Summer's Strategies

Summer's Strategies

Edward J. Vigna, D.D.S.*:

June is that time of year when the ADA Board of Trustees attempts to see just how much you can get for a buck. Once again this year we went to the “dollar store” and came up short. This year we moved to zero-based budgeting, with staff instructed to build their budgets around what is needed for 2011 and not based on the approved 2010 budget. The initial 2011 base operating budget had a deficit of about 5.5 million. Each ADA division was asked to reduce its net budgets three times.

Adding to the challenge, ADA dues have not increased since 2008, and last year’s deficit of about $500,000 was funded out of reserves. The 2008 House resolution on dues stabilization directs the Board to “develop an annual budget and manage the association finances and reserves in accordance with the long-term financial strategy of dues stabilization. This strategy seeks to achieve long-term stability by keeping annual dues increases at or below the level of inflation, based upon the Chicago Consumer Price Index average for the prior three years. All these factors lead to a proposed 2011 operating budget of $14,951,700 in expenses and $14,217,650 in anticipated revenue. The Board recommendation is for a $7.00 dues increase. The Board is also asking for a one-time special assessment of $23.00 per member to pay for long deferred investment in information technology infrastructure.

This IT package has two important impacts. First, it helps us catch up on necessary and delayed software upgrades, especially in the area of financial management and reporting. Second, it allows us to install state-of-the-art association management software that will, among other things, help us increase non-dues revenue with enhanced e-commerce solutions. Hopefully everyone understands and appreciates that to remain a world class association we need this dues increase and assessment. I am very fearful of what could happen without these increases, as we have trimmed this budget to the bone. This decision will be up to the House of Delegates at the 2010 Annual Session.

Most if not all states have or will be introducing legislation addressing the issue of non-covered services. The obvious purpose of this legislation is to prevent insurance companies from capping fees for services not included in their plans. To date, about 15-plus states have been successful in passing such legislation. The ADA continues to work with the National Conference of Insurance Legislators to get model legislation that could be used and supported by NCOIL in states that have not yet been successful in passing legislation. One of the sticking points with getting this model legislation has to do with the following question: Once the maximum allowable has been met, are services in the plan considered as non-covered, or would they remain covered services and subject to a cap? The ADA last met with NCOIL in early July and will meet again this fall. In the meantime, we will continue to see legislative activity on the issue of non-covered services.

Earlier this month the U.S. Senate approved the landmark financial overhaul legislation by a 60-39 vote. The ADA successfully lobbied inclusion of language that would remove dental practices from the purview of the proposed Consumer Financial Protection Bureau, and we expect that provision to remain. The bill is expected to be signed into laws by the president.

As well, the Senate is currently considering a new tax extenders bill, which has already passed the House and contains a provision to tax S-corporations based on income instead of stockholder distributions. The ADA is opposing this tax, as it could impose a great burden on dental practices.

On July 18, the ADA convened a Conference on Workforce Issues in Chicago. Each state could send up to three representatives, and approximately 170 individuals were in attendance. As we all know, Workforce Models remains, in my mind, THE hot topic within the Association, and will occupy a great deal of time before the HOD this fall. The idea behind this conference was to listen and learn, from different states and individuals, their perspectives and positions of the different models. I hope this accomplished greater understanding and will set the tone for the Workforce Reference Committee at this year’s Annual Session.

Lastly, an update on the activity regarding the ADA Foundation. Following the audit conducted by KPMG, corrective action steps are in place. Several individuals previously employed by the Foundation are no longer in place. We now have an interim Executive Director and interim CFO. These are but the first of many corrective action steps that will need to be made.

Enjoy the remainder of the Summer, and I hope you are making your plans to attend the Annual Session in Orlando in early October. Please go to ada.org for all the information about Annual Session.

 

*Dr. Vigna is the Trustee to the Tenth District of the American Dental Association, representing Iowa, Minnesota, Nebraska, North Dakota, and South Dakota.