Recession Threatens Medical Meeting Attendance: Education Funds Slashed

Article Outline

• Dismal Economic Outlook
• Hospitals Feel the Pinch
• “Pins and Needles”

Before each annual conference the Texas College of Emergency Physicians holds its director, James Coles, will admit to being at least a bit nervous about attendance.

If you hold it, will they come?

This year the nervousness has bloomed into full blown concern before the April 2 beginning of the meeting at San Antonio's Crown Plaza Riverwalk, a luxury hotel within half a mile of the Alamo. It's a concern shared not just by Coles, but many directors of medical organizations who have watched as the economy has fallen into a deeper recession. As everyone tightens budgets, the medical organization directors wonder, how far back will physician groups and institutions reduce, or perhaps even eliminate, their budgets for meeting travel and continuing medical education?

“We're remaining positive about what's going to happen,” Coles said. “But at the same time it's a little scary. I think CME budgets have been cut at a lot of the different groups and hospitals, and I've heard about the same troubles at other state ACEP chapters.”

Days before the meeting Coles said he anticipated about 125 registrations, down from 200 at last year's meeting in The Woodlands, a sprawling suburban enclave north of Houston. Sponsorships at the meeting also have fallen, although not as much as registrations, Coles said. The real difficulties could come next year, when sponsoring companies and groups reevaluate their participation in light of fewer attendees at the 2009 conference.

Although the problem may be more acute at state level organizations at this time, national organizations are also wary of the economic crisis.

As the American College of Emergency Physicians (ACEP) looks ahead to its Scientific Assembly in October it anticipates similar difficulties, although Executive Director Dean Wilkerson, JD, says he remains hopeful that attendance this year will fall within an historical range.

ACEP has had between 3,900 and 4,200 4-day paid registrations at its Scientific Assembly, Wilkerson said. The organization set a record last year with more than 4,500 4-day registrations at its Chicago meeting, besting an all-time record set by the 2004 meeting in San Francisco. This year, for its Boston locale, the organization has targeted 4,100 4-day registrations in its budgetary process for the largest scientific meeting in the world for emergency medicine.

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• Dean Wilkerson, JD

“That would be a strong turnout with which we'd be very pleased,” Wilkerson said. “If we weren't in this bad economy we'd probably budget for 4,300 or more, because our organization's membership has been growing in recent years.”

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Dismal Economic Outlook 

According to the National Bureau of Economic Research, the US economy has been in a recession since December 2007, and despite a mid-March stock market rally there's nothing approaching a consensus view on when the outlook may improve. By the end of March the US jobless rate had climbed to its highest level since 1983 as manufacturing shrank, positioning this recession to become the longest economic downturn since the Great Depression, economists say. US Labor Department data released in late March showed that 7 states, with Michigan the worst at 12%, already had unemployment rates above 10% even as job losses continued across the US.

Laid off employees may lose their medical insurance. Even prior to the recession the percent of US population with employee-sponsored health insurance had been falling, from nearly 64% to about 60% between the year 2000 and 2007. But since then the rate of decline has accelerated, and according to the North Carolina Institute of Medicine, since 2007 the percent of the uninsured population in the US has grown by 13.7%.

These declines have led to roughly corresponding increases in Medicaid patients, and in many states Medicaid spending is the fastest growing portion of state budgets. At the same time, at the end of 2008, just 5 states – Alaska, Montana, North Dakota, Texas and Wyoming – had no budget shortfalls. This has led some states, such as California, to seek cuts in their Medicaid reimbursement rates.

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Hospitals Feel the Pinch 

These economic pressures are now being felt by hospitals, which until recently had been relatively insulated from the fiscal crisis. Even during the economy's dismal fourth quarter of 2008, hospitals grew their employment at a 0.7% rate while, overall, the economy lost 1.1% of its jobs, according to the Department of Labor's Bureau of Labor Statistics.

To gauge the economic crisis' impact on hospitals, the American Hospital Association conducted a Rapid Response Survey in November 2008. At the time, 31% of hospitals reported a “moderate” increase in uncompensated care as a percent of total revenues, and 20% a “significant” increase. And as a result their fortunes had started to turn: In the third quarter of 2007 hospitals reported a net total margin (the difference between total net revenue and total expenses divided by total net revenue) of 6.1%, and in the third quarter of 2008 this margin was -1.6%. Additionally the credit crisis has strained hospital finances by increasing interest costs on variable bonds, increasing collateral requirements, accelerating debts and other measures. Finally, many institutions have lost significant chunks of their endowments because of the precipitous drop in the equities markets, which has had disastrous effects on their non-operating revenues. According to a DATABANK report on 557 hospitals, their total non-operating revenues fell from $396.1 million in the third quarter of 2007 to -$831.5 million in the third quarter of 2008.

In short, entering the year 2009 hospitals have a lot of reasons to look to cut expenses. More than 80% of institutions, according to the American Hospital Association's economic crisis survey of 639 hospitals, have put on hold projects to upgrade or modernize facilities, and 65% have put clinical technology projects on hold. And significantly for the planners of medical meetings, to weather this economic storm, some 59% of hospitals are looking to cut administrative costs, the source where physicians, nurses and other hospital employees might find resources to travel to conferences and obtain CME credits.

Although there is less data for physician groups, it is plain they are also under stress. According to the American Heart Association survey, 56% of hospitals reported “an increase in the degree to which physicians are seeking financial support from hospitals.”

And finally, medical schools are also feeling the pinch. In March the Association of American Medical Colleges reported on results of a survey of chief financial officers which found that teaching hospitals had a 25% loss in operating margins from the third quarter of 2007 to the third quarter of 2008. The survey also found that 50% of institutions were planning hiring freezes and job cuts, or reductions in spending on programs.

So far these reductions don't appear to have had a dramatic effect on meetings conducted by large, national medical organizations.

The American Society of Clinical Oncology has held 2 meetings this year. In January the organization's Gastrointestinal Cancers Symposium in San Francisco had record attendance, said Allen S. Lichter, MD, Chief Executive Officer of the cancer society. In February the organization's Genitourinary Cancers Symposium in Orlando, FL had a small fall off compared to last year.

“Putting the 2 together we are at or a bit ahead of meeting attendance for 2009 compared to 2008,” Dr. Lichter said. “We are over 2 months out from our Annual Meeting and have no solid statistics as of yet. However, the quality of submissions for the scientific sessions is at an extremely high level, and we have had to expand our press program to accommodate all the papers we feel need highlighting. We are confident this will be an outstanding and successful meeting.”

A number of large medical organizations appear to share Dr. Lichter's confidence, but at the same time are also wary of the uncertainties in the economy's future. The short-term outlook may look OK, but what if the recession deepens or persists well into the year 2010?

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“Pins and Needles” 

“From our perspective, everyone's on pins and needles,” said Christine Phelps, Deputy Executive Director of the American Academy of Neurology. “It's an interesting time for everybody. The reason for the unease, of course, is that no one has a crystal ball.”

Phelps' organization has grown its membership and meeting attendance during the last 20 years but was budgeting for a constriction in attendance at its annual meeting in late April and early May at Seattle's convention center. Pre-registrations for the meeting were down 6% compared to last year's meeting in Chicago, Phelps said.

To compensate, the organization is taking steps to reduce costs, such as offering a box lunch in the place of a lavish spread to participants, Phelps said. But one thing the organization does not want to do is cut back on the overall scope of the meeting, she said, or make it less relevant to attendees. The only way to survive during the downturn, she said, is not to look at it from an “oh-my-God” economic standpoint, but rather to look for opportunities.

The current economic environment offers meeting planners the chance to reconsider whether their business-as-usual methods developed during the recent past might not be improved upon.

“We have lived through recessions before, but this feels different,” she said. “So what can we do to remain relevant, to create a product that makes us indispensable to members? We can't rest on our laurels and try to ride out the economic wave. We have to build something for the future.”

Another variable meeting planners must consider for 2009 is changes to a new code of conduct introduced by the Pharmaceutical Research and Manufacturers of America, which took effect in January. The code, adopted in part due to lawsuits and enhanced government scrutiny of the pharmaceutical industry's influence on physician and drug studies, limits the ability of companies to sponsor meals and other activities at medical association meetings. The code is voluntary, not mandatory, but meeting planners say it is having some impact on their sponsorships.

Yet it's probably too early to tell how much of a factor the pharmaceutical code, in comparison with the economy, is having on medical meeting sponsorships, said Howard Brody, MD, Director of the Institute for the Medical Humanities at the University of Texas Medical Branch at Galveston.

“I have only limited anecdotal evidence on this point but the impression I have is both of the above are operating,” said Dr. Brody, author of the book Hooked: Ethics, the Medical Profession, and the Pharmaceutical Industry. “The extent to which the code has real teeth remains to be determined, I think, but the companies are approaching it warily while they see which way the wind is blowing.”

Annual meetings play an important role in the finances of medical organizations. For ACEP, Wilkerson said, memberships make up the largest source of revenues, but meetings and scientific publications come next. For the annual Scientific Assembly, he said, ACEP usually nets more than $1 million after all expenses, a significant portion of which comes from the exhibit hall.

If the economic recession deepens this summer, a 10% or 20% decline in attendance or a substantial decrease in exhibit hall revenue could seriously impact the net proceeds from the large annual meeting, creating a negative impact on ACEP's overall budget.

“It's very important for us over all. It's a major source of revenue for us,” Wilkerson said. “Next year our meeting is in Las Vegas, which historically has been a popular destination for us. So we're hoping we can hold our own in Boston this year, and then knock it out of the park in Las Vegas in 2010.”