Budget, Advocacy, Guidelines See Action by Board

After hours of discussion spread over its three-day meeting in Washington, D.C., last month, APA’s Board of Trustees approved a 2002 operating budget for APA of about $51 million.

The budget discussions appeared to be particularly painful for Board members this year as they fund programs in the face of diminished investment income and declining dues revenue as the result of a drop in the number of dues-paying members and a five-year freeze on dues increases. The Board was also confronted with the fact that reserve funds have shrunk by about $8 million since 1998 due to shortfalls in the operating budget, the Medem investment, and items in the capital budget such as revamping APA’s information technology infrastructure.

As Donald Scherl, M.D., chair of the APA Finance and Budget Committee explained at the meeting, the source of APA’s budget problems lies in “expenses rising faster than actual revenues, overly optimistic dues-revenue expectations, spending not being revised to reflect strategic priorities, and new initiatives that are approved at the peak of the business cycle but continue when the cycle turns down.”

APA officers including President Richard Harding, M.D., and President-elect Paul Appelbaum, M.D., warned the Board that to work its way back to sounder financial footing, APA must make difficult decisions about restructuring its operations and governance. This in all likelihood will result in a smaller APA that focuses its resources on programs that help it meet its most important advocacy and member-service goals.

Scherl emphasized that “APA can no longer afford to try to be all things to all members,” as it has attempted to be in the past. “This is a time for hard choices, for understanding what the Association’s core mission is, what activities are necessary to support the core mission, and which are desirable and worthy but no longer affordable.”

Appelbaum encapsulated the budget situation by noting that large cuts in programs may be on the horizon. “Everyone’s ox will be gored,” he said.

Because of budget-related issues, the Board revisited its October decision to move APA’s headquarters from downtown Washington to an office building across the Potomac River in Rosslyn, Va., next year. The Board voted to have the APA central office remain at its current location at 1400 K Street and accommodate 230 staff there. (Currently APA has approximately 244 staff and 16 unfilled positions.) The Board, however, did indicate that if financial terms highly favorable to APA could be negotiated in the next few weeks, a headquarters move to Rosslyn would still be possible.

The lease expires later this year on three of the seven floors that APA currently occupies at 1400 K Street. The Board approved funds to do the minimal amount of renovation necessary to accommodate staff on the remaining four floors. Other options, including renting space elsewhere, may be considered for APA staff who do not fit into the new configuration. Medical Director Steven Mirin, M.D., pointed out that APA is considering how to implement a telecommuting option for a limited number of staff.

While the move to Rosslyn would have been a more cost-effective alternative in the long run, the Board was unwilling to use reserves at this time to pay for moving costs and other related relocation expenses.

The Trustees have taken several steps to address the financial problems and the way APA goes about achieving its goals. Several months ago Harding appointed the Long-Range Budget and Planning Task Force, with Appelbaum as its chair, to better identify and define the activities that are at the core of APA’s mission. Once that task is completed, the task force will make recommendations to the Board for reorganizing APA to reduce operating expenses and increase efficiency while carrying out the refined mission.

In addition, the Board voted last month to have Harding appoint a new financial oversight committee that will meet monthly to review deviations from the annual budget, and if changing circumstances and priorities require an adjustment to the budget, the committee will bring those changes to the APA Executive Committee for approval.

The Trustees also instructed the medical director and the Finance and Budget Committee to consider methods for funding the position of director of the Division of Minority and National Affairs, a position the Board approved, but for which money has not yet been allocated because of budget constraints.

On other matters of concern to psychiatrists and their patients the Board voted to

• reaffirm its October agreement with Medical Director Steven Mirin, M.D., “and its intention to execute a contract for his second term as medical director.” At the Assembly November meeting the Assembly Executive Committee had expressed its dissatisfaction with the Board’s and medical director’s handling of APA’s finances and asked that the Board reconsider the medical director’s new contract.

• approve a revision of the “Practice Guideline for Treatment of Bipolar Disorder,” which was originally published in 1994 as the third guideline in the practice guideline series (see page 12).

• provide grants to the Illinois and New Mexico district branches to assist in their advocacy efforts to fight moves in their state legislatures to expand psychologists’ scope of practice. New Mexico, which last year came within hours of being the first state to allow psychologists to prescribe medication, is gearing up for another battle on the same issue.

• change the definition of an early career psychiatrist (ECP) to delete the age criterion. The only remaining criterion for ECP status is that a member be in his or her first seven years after becoming eligible for general member status.

• join an amicus brief prepared by the AMA in the case Rush Prudential v. Moran. The Trustees authorized a $5,000 contribution to the AMA’s cost of preparing the brief. The case, which is before the U.S. Supreme Court, revolves around whether the federal ERISA law preempts an Illinois state law requiring independent review when an HMO refuses to pay for treatment a physician maintains is necessary. Illinois is one of several states that have statutes requiring an independent review when such disputes arise, and the AMA maintains that ERISA does not preempt state statutes mandating an independent review. Its brief also emphasizes the importance of not compromising the ability of physicians to provide the best medical care they can.

• endorse a position statement on carveouts passed by the Assembly that explains the discriminatory nature of separating the funding and delivery of psychiatric care from that of general medical services. The statement puts APA on record as condemning the way carveouts marginalize psychiatric treatment and thus stigmatize people who have a mental illness.

• approve the APA position statement “Minimum Necessary Guidelines for Third-Party Payers for Psychiatric Treatment.” The statement, endorsed by the Assembly in May, responds to a provision in the federal government’s recently enacted privacy rule that health care providers need to disclose only the “minimum necessary” information for a given insurance review or other purpose. It leaves this determination in the hands of physicians and health care professionals. The APA paper suggests standards for such information disclosure under three situations—outpatient treatment for which payment has been preauthorized, outpatient care that requires authorization before an insurer will pay for it, and inpatient psychiatric treatment.

• approve three violence-related position statements. One deals with assessing violence risk and emphasizes that while psychiatrists “cannot predict dangerousness with definitive accuracy, they can often identify risk factors associated with an increased likelihood of violent behaviors.” A statement on prevention of violence stresses that psychiatrists “must take a leadership role in the prevention, diagnosis, and treatment of victims and perpetrators of violence and that APA supports educational efforts to prevent violence.” The third position statement focuses on family violence. It says that APA “recommends that its members learn about the prevention of domestic violence”; participate in state, local, and national agencies that advocate on behalf of violence victims; and develop education programs for medical students and other physicians that teach violence prevention, identification, and rehabilitation. ▪