington, the Cold Spring Harbor
Laboratory in Cold Spring Harbor, New York, and the Marine Biological
Laboratory in Woods Hole, Massachusetts.

The Carnegie Institute of Washington is a private organization with
centers in several cities. In terms of biomedical research, the most notable
of these centers is the Department of Embryology, founded in 1 9 14, and
located in Baltimore. The department's general research agenda is to
study the "mechanism of differentiation, growth, and morphogenic pro-
cesses coordinating transformation of an egg into a functional adult." The
institute also operates the Carnegie Laboratories of Embryology, Davis
Division, located at the University of California, Davis, specializing in
investigations in embryonic development of the human brain. The divi-
sion is operated under contract by the university.

The Cold Spring Harbor Laboratory, founded in 1890, is a nonprofit

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