Staffers at the American Medical Association are scrambling to find ways to plug a $20 million budget shortfall at the nation's largest physician trade group.
A source close to the AMA said the group's political agenda in Washington would be unaffected by the monetary crisis. Too many important issues, such as physician antitrust and patient protection, are coming to a head, said the source, who requested anonymity.
The AMA board of trustees has solicited budget-cutting recommendations from all senior executives and department heads and will refer those to the board's finance committee, according to a Feb. 11 memorandum to association staffers from AMA Executive Vice President E. Ratcliffe Anderson, M.D.
The finance committee will begin reviewing those recommendations when it meets in March.
The actions follow a three-day meeting of the AMA's board in Chicago earlier this month during which the 20-member body approved a plan to slash $20 million from its $250 million budget for calendar year 2000.
The board's finance committee first presented the proposed 2000 budget to the AMA's House of Delegates at its interim annual meeting in December in San Diego. That budget was based on financial projections made last September.
However, the board found a $20 million discrepancy between what the organization wants to do and the money it has to pay for it, said the source.
The AMA has reserves of more than $150 million, the source said, although those funds are not earmarked for any specific use. The board must decide if it would prefer to cut costs rather than dip into the reserves, the source said.
The board has not disclosed which programs could be affected or if employees will be laid off as part of any cost-cutting moves.
Anderson's memo was distributed to all 1,200 AMA employees-1,000 in Chicago and 200 in Washington-to quell rumors of the budget shortfall that had been circulating within the organization, the source said.
The AMA's weekly newspaper, the 42-year-old American Medical News, issued a statement aimed at rumors that it could be shutting down operations to save the AMA money. The statement said the paper is among the nation's top 10 medical publications and is making efforts, such as reviewing readership studies, to remain competitive.
In other AMA news, immediate past president Nancy Dickey, M.D., who is also an AMA board member, was elected to the board of SpiderMed.com, a Houston-based company specializing in online management tools for physician offices.
Dickey, who is a professor in the department of family and community medicine at Texas A&M University, said she learned of SpiderMed through its affiliation with the Software Commercialization and Innovation Center adjacent to the university.
Although she is not being paid now, Dickey will receive stock in exchange for her board services when SpiderMed goes public, probably this summer, said Peter Meissner, the company's director of marketing.
Meissner also said SpiderMed is hopeful that Dickey could help open doors to some type of Internet partnership with the AMA.
The AMA, meanwhile, is participating in a "medical empowerment" Internet venture of its own. In a partnership with six other medical organizations, for-profit Medem.com was launched last October to provide physicians with Web sites to communicate with their patients. Medem.com also plans to provide consumers with better health information than the partners believed was available from existing online sources.
Dickey said her only involvement in Medem.com is that she sits on the board that approved the AMA's participation in the site.
"I don't see any conflict of interest," Dickey said.