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Are cost-plus days gone?
Funding our struggle for reimbursement and autonomy
Most of us who are running a small medical business have seen a steady rise in expenses at the same time that our reimbursements are decreasing, causing us to frequently re-evaluate all the expenditures related to our practices. The days when we could pass our increased costs on to the consumers are long gone, and increased costs mean our net take-home income is decreased.
We also face increasing dues and fees for belonging to various medical organizations. There has been a trend that every 3 to 5 years we receive a notice from our professional organizations stating it is necessary to increase our dues. The statement often explains that the increase is related to inflation and cost-of-living expenses for professional staff and ongoing programs. They simply pass their increased costs on to the membership.
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Consolidation and merger
We can learn from what the business world has done when corporations are working in similar areas: the benefit from the economies of merging. We could see rewards from reducing and reallocating our resources through consolidation and merging some of our professional medical organizations. Potential savings could be realized by decreasing and/or eliminating many current duplications in administration and professional staff, continuing medical education departments, lobbying efforts, and pruning of nonessential activities.
Drawing from my personal experience, if I had remained active in all of the medical societies I have joined over the years, I would currently spend in excess of $15,000 a year for membership dues. That is a relatively small cost in comparison to the expense of travel and accommodations involved if I attended and was active in all the annual and CME meetings offered. These organizations over the years have included medical and surgical societies at the local, county, state and national levels, as well as international orthopedic organizations, professional travel clubs and all their associated political action committees. All these organizations have dues and membership fees.
Duplication and overlap
I have belonged and contributed to more than 10 organizations housed in the American Academy of Orthopaedic Surgeons’ (AAOS) building in Rosemont, Ill. They have included: the Arthroscopy Association of North America (AANA), AAOS, American Orthopaedic Society for Sports Medicine (AOSSM), Orthopaedic Research Society (ORS), American Association of Hip and Knee Surgeons (AAHKS), Association of Bone and Joint Surgeons (ABJS), American Orthopaedic Association (AOA), Orthopaedic Research and Education Foundation (OREF), and some international organizations. This sharing of a common location could be the easiest place to start strategic mergers and consolidations to reduce our dues.
I made a proposal more than 10 years ago that in the Rosemont headquarters building (the house of orthopedics), we could have some mergers to reduce costs related to some of the duplication of executives and professional staffs, rents, employees, publications, CME, etc.
I now propose that we consider reducing unnecessary fragmentation and duplication of effort within the family of orthopedics. We can be much more cost effective in all our overall efforts of supporting education, research and health policy programs. It is my opinion that we need more funds available to reallocate to those issues impacting our decreasing reimbursement and autonomy. Third parties (including Medicare) are threatening the existence of some private practices and it appears it will be a greater challenge in the future.
In simplistic terms, I suggested in the past that all the orthopedic specialty societies should run those committee activities within AAOS. For example, the AOSSM would run the sports medicine activities of the society inside the academy. Those who wanted to be part of this subspecialty section within AAOS could belong with an additional increase in dues. Doing this with other societies could reduce our overall dues significantly. However, this proposal to consider folding all specialty societies back under the AAOS tent as committees, as one of my friends has told me, “is definitely a bridge too far.”
There have been examples of mergers in the past that have combined missions and economies such as the International Society of the Knee and the International Arthroscopy Association that merged to form ISAKOS in 1995. Another recent merger example was between the AOA and the Academic Orthopaedic Society. Some individuals have suggested that AANA and AOSSM are possible candidates for merger.
Territorial behavior
This proposal raised many objections the first time and it will do the same this time. A question I heard a lot as a reason not to do this type of merger was, “What about the generalists?” As far as I am concerned, generalists and subspecialists are in this together. I would see the generalists joining and belonging to any of the designated sections and/or attending the annual and CME meetings. We should not worry about what type of orthopedic practice we have; we are in this together. We are too small for fragmentation in our profession.
Fragmentation and duplication are costing our professional effort unnecessary expense and make us less effective in the utilization of our overall resources. We know that we need additional funds to make a difference and to have our voices heard in the debate to influence health policy in this country. It takes considerable funding to be at the table and discuss health care issues that impact us. Some of the potential cost savings of consolidating these organizations could be redirected to this effort.
I am not optimistic this will happen. There are many problems inherent in human behavior that may prevent any type of umbrella merger and/or consolidation. Even with the AAOS as an umbrella organization for the house of orthopedics, a major problem area involves territorial issues. Who will be in charge? Who will determine and control the budget and utilization of funds? Would it mean disbanding some boards of directors?
It would also be difficult to delete duplicative professional staff. These types of changes are fraught with untold complexities. Consolidating and pruning organizations is not easy but the economic environment demands that we look at it. It does not take much insight to see how our dues to some organizations will approach and/or exceed $1,000 annually in the future. This is inevitable with inflation, cost of living and program creep if we continue with business as usual in our professional organizations. This type of thinking and proposal is unlikely to be embraced until finances become more of an issue in the future.
When to drop out
What many national organizations and organized medicine have not fully dealt with is that we as members are going to express our opinions individually and at different times. Individually we will each decide when enough is enough and cut back our expenditures by selectively dropping certain memberships. Just look at the small percentage of orthopedic surgeons who currently belong to the AMA.
I use the following criteria for dropping memberships:
If I do not attend an annual meeting in a 3-year period; and
I am not active in the organization or if its programs are not relative to my patients’ needs and my practice survival.
I feel we need to refocus and prioritize the utilization of our resources and programs within the house of orthopedics. I share the opinion of another friend who has said, “A redirection of some of our finances to a political effort trying to impact health policy could, in the long run, be more fruitful than belonging to multiple, dues-paying organizations.”
Gone are the cost-plus days for professional medical organizations. Their members are in a price-controlled environment with decreased reimbursements, they are losing autonomy, and they cannot pass their increasing costs on to anyone. Let us consider tightening up the utilization of our available professional resources and priorities like we all have had to do in our practices. The bottom line is obvious — we can not keep paying higher and higher dues.
Douglas W. Jackson, MD
Chief Medical Editor