TEACHING AND EDUCATION

As a teaching affiliate of Harvard University, the Institute supports extensive participation by its professional staff in medical education, in clinical training, and in pre- and post-doctoral research training. Institute staff members serve as teaching faculty for graduate and undergraduate courses in the basic biomedical and related sciences at the Harvard Medical School and the Harvard School of Public Health. DFCI professional medical staff members serve as faculty for medical student clinical clerkships, and constitute the pediatric and medical oncology services at BCH and BWH, respectively. Institute faculty participate in elective courses for medical students in medical and pediatric oncology, and research opportunities are available to medical students in the Institute’s laboratories.

Each year the Institute enrolls six to eight new clinical fellows in pediatric oncology and, in collaboration with BWH and MGH, enrolls sixteen to nineteen new clinical fellows in hematology/medical oncology. Additionally, the Institute enrolls annually six internists and two pediatricians as part of the Harvard Hospital and Palliative Medical Fellowship that also includes the BWH, BCH and the MGH; this program also enrolls nurse practitioners and pediatric social workers. Trainees receive intensive, specialized clinical training in the first year and a combination of clinical and laboratory training in the two subsequent years. DFCI recruits many of these fellows to become faculty and staff of the Institute.

Research training is available in every laboratory and division of the Institute. Because the Longwood-based members of the Institute’s professional staff hold faculty appointments at Harvard Medical School or Harvard School of Public Health, many participate as trainers and mentors in institutional pre- and post-doctoral training programs at Harvard–affiliated schools through their departmental faculty appointments, or at neighboring Harvard-affiliated hospitals. DFCI staff are involved in more than 25 such training programs in the Longwood Medical Area.

As of March 2016, the Institute had 207 graduate students in DFCI graduate education programs, most of who were enrolled in degree programs at Harvard. In addition, the Institute had 426 post-doctoral trainees primarily employed by DFCI and an additional 118 who are primarily employed by other institutions but do some work at DFCI. Many of these postdoctoral trainees hold individual National Research Service Awards from the NIH or other individual fellowship awards. The Institute is also the recipient of four institutional training grants from the NIH.

LICENSES, ACCREDITATION & DESIGNATION

The Institute was designated as one of the twelve original Comprehensive Cancer Centers by the National Cancer Institute in 1973, as authorized by the National Cancer Act of 1971. In 1999, DFCI led the establishment of DF/HCC, which was first approved as an NCI-designated Comprehensive Cancer Center in 2000, with DFCI as the lead institution and administrative center. This designation was most recently renewed in 2011, with the DF/HCC application receiving a merit rating of “exceptional.” The Institute is currently working on the 2016 renewal application.

The Institute is licensed as a 30-bed, acute care hospital by the Massachusetts Department of Public Health. The scope of the license includes inpatient care, outpatient clinics and infusion, laboratory medicine, transfusion service, radiology, radiation oncology, nuclear medicine, and PET facilities. DFCI is accredited by The Joint Commission (“TJC”) through January 2019. Laboratory services are also accredited by TJC through July 2016. DFCI is working on the renewal application. The bone marrow transplant program is accredited through the Foundation for the Accreditation of Cellular Therapy until February 2019. In 2014, the Institute’s animal facility was re-accredited by the Association for the Assessment and Accreditation of Laboratory Animal Care, International through 2017. In June 2005, DFCI first earned the prestigious Magnet status from the American Nurses Credentialing Center, the highest institutional honor awarded for nursing excellence. This status was most recently renewed in July 2014, with the next scheduled renewal planned for June 2018. In 1989, the Institute was designated one of the country’s twelve Centers for AIDS Research by the National Institute of Allergy and Infectious Diseases. In 2004, the center became part of an enlarged Harvard Medical School Center for AIDS Research and, in 2008, part of the Harvard University Center for AIDS Research.

A-38 PERSONNEL Nursing

As of April 2016, 311 full time equivalent (“FTE”) employees were employed in the Department of Nursing and Patient Care Services. Of these individuals, 225 FTEs provide direct patient care and consist of registered nurses, nurse practitioners, clinical assistants, licensed practical nurses, social workers, respiratory therapists, pharmacists, acupuncturists, and massage therapists. The remaining 86 FTEs comprise nursing leadership and administrative staff. The Institute’s philosophy of nursing care is based on the Primary Nursing Model, which endeavors to have one nurse coordinate the care for each patient and family. This care is delivered within the Multidisciplinary Practice Setting in which nurses, physicians, pharmacists, social workers and other clinicians work collaboratively to deliver care. Care may involve attending to physical, spiritual, psychosocial and educational needs of patients and family members, with the purpose of enhancing quality of life while the treatment for cancer is administered. The Institute’s nursing program also participates in a pain and palliative care service through which advanced practice nurses are available to consult with physicians, nurses and others to manage complex care.

Personnel Benefits

As of April 2016, the Institute employed a total of approximately 4,178 FTEs or 4,466 employees, including the professional, medical and nursing staffs described above. The Institute provides a comprehensive benefit package that includes a selection of health and dental insurance plans, optional flexible spending accounts, life insurance, short term and long term disability insurance, a voluntary, tax-sheltered annuity program and tuition reimbursement.

In addition, as of October 1, 2015, 2,872 eligible non-professional and professional staff were enrolled in an Institute-wide, defined contribution retirement plan. Prior to 1992, the Institute had provided a non-contributory, defined benefit pension plan to non-professional staff and a defined contribution plan to professional staff and senior administrators. The defined benefit plan continues to cover approximately 127 active employees and 265 vested terminated participants for Institute service prior to the new plan’s initiation. As of September 30, 2015, the actuarially estimated present value of accumulated benefits exceeded the market value of the defined-benefit plan assets by $7.0 million (see footnote 12 to the audited consolidated financial statements included in Appendix B-1).

Unions

Two labor unions represent certain Institute staff members. The Massachusetts Nursing Association represents approximately 369 individuals on the nursing staff and has a contract with the Institute, which expires in December 2017. The Institute’s maintenance staff is represented by the International Union of Operating Engineers, AFL-CIO, Local #877 (the “Local”). The Local represents about 51 individuals, and the current contract expires in October 2018.

INSURANCE

The Institute has a comprehensive professional liability insurance policy (medical malpractice) and a commercial general liability insurance policy with CRICO. CRICO is a captive insurance company based in Vermont. It is a self-insurance program of the Harvard-affiliated medical institutions comprising medical malpractice insurance, claims, and risk management services. Each primary policy provides a combined single limit of $5 million per claim for both professional liability and general liability coverage, which includes liability for bodily injury, property damage, personal injury and advertising injury. The single limit applies to each covered insured, including the entity. There is an annual aggregate limit of $10 million per individual insured for professional liability with no aggregate limit on general liability losses. CRICO purchases various reinsurance and excess policies and provides excess coverage to provide excess coverage to insured institutions. Coverage is shared among all CRICO members with the total general and professional liability excess coverage provided for the institution being $105 million per claim and annual aggregate. The general liability policy includes shared coverage for “other acts of terrorism” in the amount of $5 million per claim for each named insured, $7.5 million for all claims for all events for each named insured with a $15 million annual aggregate for all insured. DFCI presently carries a blanket $1.0 billion insurance policy on its real and personal property, including boilers and machinery. This policy includes coverage for up to 100% of the replacement value of insured properties, and business interruption coverage. The coverage is subject to a $25,000 deductible per occurrence for property damage and a $100,000 deductible per occurrence for flood and earthquake. There is a $5.0 million aggregate annual limit on flood damage. DFCI also carries insurance for

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blanket crime, automobile liability for bodily injury and property damage, cyber liability, environmental liability, pension trust liability, employee benefit liability, association liability, officers and trustees, and workers compensation.

Additionally, the Institute carries various other insurance policies as required by law and/or by contract.

LITIGATION

Management is not aware of any litigation pending or threatened against any member of the Obligated Group that would, in the event of an adverse result, materially adversely affect the ability of the Obligated Group to meet its obligations with respect to the Bonds.

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This letter and information contained herein are submitted to the Agency for inclusion in the Official Statement relating to the sale of the Bonds, as authorized by the Board of Trustees of the Institute and the Board of Trustees of Dana-Farber, Inc.

Respectfully submitted,