February 1998 Bulletin

ACROSS THE PRESIDENT'S DESK

AAOS focus is education, OSA to carry on advocacy

Parallel organization gives AAOS flexibility


"We can maintain our educational function and provide the other services." - Douglas W. Jackson, MD

In my last "Across the President’s Desk" message, I reported that the Board of Directors determined in September 1997 that "it is the time, it is necessary and it is fiscally appropriate"for the Academy to consider the creation of a 501©(6) organization to carry on the advocacy activities of the Academy. The following is a description of your board’s action to create a parallel 501©(6) organization.

The Academy is structured as a 501©(3) educational organization. Education is our primary purpose. We also have been engaged in lobbying and advocacy activities for several years to meet the continual legislative challenges to the delivery of health care to our patients and to the viability of our practices. In September, the Academy’s staff and outside legal counsel reviewed the Internal Revenue Code limitations on advocacy activities by educational organizations with a 501©(3) tax structure. The board also heard that the Internal Revenue Service (IRS) had taken a tougher stance on the lobbying activities of not-for-profit educational organizations. These two factors could restrict our flexibility in the future.

Consequently, we elected to have the Academy come under the 501(h) "safe harbor" provisions of the Internal Revenue Code until a longer-term solution could be developed. The 501(h) "safe harbor" provision establishes specific monetary limits on the amount of lobbying that a 501©(3) educational organization can conduct without being challenged by the IRS.

In December 1997, your board participated in a workshop that focused on all the issues surrounding the Academy’s tax status and on the creation of a 501©(6) organization. This was not the first time that the board intensely studied and discussed the possibility of establishing a 501©(6) organization. Previously, a board task force studied the pros and cons of forming a 501©(6) organization and unanimously recommended the Academy form such an organization and at the same time retain its 501©(3). Something I have learned while talking with past presidents is that almost every board has discussed this issue in one way or another during the past 25 years. What is different now is that the times and regulatory rules have necessitated a change. This decision has been the result of an ongoing methodical assessment of the changing times in relationship to our strategic plan.

At a board meeting following the December workshop, the board was unanimous in the decision-making and established a parallel-member not-for-profit 501©(6) membership organization. The Academy will remain a 501©(3) organization and will have no change in its purpose. Our strategic plan is driving this decision to give us greater flexibility and allow us to adapt to the changing times and regulations - predominantly the tax code - for not-for-profit organizations.

The new parallel-member organization, initially to be called Orthopaedic Surgeons of America, will house our departments of State Society Relations and Health Policy, and our Washington office. This new organization will protect the 501©(3) status of Academy and make no functional changes in the Academy. The changes will be seamless and imperceptible to most of our members. Many members of other not-for-profit organizations are not aware of the details of the tax status of their organizations. In short, we are taking this step to maintain our flexibility to act on behalf of the fellowship and our patients.

The board and I believe the Academy must continue to participate in health policy and grass roots activity for our patients, our profession and our members. This new organization will continue to speak strongly for our patients and the interests of our profession.

Some of you have written to me that we should never represent our members’ self interests. I believe we must, on occasion, speak strongly for our profession and its members because there are forces that can dismantle some of the cherished aspects of our profession in many different ways. This will continue to require us to carefully monitor, assess and choose those issues we agree upon. These issues include our scope of practice, fair reimbursement, funding of residency education, funding of musculoskeletal research, patient access to orthopaedic surgeons, price controls, malpractice issues, representation of orthopaedic surgeons in managed care and health care reform, and payers’ decisions. These are just a few of the reasons that require us to be part of national and grass root debates and solutions.

Some of you say, "No amount of money and effort will make a difference. Whatever happens will occur regardless of what we do." I disagree strongly. We have had success with coalition-building, educating patients and our colleagues and lobbying. Good ideas, constructive criticism and alternative solutions can be like a snowball that is rolled slowly in the beginning. It keeps getting bigger as it moves forward. Our coalition-building and fairness approach are a dramatic example of this and I believe we have been quite successful.

I am not willing to leave our profession to chance. Your Board of Directors has a strong obligation to the present and future of our orthopaedic specialty and the patients we serve. This new parallel-member organization gives us more flexibility and is in compliance with tax regulations.

Your Board of Directors is very conscientious in using our funds, staff and volunteers. Decisions are always made in the best interests of our patients and our profession. We will continue to strive to be cost-effective and fiscally responsible. We do not anticipate that we will spend more than we did last year on advocacy activities which accounted for less than 3 percent of our annual budget.

Some of you say you are concerned that forming a ©(6) organization signals an undesirable change in the direction for the Academy. Many of us would prefer not to change anything and keep health care delivery the way it was. That is not possible. We are functioning in a society and environment that is undergoing revolutionary changes. We cannot stay the same. This is a process of "renewal" and is vital to our organization. It is the process in which your board has reconfirmed our commitment to our core values of education and, at the same time, has introduced the flexibility we need to be more effective in our participation in the debate of health care delivery. The Academy needs this structural change while its function for you and your patients will remain the same.

In concluding my remarks, it is quite sobering to realize this is the last column I will write as your president. Serving in this position has been a stimulating, rewarding and humbling experience. During this year, I have been continually impressed with the wonderful membership and the talented professional staff in our Academy. It has been a satisfying experience to be able to turn to the collective wisdom of our Board of Directors, the councils, committees and individual members for solutions, suggestions and expertise.

Join me at the opening ceremony of our Annual Meeting on March 19 when we will have a chance to celebrate this year’s accomplishments. We will focus on the positive and how wonderful it is to be an orthopaedic surgeon. There is so much to celebrate and be proud of in our profession and organization. For example, we started the year with a workshop on "CME for 2001" to address the changes in adult education that the Academy must incorporate in the future, we launched a new communication plan with our membership (this new Bulletin is only one part of the plan) and we have made a major commitment to the Orthopaedic Learning Center. Our CME programs and Summer Institute continue to respond to our membership’s needs while setting the highest standards in medicine. We have established a research institute to direct and manage our outcomes instruments and data management and we have restructured to protect our 501©(3) educational institution tax status and to provide additional flexibility.

These represent some of this year’s landmarks; join me in hearing a more detailed listing of your Academy’s year at our Annual Meeting. I wish I could have spent each column writing about the positive and pride-producing efforts of our Academy. Because of the changing times in which our patients, profession and members find themselves, I chose to focus on the outside threats to our profession, the patients we serve and our members.

I am looking forward to seeing you in New Orleans in March for a great educational and professional experience. Our Annual Meeting is our flagship and is the premiere musculoskeletal meeting in the world. Take advantage of it. I will see you there.


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