 October 2002 • Volume 8 • Number 10 |
Helpful HIPAA resources availableIf you still need more information about any portion of the Health Insurance Portability and Accountability Act, check out these resources.
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Medicare officials are holding their breath as the nation's physicians continue to drag their collective feet about filing for extensions for one portion of the Health Insurance Portability and Accountability Act. The simple act of completing and submitting the two-page form by Oct. 15 extends the compliance deadline for the transactions and code sets standards portion of HIPAA one full year.
"We're estimating that less than 10 percent of providers who may need the extension have applied for it," says Karen Trudel, director of HIPAA outreach at the Centers for Medicare & Medicaid Services.
Trudel says CMS officials believe some physicians are procrastinating, just as taxpayers avoid the April 15 tax deadline. But other factors are at play, says Trudel. A number of physicians have expressed concern that they might be penalized if the estimates they give CMS now were to change in the future. "Providers think the information has to be absolutely perfect, and so they are waiting," says Trudel. "In reality, the information they provide on this form was always intended to be a snapshot in time."
Even more disturbing to CMS is a growing realization that some physicians are completely out of the HIPAA loop. "Our focus groups have shown that the small rural providers' awareness about HIPAA in general is pretty low," says Trudel.
To deal with the information drought, says Trudel, CMS has embarked on a nationwide educational blitz, with three target messages:
David C. Kibbe, M.D., director of health information technology in the AAFP Socioeconomics Division, encourages physicians to act before the deadline passes. "Filing for the extension with CMS is the first step on the pathway to surviving HIPAA transactions standards," says Kibbe. "It's easy, it costs nothing and there are no wrong answers." In the long run, completing this form could save a physician's practice thousands of dollars in lost Medicare reimbursement, says Kibbe, because if physicians aren't HIPAA compliant, they won't be able to send electronic claims to Medicare, and "Medicare won't be accepting paper claims after Oct. 16, 2003 ... period!"
If you have any concerns that on Oct. 16, 2002 -- the date the standards take effect -- your practice will not be fully compliant, go to http://www.cms.hhs.gov/hipaa/hipaa2/ascaform.asp today and follow the instructions to submit the Electronic Health Care Transactions and Code Sets Standards "Model Compliance Plan" online. When you hit the "submit" button and a confirmation message appears on the screen, breathe easy. Your extension is a done deal.
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Title VII is under threat. The specialty's federal funding for family practice training comes from Title VII of the Public Health Service Act, and the administration and Congress are hacking away at the funds. Your help is needed to try to stave off severe budget cuts.
For fiscal year 2002, Title VII received $295 million. The Senate Appropriations Committee voted this summer for only $160 million for Title VII in FY 2003. And the House Appropriations Committee was expected to make a similar or lower recommendation last month.
The specialty's leaders fear Congress may even take the route recommended by the Bush administration (and prior administrations): zero funds for Section 747 of Title VII -- the section supporting family practice and other primary care training programs. For FY 2002, $93 million was reserved for Section 747 programs, with about half those funds supporting family practice training.
What would $0 mean?
"We'll be severely affected if our Title VII funds disappear," said Carlos Jaen, M.D., chair of the family and community medicine department at the University of Texas Health Science Center at San Antonio.
The department has all four types of Title VII grants -- for predoctoral training, residency training, faculty development and the academic unit. The support amounts to $700,000 per year or 12 percent of the department's budget, said Jaen.
"The predoctoral resources are allowing us to develop a family practice clerkship in collaboration with pediatrics and internal medicine in a regional academic health center in the lower Rio Grande Valley, one of the most underserved areas in the country," said Jaen. "Our students there deal with severe medical need and border health issues. Many students work in community health centers that don't discriminate on the basis of nationality -- the students are getting excellent training there."
The family practice department at the University of Vermont, Burlington, relies heavily on Title VII. "Our predoctoral and residency grants provide us with a tremendous ability to 'buy' faculty out of practice," said John Fogarty, M.D., department chair. "This year, we have a little over $200,000 in Title VII funds, about 20 percent of our department's budget, which is separate from our clinical budget."
Fogarty described the remote learning model his department set up a few years ago through Title VII funds, a model that's now part of the medical school's revised curriculum. The federal funding helped pay for laptops for students who took family medicine clerkships at remote sites in Vermont and Maine. "The students did problem-based case studies by laptop and could contact the author of the studies on the Web. The students also taught computer skills to some of their preceptors, improving their access to e-mail and the Web -- it's been a wonderful interchange," said Fogarty.
Richard Brunader, M.D., directs the family practice network at the University of California, Davis. The network is composed of seven community-based family practice residencies affiliated with the university. In one Title VII-supported project, the network is testing how well the residents are learning about asthma. "Our programs are doing different types of teaching interventions on asthma," said Brunader. One program is simply giving its residents personal digital assistants so they can obtain clinical information at the point of patient contact. Another has set up an asthma clinic the residents can work in. Still another combines didactic teaching with a day of treating patients with asthma.
"I think the study will show that when you lecture and reinforce it in clinic, at the end of the day, the residents really have it down," said Brunader.
He added, "I believe half of the family practice residencies in the country get some Title VII funds. If Title VII support were eliminated, I would not be surprised to see program closures."
Why so little support?
There are reasons for the drought of support for Title VII.
Some former Title VII champions on congressional appropriations committees have moved on to other committees. Even though the specialty has found new supporters on both sides of the aisle, they don't have the seniority of the earlier proponents, said AAFP EVP Douglas Henley, M.D.
As in the past, the Office of Management and Budget claims there is no proof Title VII has been effective in improving health care for the nation. "We have data from the Robert Graham Center in Washington, showing Title VII has increased the supply of primary care physicians, especially family physicians, in shortage areas," said Henley. "It's frustrating not to have OMB's backing, now that we've got research on Title VII's impact."
He added, "It appears HHS and its Health Resources and Services Administration -- which administers Title VII grants -- are not backing Title VII."
What's AAFP doing?
What can you do?This month, the House and Senate are expected to vote on their committees' recommendations. So this month is prime time to ask lawmakers to protect the Title VII funding for the specialty. Here's how to seek support for Title VII:
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To help bolster HRSA support for family practice training, Henley and other senior staff members scheduled a meeting with the head of HRSA for late last month. "The administration clearly intends to beef up Title VIII, for nursing education, but that doesn't mean it should let Title VII slip," said Henley.
The Academy also is lobbying Congress, trying to defend the funds that make possible the training described above.
AAFP leaders and staff have stormed Capitol Hill to argue Title VII's case. Family physicians who serve as key contacts with legislators have asked their lawmakers to defend the funds. About 200 family physicians have used AAFP's Speak Out: Legislative Action Center to send their lawmakers e-mails seeking support for Title VII.
And AAFP chapters in the states of lawmakers on the Appropriations Committees have issued statewide alerts on Title VII to chapter members. "These alerts, asking members to contact their lawmakers, have been highly successful," said Kevin Burke, director of the Government Relations Division. "But the country's facing hard times economically, and we fear the specialty's Title VII funds may get the budget axe."
The Academy took out an ad (depicted above) in the Sept. 9 and Sept. 12 Roll Call, a newspaper distributed to all congressional offices and widely read in Washington. The ad noted counties that are already short on primary care physicians -- counties that just happen to be in Appropriations Committee members' jurisdictions.
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It's a delicate balance: Producing enough influenza vaccine to meet demand. Even more critical is having the vaccine in physicians' hands when the demand is there -- in October.
Fortunately for FPs, that is not a problem this year. Vaccine manufacturers report they began shipping as scheduled in September, and the CDC is forecasting that more doses than ever -- 92 million to 97 million -- will be produced. But other issues, such as prioritization, cost and reimbursement, are still a concern.
Extending target groups
This year the CDC moved to "encourage" that children 6 to 23 months old be vaccinated when feasible because of statistics showing increased risk for influenza-related hospitalization in this group. The action fell short of a formal recommendation, however. The AAFP has also moved to encourage that this population be vaccinated, as well as household contacts and caretakers for infants up to 23 months when feasible.
The CDC's categorization of "high risk" was first extended in 2000 to persons 50 and older. But health care professionals then were hard-pressed to meet the new demand in a year marked by critical shortages and delays for the vaccine. Officials this flu season will likely study the impact of widening the risk category to include youngsters.
As in years past, the CDC and AAFP want vaccination efforts in October to focus on priority groups. That said, "providers should not turn away other individuals seeking influenza vaccination," says the CDC Web site at http://www.cdc.gov/nip/flu/Bulletins_2002-03/bulletin_3.htm.
Many physicians have expressed anger at seeing chain stores hold mass immunization drives in October -- especially when physicians' offices hadn't yet received their vaccine shipments.
The AAFP has taken notice, says Herbert Young, M.D., director of the Scientific Activities Division. "The Academy has worked with manufacturers, the CDC, AMA and others to assure that family physicians can obtain sufficient influenza vaccine."
Healthy working adults
A cost-benefit analysis published in the Aug. 20 Annals of Internal Medicine indicates flu vaccine is beneficial to healthy working adults, yet some health officials say the vaccine is underutilized.
At least one vaccine distributor would like to see more healthy adults getting the vaccine.
"We were happy to see that (study published in Annals)," says John Trizzino, vice president of business development for the medical group of distributor Henry Schein. "We really need to promote people coming out to get their vaccine this year instead of concerning them about shortages."
According to the Annals study, an average worker with the flu misses 2.8 working days, reflecting lost wages of $397.88.
So why not recommend universal vaccination? The CDC is reluctant to extend the recommendation to healthy persons, says CDC flu expert Carolyn Bridges, M.D. Consider the math: There are 280 million Americans -- about three persons for every anticipated dose of flu vaccine, she notes.
The CDC is more concerned with the mortality rate in high-risk groups. About 20,000 deaths each year are attributed to flu. Look at this statistic in light of reports of 10 million unused doses of vaccine at the end of last flu season, and it's easy to appreciate the disconnect between policy and practice.
Supply side
Two flu vaccine manufacturers -- Aventis Pasteur and Wyeth Vaccines -- are now accepting new orders on their waiting lists, having pre-booked all vaccine for the 2002 03 flu season. At press time, Wyeth was projecting a price increase competitive with other manufacturers. Aventis was charging $6.50 per dose based on purchase of a 10-dose vial -- its highest price; incentives are available for repeat customers and large orders. Distributor Henry Schein has the Evans Vaccines brand of influenza vaccine available but, as of press time, had not published its list prices.
Reimbursement still low
The news isn't good when it comes to reimbursement for vaccinating patients. The Medicare reimbursement, effective Oct. 1, is $8.02 for the flu vaccine and $3.98 for the administration fee, for a total of $12 per injection -- only a 2.48 percent increase over 2001, says Kent Moore, AAFP manager of health care finance and delivery systems. In 2001, Medicare reimbursed $4.59 for administration plus $7.12 for the vaccine, for a total of $11.71.
"We are still fighting to get the reimbursement needed by our members for this important clinical preventive service," says Young.
To read more about the vaccine supply, including ordering information, go to http://www.cdc.gov/nip/flu/Bulletins_2002-03/bulletin_3.htm. To read AAFP's recommendations on administering flu vaccine and an explanation of high-risk groups, go to http://www.aafp.org/x10638.xml.
In fall 1997, the AAFP Congress of Delegates committed $7.72 million to fostering family practice research and researchers during the next five years.
"Family practice will reap the dividends from this investment for years to come," says Stephen Spann, M.D., of Houston, chair of the Task Force for the Plan to Enhance Family Practice Research. The task force sunset in May, ceding follow-up responsibilities to the Commission on Clinical Policies and Research.
"The ultimate dividends will be in discovering new knowledge that will improve the care of our patients," says Spann.
Advanced Research Training grants
The best investment of the AAFP research initiative, says Spann, has been the Advanced Research Training grants. "Twenty-eight ART fellows have each been given about $100,000 to help them develop the research skills to become competitive in seeking extramural funding. They'll be able to dedicate a significant amount of time throughout their careers to research," says Spann.
The ART grants were awarded based on the skills participants would gain, the formal training they planned and the mentor relationships they would establish.
By this spring, the initial ART fellows had developed 119 research publications (journal articles, book chapters and books); had given 62 research presentations; and had received 31 grants amounting to $17,236,192.
Some topics the fellows have studied: pain management during labor; mental health problems in a poor, minority, underserved, semirural population; problems of adult survivors of childhood cancer; and alternative medicine.
University-based research centers
The Academy gave three family practice research centers up to $900,000. The objectives included training new family medicine researchers and increasing the centers' capacity to undertake research that would assist family practices and improve patient care. The three centers, chosen from 62 applicants, are:
Some results attributable to the infusion of AAFP funds, as of this spring: 588 research publications, 211 research presentations and 99 grants totaling $47,906,618.
Other projects
The Academy's multifaceted research initiative included the following.
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The Robert Graham Center, a health policy research entity separate from AAFP's research initiative, was established in Washington in 1999. At that time, the AAFP Board of Directors determined the center would have the editorial independence it needs to be considered a viable, credible source of research.
The center aims to bring a primary care and family practice perspective to health policy deliberations at a federal and state level.
How does the center pull that off?
Its staff members plan forums; make presentations; and develop manuscripts, one-page analyses, posters and Web-based reports. About the manuscripts: Publication in peer-reviewed journals takes time. This year, the center's work has appeared in a steady stream of publications, including Academic Medicine and the Journal of the American Medical Association.
Three studies on health care workforce issues were published late this spring. Their first or second authors were interns -- family medicine residents or new family physicians conducting research at the center with guidance from staff. Another workforce paper -- on the interface between physicians and nurse practitioners -- was published this fall.
Two studies published this summer traced the specialty's growth since its founding in 1969 and described hurdles now confronting family practice.
Two other recent studies from the center, as noted in the September FP Report, used physicians' reports about medical errors in their practices. One patient safety study was done in partnership with the researchers and clinicians in the AAFP National Network for Family Practice and Primary Care Research. The second study used data from AAFP's network; from a new network based at Virginia Commonwealth University, Richmond; and from FPs and GPs in five other countries.
For abstracts of Graham Center articles and citations, go to http://www.graham-center.org/library.xml and scroll down to "Articles." Then in a month or two, try the site again. More Graham Center studies are due to be published this fall and winter.
This fall, you can truly "have it your way" -- when it comes to news from the AAFP Annual Assembly, that is!
Starting Oct. 17, visit http://www.aafp.org/assembly.xml and click on "FP Report, Assembly Editions" to get the latest news right after it happens at the Assembly Oct. 14 20 in San Diego. Coverage from the FP Report, Assembly Editions will be posted online the same day the papers are distributed in San Diego.
Then in November, you'll get all the Assembly news, courtesy of the 16-page FP Report, Post-Assembly Edition. The issue should arrive in your mailbox mid-month.
Both news vehicles will give you information you can use from the AAFP Congress of Delegates and the Scientific Assembly.
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How are you coping in today's trying economic climate? This recent e-mail query to several AAFP members sparked some serious venting that included these comments:
Sound familiar? Perhaps you or your colleagues have had the same troubling thoughts. Read on to see how some FPs have tweaked their practices to keep their books in the black and their spirits high.
Encourage cash at time of service
Michael Jaczko, D.O., of Carlton, Ore., opened a solo practice in this rural community in 1998. "My first year into practice, I was getting crushed by insurance plans," he said. Then three years ago, Jaczko embraced a plan called SimpleCare. Patients who pay cash at the time of service save about half, said Jaczko. An estimated 20 percent of Jaczko's 2,500 patients pay a yearly fee of $25 per person or $35 per family (to SimpleCare) to become a part of an association of patients and providers. (Go to http://www.simplecare.com to read more about SimpleCare.)
By combining SimpleCare with a catastrophic health insurance policy that has a high deductible, patients are finding health care more affordable, said Jaczko. "Many of my patients with insurance opt for SimpleCare for office visits, procedures and tests." Jaczko also charges for office visits in 15-minute increments, so patients can have as much of his time as they want.
"The community has embraced it -- I have patients opting for this payment plan every day," Jaczko said. He has better cash flow and fewer insurance hassles, including less need to find a code to justify every service he provides. "Under the SimpleCare plan, I don't use any codes -- I just write down 'depression' or whatever the patient comes in with," he said. Jaczko is so impressed with this model of care that he wants to push it on a state and national scale.
Add "medispa"
Eric Dohner, M.D., of Walton, N.Y., supplements his solo practice with a cash-only cosmetic practice and "medispa." His 1,900-square-foot satellite location has been open 15 months, said Dohner, and "revenues have exceeded expenses from the second month."
Dohner offers treatments including massage therapy, laser therapy, microdermabrasion, sclerotherapy and spa treatments.
He spends every Tuesday afternoon and every other Friday afternoon at his secondary practice. "This decision was half economic and half professional satisfaction," said Dohner. "The patients love the practice, and we are growing every month; I've had a lot of support and referrals from the medical community."
Revisit house calls
Thinking about adding house calls?Try these tips from George Taler, M.D., (see story above) for making house calls profitable.
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Another way to win community support and help reduce office overhead costs is to add house calls to your practice menu.
Constance Row, executive director of the American Academy of Home Care Physicians, said her organization has 718 members in 40 states -- and she predicts the numbers will increase.
"I can say the number of inquiries has certainly risen," said Row, who used to field about one call a month and now gets several each week. "Physicians see it as a way of coping with overhead and meeting a public need." Row often hears from physicians about the frustrations of managed care. "Doctors see this as the kind of doctor they wanted to be in the beginning," said Row.
But can adding house calls to a practice also make it profitable? Absolutely, said FP George Taler, M.D., of Washington, D.C., whose three-physician practice currently serves about 270 homebound patients. "But you have to provide an organized structure to make it efficient and financially viable." (See information box.)
When you see complex patients in a venue with less overhead, you can spend more time with the patient and reduce disruption and reimbursement losses in the office, said Taler.
"Our practice is in the black now," he said, "but we were supported by our hospital for the first two and a half years before we became self-sufficient."
The key to making the enterprise profitable is learning to maximize income through sources of revenue that are open only to homebound patients. For instance, said Taler, about one-third of these patients receive skilled nursing services through a home health agency; there are billing codes that, before geographic adjustments, pay $60 to $70 for certifying and recertifying these referrals.
Many of those same patients need care plan oversight, said Taler. Each calendar month, document at least 30 minutes of time spent organizing the patient's care with other health professionals, and that time is reimbursable for up to $130 a month, depending on your Medicare locale, he said.
Update your procedural skills as well, said Taler. "Keep in mind that Medicare is all about procedures." He gives injectables for cancer patients and provides wound care, debridements, and gastrostomy and tracheostomy tube changes for his homebound patients. "Your patients are grateful, these are not difficult techniques and they reimburse well," said Taler.
Homebound patients also have a very high rate of hospitalization, so if you want to maintain hospital privileges, "this is a source of potential patients," Taler said.
Most gratifying to Taler is the knowledge that there's great need for physicians providing home care. "We can have a tremendous impact on the ability of people to live a good life by going to their homes," he said.
Editor's note: To learn about another practice concept that includes house calls and reduces practice overhead -- the "circle of care" concept -- see the September FP Report at http://www.aafp.org/fpr/20020900/5.html and the September/October Family Practice Management at http://www.aafp.org/fpm/20020900/29ajob.html.
Want to change the health care system from the inside out? Some physicians are discovering that the best way to communicate with the folks in charge of setting policy is to learn the language they speak.
Roland Goertz, M.D., of Waco, Texas, is 18 years post-residency, has served in academic and clinical-management roles for 15 years, and will soon gain his master of business administration degree at Baylor University.
Why did he take the plunge? Goertz said he wanted the credibility an M.B.A. would bring. He said prior to his master's courses, he wasn't treated as an equal in business meetings. When called upon to speak during contract negotiations, Goertz was expected to cover physician services only -- not business issues -- and along the way, "this grated on me a bit," he said.
"We need physicians with business backgrounds if we're going to work out the health care issues that we face now," said Goertz, who serves on the AAFP's Commission on Legislation and Governmental Affairs.
Associates tell Goertz that his analytical skills have improved -- that now he segments issues into "how does this benefit the patient, and how can we make it work?" In board meetings, said Goertz, "I use business lingo, and I can read a financial statement as well as anyone."
Ditto for Fredric Leary, M.D., of Oak Park, Ill., who earned his M.B.A. in the spring of 2001. As a full-time practicing physician who also does most of the business side of his practice, Leary said now he talks to business colleagues in terms they understand.
Face it, said Leary: Most of today's hospitals are run by business people, not physicians. "If we (physicians) want to take back control of health care, we have to learn to play by their rules in order to level out the playing field," he said.
Leary recalled a conversation years ago when he was on his way to medical school. His father, also an FP, counseled him to squeeze some business courses into his curriculum. "I said, 'yeah, yeah, right, Dad -- I'm going to medical school to take business courses.'" But 20 years later, Leary said, when he was returning to college to collect his M.B.A., he remembers thinking, "Boy, was Dad smart!"
Terrorism CME session goes liveTo check out the latest addition to the Academy's bioterrorism Web site, go to http://www.aafp.org/btresponse.xml and click on "bioterrorism audio CME." This combined audiotape/text presentation covers numerous issues related to the FP's role in recognizing and responding appropriately to bioterrorism. Members may earn up to .75 hour of Prescribed CME credit at no cost by completing this activity. |
Three out of four family physicians surveyed last fall reported they were not prepared to respond to a bioterrorist attack. Although 95 percent said they considered bioterrorism to be a real threat in the United States, only 27 percent thought the U.S. health care system could respond effectively.
Findings from the study, conducted by the AAFP National Network for Family Practice and Primary Care Research and the Agency for Healthcare Research and Quality Center for Primary Care Research, appeared in the September Journal of Family Practice.
"The results of the study are a call to action," said John Hickner, M.D., director of AAFP's national research network. "It is important to remember the timing of the survey. It was sent to family physicians after Sept. 11 and during the anthrax mailings, when there was a heightened awareness of bioterrorism. Had the survey been sent six months earlier, we may have received completely different results."
The survey was first sent to 976 FPs last October, just before the initial case of inhalation anthrax was reported in Florida. After two follow-up mailings, a total of 614 FPs (63 percent) responded.
Twenty-six percent of respondents said they would know what to do in case of a bioterrorist attack, compared with 65 percent who said they would know what to do in the event of a natural disaster and 66 percent who reported knowing what to do during an infectious disease outbreak.
Only 24 percent of FPs surveyed thought they could recognize signs and symptoms of bioterrorism-related illness in their patients. And while 93 percent of survey respondents said they report notifiable infectious disease cases to the health department, only 57 percent said they would know whom to call to report a suspected bioterrorist attack.
| John Hickner, M.D.
"The results of the study are a call to action." |
Previous bioterrorism training was significantly associated with knowing how to respond appropriately to an attack. However, fewer than one in five FPs reported having received such training.
The study acknowledged the critical role primary care physicians play in the public health response to bioterrorism and made specific educational recommendations to help them meet that challenge. "As the public health infrastructure is improved through increased funding, it should integrate training for front-line primary care physicians in detection, surveillance and response activities," the study read. It went on to note that AAFP has already made forays into promoting Web-based bioterrism training through its http://www.aafp.org/btresponse.xml site.
Results from the study have served to inform the Academy's efforts to develop targeted CME programming on bioterrorism, said Herbert Young, M.D., director of the Scientific Activities Division. Other significant fallout from the study is that the AAFP national research network this summer applied for a five-year AHRQ grant to develop a National Bioterrorism Sentinel Surveillance and Education Network. As of press time, no response on that proposal had been received.
This financial summary has been prepared to present an overall picture of AAFP's financial condition and operations.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| May 31, 2002 | May 31, 2001 | |
| Assets | ||
| Cash and cash equivalents | $12,150,890 | $3,946,507 |
| Receivables, net of allowance for doubtful accounts of $621,218 in 2002 and $878,162 in 2001 | 8,909,201 | 6,849,057 |
| Income tax refund receivable | -- | 6,697,900 |
| Interest receivable on income tax refund | -- | 6,848,661 |
| Inventories | 55,893 | 81,039 |
| Prepaid expenses and other assets | 2,747,485 | 2,410,217 |
| Marketable securities | 44,495,124 | 38,762,996 |
| Deferred tax assets | 111,815 | 345,487 |
| Property and equipment, at cost | ||
| Land | 5,781,848 | 5,781,848 |
| Office buildings | 30,626,918 | 30,609,715 |
| Office equipment, furniture and fixtures | 10,609,451 | 9,725,298 |
| 47,018,217 | 46,116,861 | |
| Accumulated depreciation | (8,794,777) | (6,664,997) |
| 38,223,440 | 39,451,864 | |
| Investments in deferred compensation plan at fair value | 1,544,838 | 1,689,294 |
| $108,238,686 |
$107,083,022 |
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| Liabilities and net assets | ||
| Liabilities | ||
| Accounts payable | 1,911,628 | 2,737,918 |
| Accrued expenses | 5,895,956 | 5,634,079 |
| Unearned revenue | 20,450,182 | 19,260,888 |
| Income taxes payable | 2,873,320 | 2,363,402 |
| Mortgage note payable | 21,547,537 | 22,554,192 |
| Liability for deferred compensation plan | 1,544,838 | 1,689,294 |
| 54,223,461 | 54,239,773 | |
| Net assets | ||
| Unrestricted | 54,015,225 | 52,843,249 |
| $108,238,686 |
$107,083,022 |
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| CONSOLIDATED STATEMENTS OF ACTIVITIES | ||
| Revenue | ||
| Membership dues and fees | $14,654,995 | $14,571,271 |
| Publications | 18,892,455 | 18,971,763 |
| Programs and miscellaneous | 25,352,817 | 25,488,855 |
| Investment income | 1,461,352 | 1,312,188 |
| 60,361,619 | 60,344,077 | |
| Expenses | ||
| Membership services and programs | 36,554,405 | 37,805,864 |
| Publications | 11,305,123 | 12,516,731 |
| General and administrative | 15,374,138 | 16,075,999 |
| Income taxes | 1,520,186 | 953,658 |
| 64,753,852 | 67,352,252 | |
| Other income (expense) | ||
| Income tax refunds | -- | 4,426,593 |
| Interest on income tax refunds | 335,246 | 6,848,661 |
| Income from insurance company demutualization | 6,778,308 | -- |
| Net unrealized gains (losses) on marketable securities | (1,549,345) | 968,426 |
| 5,564,209 | 12,243,680 | |
| Change in net assets | 1,171,976 | 5,235,505 |
| Net assets, beginning of year | 52,843,249 | 47,607,744 |
| Net assets, end of year | $54,015,225 |
$52,843,249 |
The above data are only a part of the complete financial statements examined by Grant Thornton LLP, certified public accountants.
The AAFP positioned itself for the future by announcing changes Aug. 29 that will create a leaner, more strategically focused Academy. The changes, which include more than 70 expense reductions and several revenue enhancements, resulted in the elimination of 11 Academy staff positions. The AAFP Board of Directors adopted the expense reductions and revenue enhancements at its Aug. 13 18 meeting -- the final step in a budget priority process that has been under way since spring 2001.
"The bottom line underscoring this arduous process is that the Academy cannot be all things to all people," said AAFP President Warren Jones, M.D., of Ridgeland, Miss. "To ensure a bright future, the AAFP must focus on doing fewer things, and doing them extremely well."
Through its strategic planning process, the Academy must identify activities at which it can be truly great, and then put its energy and resources behind those activities, the Board decided.
"Just as important, the Academy must know which activities not to pursue, no matter what the source," Jones said. "And finally, the entire organization -- on all levels of leadership and staff -- must be in strategic alignment and 'live the plan.'"
Back to the future
What sparked the budget priority process? In spring 2001, the Board of Directors and the Commission on Finance and Insurance looked at five-year projections for the financially strong AAFP. They decided the Academy needed to prioritize its activities in order to maintain that financial health in the future, and they established the budget priority process to accomplish that goal.
In October 2001, the Board chair appointed a subcommittee of AAFP officers, Board members and senior staff to develop recommendations with a positive financial impact of about $7 million. Since then -- thanks in part to the hard work of AAFP staff during the last budget cycle -- the target was cut to $3.8 million, Jones said.
The subcommittee reviewed more than 400 priority suggestions from AAFP members and staff, plus suggestions from all AAFP commissions and committees. "The subcommittee researched every suggestion before making final recommendations that the full Board considered in August," said Jones. "Members should have great confidence in the thoroughness and the integrity of this process."
The outcome
| AAFP President Warren Jones, M.D.
"Members should have great confidence in the thoroughness and the integrity of this process." |
See the story "Changes affect key AAFP stakeholder groups" for highlights of the revenue enhancements and expense reductions the Board adopted to maintain AAFP's financial strength.
Five Academy employees lost their jobs as a result of the changes announced Aug. 29. One additional staff position will be phased out, and five unfilled positions also were eliminated.
A Board report to the Congress of Delegates detailing the budget prioritization actions is posted online at http://www.aafp.org.
A town hall meeting on the budget prioritization actions will be held from 8 to 10 p.m. Oct. 13 in San Diego, prior to the opening of the Congress of Delegates.
At its Aug. 13 18 meeting, the AAFP Board of Directors adopted revenue enhancements and expense reductions that affected key AAFP stakeholder groups -- members, the Board, commissions and committees, programs, and staff. The actions were the final step in the Academy's recent budget priority process (see story "AAFP becomes leaner, more strategically focused organization").
Revenue enhancements include increased active member dues ($20 over three years), increased meeting registration fees and projected revenue increases from the AAFP Web site. Expense reductions include:
AAFP today compared with past -- members' view*
* Source: 2002 Member Attitude Survey, AAFP |
Eighty-five percent of AAFP members recently surveyed said they're satisfied with the Academy in comparison with other medical organizations; 48 percent said they're very satisfied.
These answers emerged from the 2002 AAFP Member Attitude Survey. The survey, conducted every year since 1992, serves as one of the Academy's barometers of members' feelings about the Academy, its services and other issues.
Fifty-eight percent of the 367 members surveyed in early 2002 said the Academy has improved or somewhat improved. About three in five members surveyed said AAFP leaders are responsive to their needs and opinions. The number of members who have found AAFP leadership responsive has been consistent, varying by only 3 percentage points in the past five years.
Members surveyed this year indicated less enthusiasm for their career choice than those surveyed last year. Sixty-seven percent said that if they could choose again, they would be family physicians, compared with 74 percent who gave that answer last year.
Survey respondents were asked to rate the AAFP products and services with which they were familiar. The three highest-rated services were computerized CME record-keeping, American Family Physician and patient education materials.
Seventy-six percent of members surveyed this year said the Academy is doing a good job of representing family practice within the medical community. Three-quarters of the survey respondents said the Academy is doing a good job of representing family physicians to patients and the general public, and 62 percent said the Academy is doing a good job of representing family practice to the government.
To the editor:
I am a second-year family practice resident and National Health Service Corps scholar, which means I have agreed to work in an underserved area after residency in exchange for the years that the NHSC has paid for my medical school. Most placement sites are in rural areas.
The NHSC has recently instituted a policy change that affects and concerns me greatly: NHSC participants no longer are allowed to complete fellowships following residency. I and many other FP NHSC participants had planned to do an obstetrics fellowship, knowing that current training in family practice residencies often inadequately prepares graduates to practice obstetrics in a rural or remote setting.
I feel that this change adversely affects that level of care that I -- and others -- will be able to provide to underserved communities. Furthermore, the NHSC is limiting the scope of practice and training available to FPs.
I encourage NHSC alumni and participants to write to the NHSC regarding this or to network with me via e-mail -- my address is brendanlawrencewebb@hotmail.com.
Brendan Webb, M.D.
Chicago
To the editor:
The problem FPs have with getting malpractice insurance continues. I have had an extremely difficult time getting coverage, even though I have never been sued. I have been a doctor for nearly nine years but just opened my own practice a little over a year ago. My policy last year, which cost $4,100, was set to expire in August. For the coming year, one company quoted me a premium of $16,000! I finally found a company that charged $8,300, though I had to lower my coverage slightly to get that price. It's still more than double last year's premium, but I was glad to get the coverage.
This is ridiculous! This is the top story for family physicians at this time -- keep covering it in FP Report. And the Academy should keep up the pressure on the government to solve this problem.
Babette Mitchell, M.D.
Tallahassee,
Fla.
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To the reader Write us a letter of 200 words or fewer (subject to editing). FP Report, 11400 Tomahawk Creek Parkway, Leawood, KS 66211-2672; fax them to (913) 906-6089; call (800) 274-2237, Ext. 5230; or contact fpreport@aafp.org via e-mail. |
To the editor:
I've been an AAFP member since 1967 and have taken the American Board of Family Practice certification and recertification exam five times. But now, they want me to retire -- they want to make me extinct!
I made it through the last millennium without learning how to turn on a computer. Now, if I want to keep practicing, I have to take my recertification exam on a computer. If I have to do that, I'll retire instead -- even though I had intended working for another 10 years.
I hope the ABFP will see fit to keep the "pencils and papers" for dinosaurs like me. Otherwise, they will be a factor in making the shortage of FPs in rural areas considerably more acute (and I am one of the few who still deliver babies).
Thomas Jacobsen, M.D.
Hettinger, N.D.
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If you work in a small- to medium-sized physician-owned practice, a new learning opportunity is on the horizon for you. The Crash Course on Cash, Codes & Computers premieres March 13 14 in New Orleans. This AAFP course explores information systems and the coding of diagnoses and procedures. The course also covers interpreting practice balance sheets, income statements and financial ratios. Register online at http://www.aafp.org/crashcourse.xml. For more information, call (800) 274-2237, Ext. 4148. |
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Support AAFP Foundation projects -- choose from two lapel pins for a minimum donation of $10 each. Money raised from the sale of Physicians With Heart pins boosts the AAFP Foundation International Fund. Proceeds from the 2002 Assembly logo pin benefit the Resident Repayment Program and St. Vincent de Paul Village, this year's Feed the Need project. St. Vincent's provides services to San Diego County's homeless population. E-mail kpark@aafp.org to order, or phone (800) 274-2237, Ext. 4445. |
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Proven value: Support the specialty of family practice with the purchase of AAFP Foundation greeting cards. Choose from two holiday snow scenes or the all-occasion package featuring five cards each of three designs. Packages cost $10 and contain 15 cards. Order by phone at (800) 274-2237, Ext. 4462. |
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A shipping fee may apply; Kansas residents pay a 7.275 percent tax. |
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FP Report is published by the
AAFP News Department.
Copyright © 2002 by
American Academy of Family Physicians.
