Published: October 24, 2013

Proposed 2011-2012 Combined Budget

John W. House, MD Secretary-Treasurer Each spring, AAO-HNS/F staff leadership works with members of the Finance and Investment Subcommittee (FISC) to develop a proposed combined AAO-HNS/F budget for the next fiscal year. The process begins by taking into account the direction provided from the Boards of Directors (Boards) of the Academy and the Foundation during the December strategic planning meeting. Once the proposed combined budget has been thoroughly vetted by the FISC, the budget is reviewed by the Executive Committees and presented to the Boards for approval. Per the AAO-HNS/F bylaws, a summary of the proposed budget must be published in an appropriate Academy publication and that a copy shall be made available to any member requesting it in writing reasonably in advance of its adoption. The proposed combined budget presented here has been discussed in detail with the full Boards and will be officially approved as of June 30. The proposed 2011-2012 combined budget conditionally approved by the Boards takes into account the trends that are shaping the future of the industry. These include increasing continuing education needs; increasing sub-specialization; increasing needs for research, quality, and evidence-based medicine (EBM); increasing pressure for cost-effectiveness; increasing government involvement; increasing use of technology and connectedness; and evolving workforce supply and demand. In addition to prioritizing the direction of the Boards, the budget was developed based on current year operations, with adjustments for anticipated changes in program revenues and expenses. It is presented on a modified cash basis and reflects break-even operations. The majority of revenue is earned from two areas: membership dues and Annual Meeting registrations and fees. The proposed 2011-2012 combined budget reflects a 2.5 percent increase in membership dues. The other major areas of budgeted revenue are product and program sales, royalties, and corporate and individual support, which continue to be very strong. Expenses are separated into two areas: direct operating costs related to each business unit; and allocated costs, related to staffing and benefits as well as the operating costs that are incurred for the good of the whole organization. The complete budget is available to any Academy member who requests it in writing. Send requests to Brenda S. Hargett, CPA, CAE, chief operating officer, care of Bulletin@entnet.org. AAO-HNSF Combined Budgets Approved Budget 2010-11 Proposed Budget 2011-12 Revenue Dues & Membership $6,200,000 $6,350,000 Royalties 1,338,531 2,352,000 Corporate & Individual Support 1,554,700 1,030,000 Meetings 6,392,215 6,626,000 Products & Program Sales 2,225,340 1,542,500 Investments 618,000 664,000 Funds Released from Restrictions 222,900 483,500 Miscellaneous 117,000 78,000 Total Revenue $18,668,686 $19,126,000 Expenses Direct Operating Costs Office Expense $705,258 $423,400 Occupancy 196,500 182,500 Travel & Entertainment 706,745 818,100 Meetings 2,604,199 2,595,900 Printing and Production 1,295,870 541,200 Communication & Software 398,384 320,100 Consultants & Professional Fees 2,872,646 3,743,000 Total Direct Operating $8,779,602 $8,624,200 Allocated Costs Salaries & Benefits $7,089,698 $7,765,200 Occupancy 1,728,799 1,626,800 Support 1,070,587 1,109,800 Total Allocated $9,889,084 $10,501,800 Total Expenses $18,668,686 $19,126,000

John W. House, MD Secretary-Treasurer

Each spring, AAO-HNS/F staff leadership works with members of the Finance and Investment Subcommittee (FISC) to develop a proposed combined AAO-HNS/F budget for the next fiscal year. The process begins by taking into account the direction provided from the Boards of Directors (Boards) of the Academy and the Foundation during the December strategic planning meeting.

Once the proposed combined budget has been thoroughly vetted by the FISC, the budget is reviewed by the Executive Committees and presented to the Boards for approval. Per the AAO-HNS/F bylaws, a summary of the proposed budget must be published in an appropriate Academy publication and that a copy shall be made available to any member requesting it in writing reasonably in advance of its adoption. The proposed combined budget presented here has been discussed in detail with the full Boards and will be officially approved as of June 30.

The proposed 2011-2012 combined budget conditionally approved by the Boards takes into account the trends that are shaping the future of the industry. These include increasing continuing education needs; increasing sub-specialization; increasing needs for research, quality, and evidence-based medicine (EBM); increasing pressure for cost-effectiveness; increasing government involvement; increasing use of technology and connectedness; and evolving workforce supply and demand.

In addition to prioritizing the direction of the Boards, the budget was developed based on current year operations, with adjustments for anticipated changes in program revenues and expenses. It is presented on a modified cash basis and reflects break-even operations.

The majority of revenue is earned from two areas: membership dues and Annual Meeting registrations and fees. The proposed 2011-2012 combined budget reflects a 2.5 percent increase in membership dues. The other major areas of budgeted revenue are product and program sales, royalties, and corporate and individual support, which continue to be very strong. Expenses are separated into two areas: direct operating costs related to each business unit; and allocated costs, related to staffing and benefits as well as the operating costs that are incurred for the good of the whole organization.

The complete budget is available to any Academy member who requests it in writing. Send requests to Brenda S. Hargett, CPA, CAE, chief operating officer, care of Bulletin@entnet.org.

AAO-HNSF Combined Budgets
	Approved Budget 2010-11	Proposed Budget 2011-12
Revenue
Dues & Membership	$6,200,000	$6,350,000
Royalties	1,338,531	2,352,000
Corporate & Individual Support	1,554,700	1,030,000
Meetings	6,392,215	6,626,000
Products & Program Sales	2,225,340	1,542,500
Investments	618,000	664,000
Funds Released from Restrictions	222,900	483,500
Miscellaneous	117,000	78,000
Total Revenue	$18,668,686	$19,126,000
Expenses
Direct Operating Costs
Office Expense	$705,258	$423,400
Occupancy	196,500	182,500
Travel & Entertainment	706,745	818,100
Meetings	2,604,199	2,595,900
Printing and Production	1,295,870	541,200
Communication & Software	398,384	320,100
Consultants & Professional Fees	2,872,646	3,743,000
Total Direct Operating	$8,779,602	$8,624,200
Allocated Costs
Salaries & Benefits	$7,089,698	$7,765,200
Occupancy	1,728,799	1,626,800
Support	1,070,587	1,109,800
Total Allocated	$9,889,084	$10,501,800
Total Expenses	$18,668,686	$19,126,000

From the President: Building Long-Term Financial Stability and a Strong Specialty

I am pleased to report that the Academy is in a sound financial position. In this issue, AAO-HNS/F Treasurer John W. House, MD, presents the proposed FY 2011-2012 combined budgets, which has been reviewed in detail by the Finance and Investment Subcommittee (FISC) and the Boards of Directors. You will note that the budget is balanced and has been prepared on a modified cash basis, taking into account, for the first time, all debt service payments. Dr. House reports too that operations for FY 2010-2011 are expected to provide a contribution to reserves as the result of a great annual meeting experience in Boston and the savings generated in other areas. This budget has been closely linked by our leadership to our strategic priorities and reflects our commitment to prepare for present and future trends. These include demands for: • offering performance-based, behavior-modifying continuing education; • researching and offering evidence-based treatment options; • providing high-quality patient care that is universal; • affecting influence on the increasing government involvement in care delivery; • integrating technology in care and communication; and • anticipating shifting workforce issues. I am grateful to Dr. House, the FISC, and the boards for the leadership they have shown in developing such a responsible budget. The manner in which this is done puts our U.S. Congress to shame. This is a budget that can lead us into the future and sustain the legacy that is otolaryngology. As you review “Candidates for Leadership” on page 31 of this issue, keep in mind the kind of leadership we need to meet these future needs. Guideline Leadership Another positive acknowledgment for the activities of the Foundation came this spring when the Institute of Medicine (IOM) released its long-awaited report, “Clinical Practice Guidelines We Can Trust,” and a companion report, “Finding What Works in Healthcare – Standards for Systematic Reviews.” Of note, the IOM report referenced the participation and comments of Richard M. Rosenfeld, MD, MPH, Foundation journal editor, and referenced the Foundation’s “Clinical Practice Guideline Development Manual,” June 2009, in multiple places throughout the report. The Academy is not only in close alignment with published best practices, but was cited for its processes as reference for IOM recommendations. Part of the report’s work has been to update us all on the evolution of clinical guidelines. In the 20 years since the IOM’s first report on the subject, the definition of a guideline has changed from the original “systematically developed statements to assist practitioner and patient decisions about appropriate healthcare for specific clinical circumstances” to “clinical practice guidelines are statements that include recommendations intended to optimize patient care that are informed by a systematic review of evidence and an assessment of the benefits and harms of alternative care options.” The Foundation’s influence has been palpable. Membership Renewal Successes Membership retention activities for our Academy have been successful for 2011. This year’s dues billing cycle began with a total membership of 11,635, including 10,219 dues paying active members and 1,416 life and honorary members. As of this writing, we fully expect to reach our stretch goal of 98 percent retention rate for the 2011 membership cycle. In order to continue to refine the dues renewal process, a greater emphasis was placed on encouraging members to renew online. About 37 percent of renewals were completed online, an 11 percent increase over online payments for 2010. With increased focus on online renewals, we were able to reach more members with email reminders. This enabled us to delay the mailing of a physical second dues invoice until late February. As shown in the month-by-month renewal data, we maintained strong renewals while decreasing the size of our second dues mailing from 2,812 in 2010 to 2,517 in 2011. It Calls to Me In the spring I met with Foundation staff to arrange a site visit to begin hands-on preparations for the upcoming AAO-HNSF Annual Meeting & OTO EXPO, September 11-14 in San Francisco. Our time there was well spent. Although the weather was typical of spring anywhere, a little rain and a little sun, the city of San Francisco itself was thrilling in its proverbial display of a dramatic setting combined with cosmopolitan polish. To bring some of that zest to you first-hand, as you begin to register for the meeting, our site team put together a few video presentations that you will see throughout the summer in emails and on the special annual meeting website that opened last month. We hope some of the city’s flavor comes through to you as you watch these clips. I am looking forward to seeing all of you in San Francisco for this terrific annual meeting.

Technology Offers Physicians Opportunity, Peril

M. Steele Brown, special to the Bulletin In the ever-changing world of medicine, technology can be used as a tool to break down the wall between doctor and patient. Websites, electronic medical records, blogs, and email — all of these technologies can serve as tools to bring doctors and patients closer together. Although technology can increase a communicator’s reach, it is also important to point out that the technology cannot do the actual communicating itself. David Reiter, MD, DMD, MBA, professor of otolaryngology—head & neck surgery and facial plastic & reconstructive surgery at Jefferson Medical College in Philadelphia, said he has spent considerable time researching the relationship between doctor-patient communication and patient outcomes. He said his research shows strong indications that patients do better when their doctors communicate more effectively with them. The problem is, doctors aren’t always the best at discourse. “Physicians, for whatever reason, haven’t always been good at listening to what the patient is saying,” he said. “Instead, we expect the patient to focus on what we are saying, which can lead to missing out on certain information. Many patients feel intimidated in the traditional face-to-face doctor-patient encounter and forget to mention everything they planned to discuss when they came into the office.” Dr. Reiter, who is also the associate chief medical officer of Jefferson University Hospitals, as well as the medical editor of Facial Plastic Times, said that while this news is not groundbreaking, it does present an opportunity. Using technology, physicians can supply patients with a more thoughtful forum in which to discuss their condition and ask questions. “Patients cannot remember everything — even if they write all of their questions down, if they feel intimidated by the physician, they might not think to ask the right questions until they are driving home in their car. Then, it is too late,” he said. “But now, with technologies like email and texting, patients have more time to organize their thoughts and asks questions more completely. Instead of forgetting about the unanswered questions, patients can send the doctor a well-thought-out message that better conveys their issues.” Dr. Reiter said that in his experience, many doctors are resistant to taking full advantage of electronic communication tools because they see this “e-relationship” with patients as one that allows the patient to question the physician’s expertise. That, he said, is a mistake. “Physicians have to accept that this is not an adversarial relationship, but one that enhances openness,” Dr. Reiter said. “There is a finality to the encounter in the office that does not exist when you bring electronic communication tools into the mix. Back to School Dr. Reiter said that education and practice, as well as feedback on performance, are the keys to helping physicians become truly effective communicators. And unless you become a better communicator, you have no business worrying about electronic media as a path to your clients’ hearts. Technology is the tool, not the answer. “You cannot communicate effectively simply because you’ve thrown your message out on more channels without any regard to what you’re saying or who you’re saying it to,” he said. “A lot of studies show that physicians are not well-trained in communication, but what’s worse is that most of them believe that they are a lot better communicators than their patients think they are. Again, we are not listening to our patients.” The Doctor Is Always In One of the great benefits of technology is that it can give patients 24-hours-a-day access to their physician. Of course, that is also one of technology’s real downsides, Dr. Reiter said. But it doesn’t have to be. “Physicians used to schedule time to answer phone calls and respond to patient questions,” he said. “Most doctors still adhere to that, but what makes technology great is that it is easier to respond because you are not limited to the normal contact hours. With email, you can respond to your messages during dinnertime without interrupting your patients at home. So now, doctors have more flexibility and are able to use their in-office hours more productively because they are not making calls for two hours a day, nor are they sitting by the phone waiting for a callback.” Social media platforms such as Facebook, Twitter, and blogs also allow physicians an opportunity to reach new patients and protect their reputation. Christopher Y. Chang, MD, a private practitioner at Fauquier ENT Consultants in Warrenton, VA, said he primarily uses YouTube and his blog — http://fauquierent.wordpress.com/ — because he can control the message. “The whole point, in the end, is to promote the practice,” he said. “People are reading the information I want them to read and they are subscribing because they are interested in the topics. There is a lot of garbage out there. If I can give people more accurate, up-to-date information, it is good for potential patients and it is good for the practice.” Dr. Chang said he uses Twitter and Facebook mainly to drive traffic to YouTube and the Fauquier ENT Blog, which increases his chances of showing up higher on the list during a Google search. “When people do a search on an otolaryngology topic, I want to be No. 1 on the top of those search results,” he said. “I have the blog linking back to my practice’s website, as well as any YouTube content and my Twitter page. “With all of these linked together, when someone subscribes to my blog, the chances are greater they’ll click through to one of these pages. This traffic gets you a higher ranking from Google.” Dr. Reiter said there are many physicians who feel there is insufficient time to build on-line relationships and promote their practices this way, deciding to stay away from social media altogether. “It is very important that a physician should embrace every avenue available to him or her to get in touch with the patient population,” he said. “Isolation from the community has been a problem for physicians for years. Social media is one way for doctors to become a more integral part of the community, and physicians who use it are more likely to have good relationship with that community.” Ryan D. Madanick, MD, director of the UNC Gastroenterology & Hepatology Fellowship Program at the University of North Carolina School of Medicine in Chapel Hill, is using the Internet to get his message out. In a recent entry on his “Gut Check” blog (http://ryan madanickmd.wordpress.com/2011/03/06/131/), Dr. Madanick wrote about his experience in an ER when he was getting his broken nose reset by a group of otolaryngology residents. “I’m a doctor, so I want to throw out the caveat that it is possible that my emergency room experience was anything but typical,” he said. “But it was great because the group of residents seeing me gave me the choice of whether to get my nose set right there or come back and have it done later under sedation. They included me in the process, educating me about the options rather than telling me what to do and when to do it. Over all, I was really impressed, so I talked about it in my blog as an example of what to do when treating patients.” Dr. Madanick said that his blog allows him to get in the habit of writing more, as well as get in touch with students and patients. “As an academic, I need to write more,” he said. “On the altruistic side, I want to get out into the public domain and get my opinions about patient-based topics out there – things they should ask or explaining how and why we, as physicians, do things. The other is to give to doctors a patient-centered approach in context of being a GI.” Of course, while these types of websites allow for greater accessibility, they also allow for potentially inappropriate exchanges with patients, Dr. Reiter said. “A blog can give insight into the doctor, as well as the other way around,” he said. “But if you’re going to do it, you have to be honest and open too, without taking on an assumed persona. “I liken it to online dating sites where people lie about who they are. People need to keep a balanced perspective regarding what they read online, because it is just as easy to be seduced by a cerebrally adept doctor as it is by an online dater.” Dr. Reiter said that physicians also need to remember that whatever information they put out into the electronic domain will remain there forever. “Everyone needs to remember once committed to e-media, it is permanently archived for the world to find,” he said. “People write things in anger and haste, forgetting that everything you say in a blog or in an email is there for the scrutiny of the world forever. Dr. Reiter said physicians also need to be careful in responding to those that are not yet bona-fide patients. “If you are putting medical advice out on a blog, for example, there is the potential you are establishing a doctor–patient relationship without ever talking to these folks,” he said. “You need to think just as carefully about what you are saying to people online as you do when you say it in person. Once you commit it to the electronic forum, it is there for people to read for the rest of your career. So again, you had better make sure you are communicating your ideas and thoughts clearly, because the computer is not going to do it for you.”