Hospital associations are feeling the pinch as their cost-cutting members scrutinize the value of trade groups.
Some signs of the strain:
* In July, Cleveland's University Hospitals Health System and the Sisters of Charity of St. Augustine Health System quit the Cleveland-area hospital association, called the Center for Health Affairs, wiping out nearly a quarter of the association's $2 million in annual dues.
* Earlier this month the Massachusetts Hospital Association acquired the New England Healthcare Assembly, an education and networking forum. The merger is expected to lower overhead for educational services.
* The Kansas and Missouri hospital associations earlier this year announced an alliance to integrate services, citing the need to expand benefits without raising dues. On a smaller scale, state associations in Massachusetts and Rhode Island held a joint meeting in June.
"We're all looking at ways to share costs," said William Flynn, chief operating officer of the Massachusetts Hospital Association, who predicted more collaboration among associations.
Metropolitan and regional associations are particularly vulnerable to membership declines brought on by financial pressures and market consolidation. Since 1994, at least 12 such groups have disbanded or merged (See chart, p. 13).
In fact, the number of regional and metropolitan hospital associations has dwindled to 31 this year from as many as 49 in 1989, according to data from the American Hospital Association. It's a trend that could accelerate amid the current round of cost-cutting.
"In this tightening marketplace, I don't think people can afford the luxury of multiple or highly specialized associations," said David Feinwachs, general counsel to the Minnesota Hospital and Healthcare Partnership, formed from the 1995 merger of the Minnesota Hospital Association and the Metropolitan Healthcare Council in St. Paul.
The erosion of state certificate-of-need laws, enhanced hospital competition and the growth of systems have conspired to diminish the importance of local associations.
Richard Wade, the AHA's senior adviser for communications, predicted that more regional and metropolitan associations will reduce dues and implement pay-as-you-go services such as educational forums, or add value by facilitating collaboration on community issues.
The AHA itself is in a four-year dues slump, brought on by wave after wave of hospital consolidations (See story, above).
"One of the places you always look to cut costs is in that item called memberships. That's where you begin to cut to the bone," Wade said.
The costs of running a local association are significant. Dues often run in the tens of thousands of dollars per hospital. Art Spies, senior vice president for membership services at the Association of Iowa Hospitals and Health Systems, estimated that Des Moines-area hospitals are paying one third of what they did before disbanding their metropolitan association in 1996 and transferring advocacy and data collection functions to the state association.
Often, state associations have successfully assumed advocacy and networking functions that used to be performed by metropolitan or regional organizations. In some cases, state associations have established branch offices and councils where members can hash out regional issues.
One example is Milwaukee, where the Wisconsin state association coordinates a council for metropolitan-area providers and employs a vice president for the region. Such steps have strengthened local advocacy since the Hospital Council of Greater Milwaukee ceased operations in 1997, said Mark Knight, former chairman of the defunct group.
The council was disbanded after every hospital in the market joined one of three systems, negating the need for a local association to do group purchasing, Knight said. Additionally, all of the systems operate outside the metropolitan area. "The distinction between state needs and urban needs became less because of the growth of systems," Knight said.
But the trend isn't universal. In New Jersey, urban hospitals created their own organization in 1993 to represent them on issues on which they disagree strongly with nonurban colleagues. A central issue was the state's funding formula for charity care. The 17-member Hospital Alliance of New Jersey maintains a two-person staff and an office in Trenton.
The strategy has succeeded. New Jersey has maintained a funding formula that directs more money to hospitals that provide the most charity care, said Suzanne Ianni, executive director of the alliance.
In Wade's view, local associations will be the most fluid of the association world, since local needs ebb and flow. For example, regional and metropolitan organizations play a major role when there are staffing shortages.
"I think it's going to be hard to find a cookie-cutter (approach)," Wade said.
In Cleveland, officials of the Center for Health Affairs said last week they were still evaluating the impact of the pullout of UHHS and the Sisters of Charity of St. Augustine, which have a total of nine hospitals in the market.
The pullout leaves the Cleveland Clinic Foundation as the center's biggest payer of dues. John Clough, M.D., the clinic's director for health affairs, said the center provides a valuable forum for local hospitals to share concerns and cooperate on public health programs, as well as group purchasing for stand-alone hospitals and data collection.
But he acknowledged that everyone in the market is striving to save money. That includes the Cleveland Clinic, which lost $111.1 million on operations last year.
"We have no plans to leave, but we do evaluate our dues every year," Clough said.