Launching the APA Practice Organization: Expanding the Power of Psychology

March 10, 2001
Capital Hilton, Washington, D.C.
Russ Newman, Ph.D., J.D.

I, too, would like to welcome you to Washington. Since last year's Conference, some things have changed in the nation's capital. The White House has been returned to the Bushes and the Clintons have relocated to New York, sort of. (SLIDE 1) The 106th Congress has given way to the 107th, but continues to include two psychologists, Ted Strickland from Ohio and Brian Baird from Washington State. Since last year's conference, the New Economy has peaked then faltered, and has been replaced by either the New New Economy or the New Old Economy, depending on who you talk to. A bit closer to home, some important change has occurred also. The Practice Directorate has grown to include the American Psychological Association Practice Organization -- a 501(c)(6) tax exempt, non-profit companion organization, free from various restrictions heretofore limiting the type and amount of advocacy the APA Practice Directorate could do on behalf of practitioners. More about that later. But first, a recap of significant events over this past year.

(SLIDE 2) On the Federal front, professional psychology achieved a major milestone in the final days of the Clinton Administration. After no less than five years of persistent advocacy, we have persuaded the Department of Health and Human Services to publish its proposed rule to make psychology internship training programs eligible for Medicare GME funding. Although accomplished at the regulatory level, rather than legislatively, inclusion in GME was in no small part the result of efforts by Congressman Strickland as well as Congresswoman Thurman of Florida. Importantly, other Members of Congress have helped and contributed to a truly bipartisan effort. They included Senators John Breaux, William Roth, and Arlen Specter as well as Representatives John Dingell, Jim McCrery, and Clay Shaw.

The rule, when final, is projected to bring $200 million to psychology internship training over the next five years. And we are exploring with HCFA the feasibility of including postdoctoral psychology training as well.

(SLIDE 3) Also on the regulatory level, in December, the Clinton Administration published final regulations on medical records privacy as required by the Health Insurance Portability and Accountability Act of 1996 or HIPAA, something I will talk more about later. Owing to advocacy done by psychology, the rule effectively distinguishes psychotherapy notes from other types of records and requires separate patient authorization for their release to insurers. While the definition of psychotherapy notes was narrower than we had hoped, the separate and increased protection for mental health records prohibits an insurer or managed care company from conditioning coverage on patient authorization for disclosure of psychotherapy notes. But as you may already know, in this two party town, one party's definition of a "final" rule is not necessarily the other's. The Bush Administration has just recently reopened the final rule for another 30 day round of comments. Apparently, when current Secretary Tommy Thompson heard that former Secretary Shalala received 50,000 comment letters during the review period previously, Secretary Thompson decided he wanted some mail too. We will keep you posted.

(SLIDE 4) Last, but certainly not least, at the Federal level, patient protection legislation made slow but steady progress in Congress. Both the House and the Senate are now considering bills which include "right to sue language" initially crafted and long fought for by the Directorate. And efforts to exclude "mental injury" as a recognized source of recovery seem all but dead. To understand the importance of including the right to sue language in any resulting patient protection law, one needs only to observe the aggressiveness with which the managed care industry is fighting against it. In fact, many on Wall Street are providing two separate projections for the future financial "health" of the managed care industry -- one based on a patient protection law with right to sue language and one without. The progress made with patient protection could not have occurred without the help of all of you and your organizations both at the federal level and with states patient protection activity. Our work is far from over, but for what has been accomplished so far, I thank you.

(SLIDE 5) On the state level much has happened over the past year. Our test case litigation agenda has witnessed significant progress in 2000. Two cases have settled and a third has completed full-blown discovery and is proceeding towards trial. Both the California Psychological Association versus AETNA-US Healthcare of California and the New Jersey Psychological Association versus MCC/CIGNA -- the first test case filed back in 1996 -- achieved successful settlements. I would encourage you to talk to the representatives from CPA and NJPA to hear more of the details of those victories. While we also are active in Florida and Tennessee, the most intense fighting is now occurring in the case of Virginia Academy of Clinical Psychologists v. Blue Cross/Blue Shield of the National Capital Area. This lawsuit, you will recall, alleges a unilateral rate reduction by Blue Cross Blue Shield intended to eliminate providers from its panel, despite the company having promoted itself to prospective subscribers as having a "large, stable panel of providers." Having recently completed discovery, we believe the evidence supports our theories in the case and we are confident the case will withstand the other side's motion for summary judgement currently before the court. We expect the case, then, to go to trial as early as this summer. Although, as everyone knows, the outcome of a trial is somewhat hard to predict, we believe this case is strong, and is among the best examples we've seen of a managed care company making profit-motivated decisions while ignoring the negative effect of these decisions on services to patients. I want to thank not only those of you here fighting these battles, but those of you who have contributed financially to the test cases. This is resource intensive work and we greatly appreciate your help.

(SLIDE 6) Among the biggest energizers on the state front this past year has been the fast developing prescriptive authority agenda. A growing number of SPAs, including Georgia, Louisiana, Florida, Texas, New Mexico, Connecticut, Hawaii, Alaska, Illinois and Tennessee spent much of 2000 getting their legislative ducks in a row to introduce prescriptive authority bills. As of today, eight bills have already been filed, with at least another expected shortly.

And in what appeared to be a first in securing public support for psychology's RxP effort, the New Mexico Alliance for the Mentally Ill voted to support the New Mexico Psychological Association bill which has now passed out of two House Committee's in the State legislature and is literally on the floor of the full House as I speak. I should add that, unfortunately, national pressure has since caused the Alliance to rescind its support. Sooner or later one or more of these states will join Guam by passing a prescriptive authority law. It goes without saying that we hope to make it sooner, rather than later.

(SLIDE 7) Other state and provincial level legislative efforts of note include four new health plan liability laws in Arizona, Maine, Oklahoma and Washington State; six comprehensive patient bill of rights laws in Alaska, Arizona, Kentucky, Maine, Massachusetts, and Washington State; six additional parity laws in Alabama, New Mexico, Utah, Kentucky, Massachusetts and South Carolina; six new prompt payment laws in Arizona, Kansas, Kentucky, Massachusetts, New Hampshire and New Mexico; a Vermont medical loss ratio disclosure law; and in the Canadian provinces, psychology is close to an agreement that will allow complete mobility throughout Canada, without compromising local, provincial and territorial statutes and regulations.

Much more than legislative activity has taken place at the state level to benefit psychology. The Disaster Response Network -- a well-established collaboration between APA, the SPAs and the American Red Cross -- has continued to be active. In 2000, the DRN responded to a tornado in Alabama; shootings at Edgewater Technologies in Massachusetts; a Colorado plane crash which killed student athletes; fires in Los Alamos, New Mexico; the recent earthquake in Washington State; and most recently, the school shootings in Santee, California.

(SLIDE 8) Relatively new on the state scene this past year was a number of SPAs establishing Psychologically Healthy Workplace Award programs intended to recognize employers who value psychological health and, importantly, intended also to help educate businesses about the value of psychological services. Taking the lead of the New Jersey Psychological Association, and facilitated by the Business of Practice Network, Vermont, Massachusetts, Connecticut and Arkansas (in addition to New Jersey) gave awards in 2000. All are planning to continue the program in 2001 and first time awards will be given by Minnesota, Kentucky, Virginia, California and Texas. Through the Business of Practice Network we eventually hope to see awards given in every state, and state winners will then compete at the national level for an APA Psychologically Healthy Workplace Award.

(SLIDE 9) This ongoing program will also have the benefit of converging with the workplace stress component of our now five year old "Talk to Someone Who Can Help" public education campaign. Recently completed public opinion survey research has indicated that workplace stress is an even more salient public issue than when we launched the campaign in 1996. As a result, we are looking to find a strategic media partner to help heighten the visibility and sharpen the focus of this issue, much as we did with MTV for the warning signs of school violence.

And speaking of Warning Signs, almost two years from its beginning, this component of the public education campaign continues going strong. In this year alone, 419 forums have been conducted in schools and communities around the country, with over 35,000 teens and 15,000 adults attending. An additional 30 forums specifically for parents attracted an additional 1200 adults. This brings the total number of forums to well over 1,000, in which close to 125,000 people have participated in the face to face facilitated discussions with our member psychologists. Participation in the public education campaign in general continues to be very widespread with 58 states, territories, and provinces engaged in some public education campaign activity.

(SLIDE 10) You will be interested to know that in 1996, our public opinion survey research in advance of the Talk to Someone Who Can Help Campaign indicated that 84% of respondents believed that good psychological health plays an important role in maintaining good physical health. Today, some five years and literally millions of "media impressions" later, our recent survey found 97% of respondents recognizing the importance of good psychological health in maintaining good physical health.

While public opinion alone does not always cause change to occur, we know that it can be a significant catalyst. Serious legislative proposals for managed care reform, for example, did not occur until the public began to recognize managed care's adverse affects on the quality of healthcare. It was not until the public had sufficient experience with managed care that public attitude moved away from a positive attitude based on out-of-pocket savings toward a focus on adverse consequences for patient care. This resulted, first, in legal bans on "drive-thru" deliveries and "gag" clauses and then, eventually, in the comprehensive patient protection proposals now before Congress.

The importance of influencing public opinion to accomplish healthcare change seems to us in psychology today to be a given. But it has not always been so. In fact, historically the profession of psychology has been rather insular, introspective, and internally focused rather than looking outward. I recall one of the very early tasks of the newly created 1986 Office of Professional Practice. Much work at the time was done to refocus the practice community to look outward and to realize that what we did in the therapy and consulting rooms was significantly influenced by what went on in the Congress, legislatures, the courts and in the public at large. This then set the stage for the development of the Directorate's legislative advocacy, judicial advocacy and public education agendas.

Similarly in the mid 1990's, after the demise of legislated healthcare reform and the rise of market-driven reform, we began to appreciate the influence of market forces on the delivery of psychological services. No longer were freedom of choice laws, for example, sufficient to insure that psychologists were able to provide services in the healthcare market. Rather, the level of purchaser demand for our services, the perceived value of psychological services and the extent of psychologists' bargaining power in the marketplace became more significant variables influencing our practice than many state laws. This set the stage for the Practice Directorate's marketplace efforts to put business into practice, to educate the business community about the value of psychological services, and to work to influence those market forces affecting us. Persuading the American Medical Association to create six new behavioral health CPT codes for reimbursement of our services, as the Directorate and Interdivisional Healthcare Coalition have done this past year, is but one example of our efforts to alter the course of the marketplace.

(SLIDE 11) Now, another major set of external forces is beginning to influence what we do in psychology and healthcare. The Internet explosion and the development of new information technologies are poised to have a dramatic impact on healthcare, an industry considered by some to be the most information-intensive sector of the economy. As recently as last month, survey data indicated that close to 1.5 billion e-mails are being sent each day, compared to only 570 million pieces of snail mail. (SLIDE 12) On any given day, about 6% of Internet users seek health information online, or about 5.5 million Americans. And seven of the top ten topics searched are related to mental health and behavioral disorders, according to a Harris Poll. These are but a few examples of many indices that the Internet is becoming a major force in our lives. We must now prepare ourselves to deal with these technology forces and their impact on the practice of psychology, just as we have needed to deal with the impact of legislative and market forces on our practices.

Those of you who attended the Directorate's Town Hall meeting at the Convention here in Washington heard me talk about the convergence between the developing Internet culture and the traditional culture. Those of you who did not attend the Town Hall meeting, have hopefully had a chance to read the electronic communication we sent just prior to SLC. I believe this convergence of the two cultures is setting the stage for what will, over the next decade, be healthcare. Simply put, new ways of communicating will be integrated with old ways. New ways of problem solving will be blended with existing strategies. Hierarchically organized structures will be merged with network organizational forms. New ways of relating and new notions of community will be combined with the old. In fact, the reversal of fortunes of many dotcoms recently is actually evidence of the continuing integration of the old and the new -- it is predicted by some that up to 60% of consumer dotcoms formed between 1997 and 2000 will be dead by 2005. Unlike the explosion of technology companies we've seen in the last few years, experts predict the Internet economy of 2005 will be a network of established businesses whose influence is global and whose names will be old-world -- such as Proctor & Gamble, Chevron, and Coca-Cola -- companies who have successfully built and integrated information technology into their existing infrastructure. This past holiday shopping season, for example, has already been interpreted as evidence that click-and-mortar retailers, with both a strong physical and online presence, will emerge as the dominant players, rather than pure-play dotcom companies.

Today, I want to leave behind the cultural implications of this convergence process and zero in on some specific implications for healthcare. But I do not intend, at this time, to deal more than indirectly with the very complex area of the application of the Internet and new technologies to the actual delivery of psychological services. Suffice it to say, for now, that the salient question related to services is under what conditions, with which services and for what types of problems will certain technologies better enable what we do as psychologists. This is an empirical and experiential question that is just now in the process of being asked and answered. The focus of my remarks today is the implications of the Internet and information technologies for the structure and reform of the healthcare system.

(SLIDE 13) The November/December 2000 issue of the Journal of Health Affairs frames the questions quite well. According to the editor:

"The Internet explosion has inspired an outpouring of predictions that the health sector's long-awaited breakthrough in information is finally at hand. But will network computing really help create order amid the befuddling maze of insurance claims, clinical records, and quality data in which the key to a more efficient system now lies hidden? Or will the ultimately localized, idiosyncratic and fragmented enterprise of care continue to prove resistant to rationalization?"

"Does the new economy require any different vision of health reform," asks Starr. "What are the implications, if any, of the information revolution and digital economy for the principles and mechanics of reform as well as its political feasibility? A great deal of health care commerce is migrating to the Internet. Should the infrastructure of reform also migrate there?"

(SLIDE 14) The impact of information technology on decreasing cost and increasing efficiency in healthcare is an even more complicated issue. We've witnessed efforts in the last 10 years to decrease the cost of healthcare by decreasing utilization through increased administrative activity and, I would add, increased administrative cost. The result has been that we are, still spending more than 14% of our total economy on health, (compared with about 8-10 percent in other countries) with no recognizable improvement in outcome. Administrative costs are two and a half times larger than in any other national system. Few problems have been solved and many others created. Many are certain that market-driven managed healthcare has failed, including Paul Elwood, the founder of managed care. And, according to Standard & Poor's, "Woes in the health care sector are everywhere as an unprecedented number of problems have come crashing down on the industry." While there is growing certainly that managed care's days are numbered, the uncertainty of course, is what will replace managed care?

Shifting the focus of reform away from utilization and service costs towards administrative activity and transaction costs seems to provide an alternative solution. It is also fertile ground for the use of Internet technology since the ability to facilitate transactional activities is one of the Internet's greatest strengths. (SLIDE 15) Jim Clark certainly believed this when he founded Healtheon with the expectation that he could take $400 billion of waste out of healthcare with the use of Internet technology to streamline the transactional aspects of the healthcare system. But what Clark didn't realize, and perhaps Newt Gingrich said best, was that "…each of those dollars was loved by somebody who didn't want to give it up." The result has been that the promise of increased efficiency through the Internet may be great, but the reality so far has been disappointing and slow to materialize. Nonetheless, the rise of the Internet has created powerful new tools for automating administrative and financial processes in healthcare and health insurance.

The most influential driver of e-health, according to some, is an increasingly frustrated consumer who now uses the Internet to acquire information to help manage his or her own health, and even to manage his or her healthcare benefits as I will discuss shortly. By providing patients and their families with health information, decision support, and Web-based tools for navigating the healthcare system, health plans and new e-commerce actors are beginning to influence care patterns without imposing medical-necessity criteria from afar. A number of start-up firms and academic health centers are working to create consensus-care pathways that define best medical practices for patients with particular conditions. Of course, an already complicated system gets even more complicated when mental health conditions are the focus of such procedures. "Best practices," as they are called, in mental health may not be so easy to codify. Yet, we need to recognize that, from the consumers' standpoint, the benefit of the Internet is, above all, a way to empower a previously unempowered consumer in the healthcare treatment process. In fact, my experience with consumer advocacy organizations recently convinces me that the Internet embodies a fast-growing consumer movement in healthcare, the likes of which we've not previously seen.

(SLIDE 16) The influence of Internet technology on healthcare will also converge with related health policy developments. Consider the following possible combination of technology and health policy. Because employers have, for some time now, desperately wanted to step out of their current role as third-party payers, many analysts believe that health coverage will follow pension benefits towards a 401(k) model of "defined contributions." In this model, the employer provides the employee funds for healthcare benefits, but the employee structures and manages the benefits. It is thought (or hoped) that individuals will spend their own money more carefully then they will spend their employer's money. Removing the employer from the health plan selection process also is seen as clarifying that the health plan's customer is the subscriber and family, not the employer.

If a defined contributions approach to healthcare begins to catch on, using Internet technology to "mass customize" health coverage for employees may not be far behind. One such Internet health enterprise -- Vivius -- is banking on this. Vivius proposes to work with employers who chose a defined-contributions approach to health benefits to help make health coverage available to their employees. Rather then relying on a health plan to package the care system or negotiate rates with providers, Vivius provides an employee with a customized Web page that enables the employee to create his or her own health network by choosing a physician, a psychologist or a hospital from a complete menu of providers. Vivius functions as a "virtual healthcare exchange," or auction site, bringing providers and patients together based on competitively bid capitation rates. There is no claims management and providers set their own capitated rate for individual subscribers. Consumers can compare the aggregated cost of the network they select with the employer-provided contribution to determine how much they will need to pay out of pocket each month and the size of the annual maximum employee contribution. And care above this maximum amount is expected to be insured by a "wraparound," catastrophic-type, indemnity insurance product.

Some say a system such as this will be the final nail in the managed care industry's coffin since there will be no need for "middlemen" managers of healthcare services. And the potential exists to create an artificial healthcare market which corrects for at least some of the problems in the actual market which prevent healthcare services from responding to market forces as Adam Smith would predict, corrections that perhaps create a chance for good quality services at a reasonable cost. (SLIDE 17) Yet, considerable practical barriers to a defined-contributions approach remain. For example, if the contribution is determined by the IRS to be taxable income to the employee, the value of the benefits to the employee will be decreased. Additionally, human nature and buying behavior are likely to disincent preventative care since employees who are not ill or in distress may choose not to spend their money on healthcare services for which they see no immediate need. And accomplishing a transition to a defined contributions approach during the tightest labor market in decades will, to say the least, not be easy.

(SLIDE 18) Practical barriers to the easy adoption of new information technologies also exist. Indeed there are skeptics who insist that, contrary to the claims of its well-financed promoters, the Internet will not solve the administrative redundancies, economic inefficiencies, or quality problems in our healthcare system. These problems are seen as the result of long standing, ingrained characteristics. These characteristics include, first, economic, organizational, legal, regulatory and cultural conflicts rooted in a healthcare system grown from hybrid public and private financing; second, these problems are the result of cultural expectations of unlimited access to unlimited healthcare resources; and third, the use of third-party payers who are rewarded for constraining those expectations has created problems of its own. Some believe that the revolution of healthcare information access for consumers via the Internet will actually exacerbate the cost and utilization problems in the system, not solve them. One commentator describes the new generation of Internet and information technology as "vaporwave," owing to its as of yet unfulfilled promise in solving problems in the healthcare system. There is also much skepticism that efficiency enhancing technology can succeed in the face of the insurance industry's resistance to increasing efficiency. According to J.D. Kleinke, "In the language of the insurance business, the 'float' rules…If the process of claims adjudication is haunted by a computing, contract and analytic nightmare, this nightmare is good business for health plans that make money sitting on money." Proponents of the use of information technologies to remedy the ills of the healthcare system acknowledge that benefits have been slow in coming. The full benefit of these developments, they believe, hinges partly on supporting public policy not yet completely developed. The absence of shared standards for data communication has long limited the ability to realize savings in transaction costs. It is hoped that once the regulatory standards are promulgated to implement the Health Insurance Portability and Accountability Act (HIPAA), electronic data storage and dissemination will be more readily facilitated.

(SLIDE 19) You will recall this law, sponsored by Senators Kennedy and Kassebaum, as one that extended the portability of employer-paid health insurance, restricted the use of pre-existing conditions, and created a demonstration project to test the effectiveness of Medical Savings Accounts. In addition, the Administrative Simplification provisions of HIPAA direct the Secretary of HHS to begin the process of adopting standards for electronically transmitting health information, standards for securing that information and standards for protecting the privacy of the individuals to whom that information refers. When the rules are complete, it is believed that the health industry will have a uniform set of standards for electronic data transmission that are hoped to enable any entity to electronically communicate with any other entity. Yet, the rules to implement the Administrative Simplification provisions are anything but simple, and the process of "simplifying" healthcare transactions is far from settled.

The only rules completed so far are those establishing the standards for administrative transactions, such as third party claims processes, and they will not be enforced until August 2002. But this first set of HIPAA rules will require an intensive response by the healthcare industry in order to come into compliance. Health plans, insurance companies and other payers will have to modify their systems to receive these standardized transactions. Providers, including psychologists, will be required to use the standardized transactions only when they submit electronic claims, right now a voluntary process for the most part. It is anticipated, however, that over time, more and more payers will move to electronic claims submission. Eventually, providers will have little choice but to rely on electronic claims and to use the standardized transactions that follow from HIPAA.

True acceptance of this type of information technology for transactional activity will also require that sufficient privacy and security protections be in place. The proposed privacy rule I mentioned earlier is part of this effort to protect electronic communication in healthcare. Security rules have not been issued, even in their proposed form. The Practice Directorate is closely monitoring the development of these HIPAA rules and as they begin to take shape in the coming months, we will be working with all of you to facilitate the practice community's ability to be "HIPAA compliant," as they say.

(SLIDE 20) Before moving to my final area this afternoon -- our newly created organization -- I want to underscore the central point of my prior remarks about the Internet and information technology. Whether the application of technology to healthcare will replace managed care by the creation of a healthcare exchange, or whether it will effectively enhance efficiency in a heretofore fragmented system by establishing uniform data transmission, or whether it will enable practitioners to submit claims electronically and get paid quickly are not the most important points to be made. The important point to me made is that new technologies will significantly influence how we practice healthcare and how we practice psychology.

As with health policies developed through legislation, regulation, and the courts, and like the reality of market forces, we cannot ignore the Internet and developing information technologies. We cannot shut the therapy room door and hope our real world practice of relating to patients goes undisturbed by developments in the virtual world. We must monitor the developing technologies. We must learn to deal with the developing technologies. We must use the developing technologies to our best advantage. And, most of all, we must influence the development and application of those technologies as they become integrated into the healthcare system. While there is little by way of future of the healthcare system that I would try to predict, I would be so bold to say that in as few as five years, the term "e-health" will have disappeared from our lexicon. This is not to say that electronic communication will have disappeared from healthcare but, rather, we will simply be speaking once again of healthcare where information technologies are an accepted and integral part of what we do.

It is in this context of changing health policy, shifting market forces and developing information technologies that the APA Practice Organization -- a 501(c)(6) tax-exempt companion to the 501 (c)(3) American Psychological Association -- was created. You will recall that the purpose of the companion organization is to enable the Practice Directorate to do advocacy on behalf of practitioners without the restrictions that the IRS places on 501(c)(3) organizations. The APA Practice Organization is not limited in the amount of statutorily defined lobbying we can do. It is not limited in the amount of advocacy, marketing and promotion we can do for practitioner interests. And the Practice Organization is not limited in the support we can give to other 501(c)(6) organizations, such as state psychological associations.

Of course, while we may not have legal restrictions in these activities, we do continue to be challenged by resource limitations. Funding for the activities of the Practice Organization is provided by the Special Assessment paid by licensed psychologists, which continues to support those advocacy and marketing activities for which the Special Assessment was originally created. I should also remind you that since the 501(c)(3) APA is legally foreclosed from providing uncompensated resources to the (c)(6) companion organization, we cannot look to the c(3) for additional resources to fund c(6) activities. The Practice Directorate does, however, continue to receive its fair share of the APA general dues revenues to fund the various c(3) activities in which we continue to engage.

(SLIDE 21) The realities of resources having been said, the foundation of the APA Practice Organization continues to be the legislative, legal, marketplace and public education agendas you have worked with us to build over the life of the Practice Directorate. We do believe, however, that we are now in a position to enhance the effectiveness and efficiency of our ongoing agendas with the use of some of the same information technology currently being integrated into the healthcare arena. And I would like to underscore that just as the application of new technology to the healthcare system is an adjunct to, not a replacement for, the current system, we see the use of the Internet and information technologies as an important adjunct to the work of the APA Practice Organization.

(SLIDE 22) Internally in the Practice Directorate, we are building an infrastructure for the companion organization that combines information technologies with network organizational structures to increase our efficiency, our flexibility and, ultimately, our productivity. Those of you who attended the State Leadership Conference in 1999 may recall our discussion on the societal shift toward flattened, network organizational structures and away from stovepipe, hierarchical organizations. In a network organizational form, according to one expert:

Transactions occur neither through discrete exchanges nor by administrative fiat, but through networks of individuals engaged in reciprocal, preferential, mutually supportive actions…The basic assumption of network relationships is that one party is dependent on resources controlled by another and that there are gains to be had by pooling resources. In essence, the parties to a network agree to forgo the right to pursue their own interests at the expense of others."

(SLIDE 23) But the newest excitement in the Directorate involves the use of the Internet to offer practitioners some Web-based services that we have not previously been able to provide. To better understand what you need and want, we have begun a rather extensive process of research in which I suspect many of you have already participated. As one component of this research, we conducted an online poll of more than 1,500 special assessment payers to better understand how you are using information technology and in what ways it might be used to better support a psychologist's practice. Among top line results we found 98% of you use e-mail; 83% have computer capability both at home and at work; 72% had access to the Internet at home and at work; 29% indicated they already use some type of practice management software to support their practices; 13% submit claims electronically; and 15% have personal websites. Interestingly, we found that, overall, new practitioners and those practitioners with 21+ years of experience have adopted the Internet at about the same rates.

More to the point, an analysis of all the data collected revealed two clearly identifiable general categories of interest: practice management tools and practice enhancement aids. These categories also appear prominent in telephone survey data with SPPA executive directors, a survey that is still in process, however. Practice management -- those activities related to the administrative process and support of a psychological practice -- was an area generally seen by respondents as ripe for the use of new technologies, particularly where financial transactions were concerned. Also, participants expressed an expectation for APA to take the lead on regulatory compliance aids, such as in meeting the HIPAA requirements I talked about a few minutes ago. Practice enhancement -- those activities related to support and development of actual psychological work -- was also viewed as an area where the Internet in particular would be valuable. Interestingly, use of the Internet for referral purposes -- a concept quite consistent with the Internet's connectivity strengths -- received little interest, particularly when it was not done at the local level. By and large, practitioners remain somewhat skeptical that referral services are effective. Perhaps this is understandable when we look to our recent public opinion survey, which found that people relied primarily on family physicians and friends for referrals to a mental health professional. In any event, we will continue to refine and focus our research in these areas. No doubt, many of you will be involved with beta testing of some specific products and services when we get to that point, and we will be talking with you further about our eventual results and directions. At this point, we are in the process of drafting the technical blueprint necessary to build a Web-based portal for the Practice Organization to create the infrastructure necessary to provide an array of very practical tools for practitioners via the Internet. Not coincidentally, it will allow us to conduct c(6) activities on the Internet, such as discussion of those c(6) advocacy topics that we are not legally permitted to do through the APA website.

(SLIDE 24) While we are excited about the addition of new 21st century technologies to the Directorate through the APA Practice Organization, we are equally excited about the addition of some age-old traditional activities that we have previously been prohibited from doing. I am referring to activities related to political giving, campaign finance, and PACs, those activities that 501(c)(3) organizations are strictly prohibited from even talking about, but for which there are no legal restrictions on a 501(c)(6) organization like the Practice Organization.

This is literally the first time in the history of the Practice Directorate that I or any of the Directorate's staff can openly stand before you and talk about the role that political giving plays in this country's legislative process. It is the first time that I can publicly even mention PLAN -- Psychologists for Legislative Action Now -- the PAC of the Association for the Advancement of Psychology; it is the first time I can refer to WPLA, Women in Psychology for Legislative Action; it is the first time I can mention state PACs. And it is the first time that we can include AAP membership materials in your SLC packet. More about these issues in a minute.

But let me start with some basics. The basic rules that govern the participation of interest groups in election related activity are codified in the Federal Election Campaign Act of 1974, its subsequent amendments, and its associated regulatory decisions and court rulings. The law allows all kinds of organizations to create voluntary political institutions, popularly called political action committees, or PACs, to raise funds from group members and contribute to them to candidates for federal office. Corporations, unions and membership groups can use their corporate profits, union dues, or membership fees to pay for their PAC's overhead. Ideological and issue-oriented PACs that do not have organizational sponsors, sometimes referred to as "non-connected" PACs, do not enjoy this benefit and must finance their operations with the funds they collect from their contributors. The major advantage of a non-connected PAC, however, is that they can solicit contributions from anybody, while the other type of PAC can only ask the members of its parent organization for money.

PAC contributions are limited to $5,000 per federal candidate for each election in which the candidate participates (primaries, general elections and run-offs are all considered as separate elections). Larger contributions can be accomplished, however, through the process of "bundling," which is the collection of checks from individual members but physically presented to the candidate by the PAC. PAC contributions should be distinguished from so called "soft money" contributions which are currently the focus of the McCain-Feingold campaign finance reform bill being considered by Congress. "Soft money" is raised and spent outside of the Federal Election Campaign Act's regulatory framework, but in ways that can influence federal elections nonetheless. This "soft money," which has no limit, can be spent on political communications as long as they do not expressly advocate the election or defeat of a specific candidate. Unions, corporations, trade associations and other groups can mount "soft money" television, radio, direct mail and telemarketing campaigns to distribute information about the positions of federal candidates on issues in ways that can help or harm the candidates' ability to be elected even though the message does not focus on a specific candidate. For example, during the 1996 elections, the AFL-CIO spent $35 million on television and radio ads to make the case that Republican Members of Congress had tried to cut spending on Medicare, education and environmental protections in order to pay for a tax cut for the wealthy.

After PACs were codified in public law, and the law amended to allow sponsoring groups to pay the overhead, the number skyrocketed from 608 at the end of 1974 to over 4,000 by 1984, and over 4,500 by 1996. By 1996, PACs provided nearly 40% of all funds raised by House incumbents in contested elections and 22% of all Senate incumbents' funds. These figures begin to tell the real story -- PAC dollars provide a significant amount of campaign dollars, and without sufficient campaign dollars, any Member of Congress or would-be-Member has little hope of being elected to office. And if PAC money isn't already influential enough, this "hard money" PAC activity will become all the more important for candidates if the proposed prohibitions on "soft money" become law.

Because of a candidate's reliance on PAC funding to support and finance campaigns, interest groups -- like psychology -- who make political contributions are, in turn, provided with access to Members of Congress, relevant Committee chairs and to the Congressional leadership. And as important as campaign funding is to any candidate for Congressional office, access is similarly important to interest groups like us. We need access to the right people to introduce our issues; we need access to explain our issues; and we need access to secure congressional support for our issues. It may be fair to say that the more difficult and complicated the issue, the more access an interest group needs. If this is the case, I don't really need to tell you that psychology needs a lot of access.

And we are not the only interest group trying to get access. According to data kept by the FEC, of the over 2,700 listed federal PACs, psychology ranks 468th with about $196,000 in contributions in 1999-2000. Compare this with the American Medical Association whose $2.7 million in contributions ranks it 19th. Perhaps you think the AMA's almost 300,000 members make it a bad comparison to psychology's 90,000 or so full members. Let's try some other comparisons. The American Speech-Language-Hearing Association with 100,000 members contributed over $300,000 and ranked 310th; the American Occupational Therapy Association with 70,000 members contributed $335,000 and ranked 283rd; and the Physical Therapists with 65,000 members contributed over $500,000 and ranked 204th. Even relative to these more comparable organizations, we clearly have our work cut out for us.

Before I close, I want to focus for a minute on the relatively unique problem which confronts AAP/PLAN. Unlike WPLA, for example, which is in and of itself a PAC and can solicit contributions from anyone, AAP itself is not a PAC -- it is a membership organization created for the purpose of establishing a PAC, known as PLAN. As you will no doubt recall from what I said a few minutes ago, this means AAP is legally permitted to solicit contributions for PLAN from only AAP members. Despite the number of psychologists in this country -- 90,000 or so full members of APA, about half of which are licensed health service providers of one type or another -- there are only 2,700 members of AAP. That means, of course, only a very small number of psychologists are even eligible to make a contribution to the PAC. And, by the way, you might be interested to know that only about a third of AAP members have made actual contributions to the PAC, since membership alone doesn't automatically guarantee a contribution into the PAC. This is a mere 900 psychologists responsible for $196,000 in contributions. A very small number of psychologists are carrying the entire load for the profession -- not a new phenomenon, but a disheartening one and one we very much need to work together to fix. As leaders in psychology, it is up to all of us to take some leadership in this area.

One step towards solving this problem is, of course, increasing the membership of AAP. While I realize that the current obstacles and economics of the healthcare system make it difficult for practitioners to join yet another organization, without greater participation on the political action front by psychologists, it will be that much more difficult to remove those obstacles and improve the economic circumstances of our profession. I would invite you to put your collective heads together with Steve Pfeiffer, Executive Director of AAP and Jerry Clark, the Chair of AAP who are here at the conference to find some creative solutions to this problem.

To begin our part, the Practice Organization has commissioned a study of the practice community's perceptions, attitudes, and behavior related to political giving activities. We expect that data from this study will ultimately help us build the widespread support needed from our community to mount the necessary political action arm to accompany the very well organized advocacy efforts that have been developed over the years. You will be hearing some preliminary results of this study later in the conference.

So here we stand at the start of a new millennium and the launch of the APA Practice Organization – not so much the start of something new, as it is our evolution to the next chapter. The task before us continues to grow increasingly challenging and complex. We must grapple with changing healthcare policy, fickle and volatile market forces, and, most recently, the introduction of new information technology that may or may not prove helpful, depending on how we use it.

I believe, though, psychology is up for the challenge. We have built an incredibly strong collective effort over the years to work the practice agenda -- you and your organizations have been critical and instrumental in that. And now we have added another component to the effort in the form of the Practice Organization. By integrating this piece with our existing structures, we expect to bring more force to bear on the agenda, to better focus our energies, to create a more connected practice community, and, above all, to expand the power of psychology.

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