Even in the midst of Washington's current budgetary uncertainty, Congress seems likely to stay on course with significant increases in appropriations for biomedical research. Last year the budget for the National Institutes of Health grew by $2 billion, nearly 15 percent. A comparable increase this year is not improbable.

In light of such rosy projections, why is the biomedical research community still worried about the future? Simply put, the national system of medical research is in trouble at the very moment when large increases in research funding are materializing.

Managed care has eroded the ability of some institutions to conduct research. A recent study of NIH research funding found that between 1986 and 1990 -- before the impact of managed care -- medical schools everywhere had similar rates of growth in NIH grants. After 1990, growth slowed markedly in medical schools where managed care had penetrated. With more time spent on treating larger volumes of patients for lower fees, there is less time for teaching and research.

Prospective Medicare cuts brought about by the Balanced Budget Amendment of 1997 threaten to destroy our finest academic hospitals. The American Association of Medical Schools estimates that the nation's teaching hospitals could suffer cumulative losses of nearly $15 billion by 2002, about $45 million on average for a teaching hospital. Forty percent of teaching hospitals could be losing money by 2002. The University of Pennsylvania Health System lost $90 million last year. The Partners Health Care System in Boston could lose $340 million from Medicare cuts over the next few years. And these are systems with high patient volumes that have already instituted efficiencies in operations through mergers and cutbacks.

Medical schools, the lifeblood of medical education, research and clinical advances, are extremely vulnerable to pressures on hospital revenues and physician income. Academic medical departments are subsidized both directly and indirectly though clinical revenues. A study in 1994 of 60 medical schools found that physician faculty income and teaching contributed $3 billion annually for such things as medical education, graduate medical training, faculty research and scholarly activities, research infrastructure, and recruiting new faculty and researchers. Now hospitals are forced to reduce or eliminate academic programs conducted with medical schools. Mount Sinai Medical Center-University Circle in Cleveland, for instance, is discontinuing academic programs to reduce costs. Residency contracts and teaching affiliations with Case Western Reserve University School of Medicine are being canceled.

Biomedical research laboratories in much of the country are old, outmoded and inadequate to handle the prospective NIH increases. In the biennial survey of research space conducted by the National Science Foundation, 67 percent of medical schools surveyed reported inadequate space for medical sciences. That was 30 percent less than needed to meet their current research obligations (i.e., before the NIH increases). The cost of deferred maintenance runs into the billions of dollars. Yet the federal government last year appropriated only $30 million for medical research facilities for the entire nation. By comparison, a single 200,000-square-foot biomedical research facility costs around $80 million these days.

Support for training of new doctors could also fall victim to reductions in Medicare (and in some instances Medicaid). The training of new medical leaders is where the interface between clinical care and research occurs. New doctors trained in an academic setting, in the midst of research and teaching exploring every facet of human illness and health, are the leaders who will target the diseases to be cured, design the research studies to understand them, work with scientists to conduct the research and ultimately develop the treatments.

Health appears to be replacing defense as the nation's top research priority. Every day the newspapers are full of reports about scientific advances against debilitating and life-threatening diseases. But the allocation of resources must reflect the needs of all parts of the system. Allowing our teaching hospitals to collapse, ignoring the financial viability of our medical schools, neglecting the condition of our research laboratories, and halting the training of the next generation of medical leaders is not how to advance medicine into the 21st century.

The writer is dean of the faculty of medicine at Columbia University's College of Physicians and Surgeons.