How to Increase APA Income by $1.5 Million/Year

April 16, 2010
Michael Blumenfield, MD

There is a difference of opinion among psychiatrists whether it is time to restructure the APA to a “leaner and meaner” organization where activities and functions by necessity have to be cut back because of reduced income.

Recently I wrote about budget cuts which the Board of Trustees has made to the APA Assembly and the Components as well as the possible implications of them. There is a difference of opinion among psychiatrists whether it is time to restructure the APA  to a “leaner and meaner” organization where activities and functions by necessity have to be cut back because of reduced income. Whereas others wonder if there are untapped sources of income and believe there are reasons for the APA to continue to grow and expand it’s advocacy for our patients and our profession.

I would like to examine several possible sources of increased income for the APA, which could be used to prevent a cut back of the Assembly and the Components, as well allow for consideration of developing new important programs.

 Dues Increase

If the membership wishes increased services, they should be willing to consider paying directly for them. The national dues have not been increased for several years. There are different categories of membership, which have different levels annual dues. If the dues are increased an average of $50 / member over a five year period, this would gradually increase the income starting with $380,000 the first year. At the end of the five year period the APA  income would be increased $1.9 million /year. Of course, there is the possibility that some small percentage of the 38,000 members would drop out because of the dues increase. On the other hand, if new exciting activities were developed as described below, we could increase membership. A conservative estimate would put this at an average of $500,000/year.

How to Use Profits from DSM 5

The APA has made an arrangement with APPI so for DSM V the APA will own the rights to DSM V when it comes out in 2011. I understand the previous performance of DSM IV cannot reliably predict the profits from DSM V. However, we still can anticipate this book will be used worldwide as will the accompanying texts which will be published. Most mental health professionals, institutions, government agencies, attorneys, etc  will want to own a hard copy of it, even though there is a trend to looking things up on the Internet. I also assume that a DVD version of it will be sold. On the basis of some discussions I had  with people who know something about these things,  I would predict that the APA can anticipate a profit of $10 million over the next 8-10 year for this product. This would be a conservative estimate. Therefore if half the proceeds were put into the APA  reserves that would allow another $500,000/year available for the APA budget.

 APA Foundation Could Take Over Significant Part of Public Affairs

The APA Foundation is suppose to be 100% in sync with the APA and certainly shares the same goals and aspiration for mental health and  education of the public, increasing public awareness and raising money to do good projects for mental health. It is only because of some technical, legal issues related to taxes that there are separate Boards of the APA and the Foundation. There are efforts being made to allow these organizations to function more in unison in the future. As I mentioned in a previous blog, I believe, the forced reduction of the Communications Component has seriously taken away many opportunities for public affairs programs. I therefore suggest that the Foundation should appoint staff consultants who are very familiar with the previous APA public affairs program as well as the current ones. They should use the resources of the Foundation  to run national, state and local public affairs programs as a major initiative. They can run a Public Affairs Institute, advise and assist mental health advocates from various District Branches to write letters to the editor, run educational training for psychiatrists etc. They can liaison with the APA while still keeping their independence, if that is necessary. They can take over some of the spending in public affairs that have been in the APA budget. I would estimate that this could easily result in a savings for the APA of at least $200,000/year without any loss in the quality of public affairs for mental health and American Psychiatry.

APPI Should Use APA District Branches as a Commissioned Sales Force

 APPI was originally developed as an arm of the APA, which was

expected to be completely dedicated to the APA mission. It has become the most successful publisher of psychiatric books in the world. Even after having sold the rights of DSM back to the APA they still should be able to make considerable profits. Although there is still that problem of having separate Boards although appointed by the Medical Director of the APA, they should be interested in doing everything possible to support the APA. Every publisher makes arrangements with sales teams to take their books into a particular setting, make sales and then pays them a commission. I propose that each District Branch should become a commissioned sales representative for APPI. They should include APPI advertisements for APPI books in all their mailings with special discounts as well as promoting books at all meetings and activities. District Branch members should be aware that buying their books through the District Branch would allow their DBs to receive significant commissions. Once it is determined how much money the DBs are receiving, a certain percentage of APA support or revenue sharing from the Assembly budget being given the DBs should be reduced. The net result should be increased funding for the DBs and decreased support from the APA to the DBs. It might turn out that APPI might make less of a profit but they would be serving their overall mission to support the APA. There would be an incentive for the DBs to promote APPI books and products which could include sales to the local mental health community whom they know best as well as the public in their area. These activities might even drive up APPI profits. I estimate the APA could save at least $100,000/ year by this method.

 Use of State of the Art Video Communication

I know that the APA has made great strides in introducing some video communications and have encouraged the use of conference calls, webinar and perhaps Skype meetings. I personally believe that face to face in person meetings should not be completely eliminated and that the combination of at least one face to face meeting combined with state of the art video/personal computer conferencing is now feasible.  I would suggest that the APA become very aggressive in advocating such communications for at least some percentage of most committee meeting including, as an example, of at  least one Board of Trustees meeting. The savings in hotel, travel, food can make a considerable savings for the APA. One would almost think that the members should contribute to buying their equipment own since they would save time away from practice. However, I believe that an investment by the APA in providing equipment in the short and long  run wo

uld save the APA money. I would suggest that the APA could save at least $50,000/year.

 

 

 

APA Needs to Go Global

 I have saved my most ambitious proposal for last. I am convinced from what I see happening in the economy, business and in the various activities of so many people that I know, that our lives are becoming more global in every way. I believe that the APA has to begin to take significant steps to become a global (still American) organization.  We need to look at every aspect of our organization and see how we can become more global. Starting with membership, we should offer a membership category to international members at a reduced cost  (to cover journals , mailings etc plus enough to make a profit for the APA). This lower rate should be contingent on the international members being a member of their own national psychiatric organization or the World Psychiatric Association. This way we won’t compete with international organizations but would allow them to encourage membership as global members of the APA. Obviously we will need to provide international members with special benefits such as discounts of APPI books, facilitated access to disaster materials, perhaps some special online or Skype CME courses. As part of our efforts to go global, the newly invigorated Assembly (with some increased funding) should have a certain number of international delegates to the Assembly perhaps one from each country or from each major area of the world for a start. Oh yes, the APA Assembly should be broadcast live online (as well as being archived) so our members in the US and all over the world can see American psychiatry in action. While we are doing this we should set up electronic voting which I unsuccessfully advocated for when I was Speaker of the APA Assembly - the price has come down and we do need to showcase the fantastic democratic methods we use in the Assembly when we broadcast the proceedings around the world. I estimate over the next five years we should be able to add at least 1000 global members – so lets figure in the long run we add at least another $100,000 /year income after added expenses are taken into account.

How It All Adds Up

I realize that I am letting my imagination get a little carried away. I tried to build these ideas on facts and speculation that has good foundation. I may be wrong in some of my calculations or may be a little ahead of my time (or perhaps behind if some of these things are being contemplated already). However I tried to be conservative in my estimates and I came up with almost  $1.5 million dollars/year available for reinvigorating  the Assembly and reestablishing the Components in a responsible way. I am also suggesting that there may be innovative approaches to increasing available funding.  I encourage our members and leadership to continue to look for newer and better ways of doing things for our patients and our profession.