Hartford Business Journal

14 Hartford Business Journal • August 3, 2015 www.HartfordBusiness.com from page 1 groups that might oppose them." Although the eventual disbanding of Con- necticut's medical societies is possible, the main concern of physician leaders is doctors' waning influence on Connecticut legislation and regula- tion, weakening the voice of physicians in the healthcare industry and leaving hospitals and insurance companies to shape how medicine is practiced in the state. Although medical societ- ies are trying to boost membership — or halt the slow decline — by educating doctors on the ben- efits, the main issue of consolidation among pri- vate practices shows no signs of slowing down. "When doctors consolidate and join these hospitals and large groups, they mistakenly feel that the hospitals or the large groups are going to be the voice for them," said Dr. Timothy Chartier, a Farmington private practice derma- tologist, secretary of the CSMS, and past presi- dent of the Hartford County Medical Associa- tion. "The goals of the hospital are not always aligned with the goals of the doctors or even the goals of patients, I hate to say." The Connecticut Hospital Association declined to comment for this story. Declining political capital The medical societies' legislative influ- ence already is slipping, Chartier said. He points to one example in 2014, when the General Assembly voted to allow advanced practice registered nurses (APRNs) to set up their own medical offices. The move was favored by insurance companies because APRNs offer lower-cost alternatives to doctors, but the medical societies opposed it because APRNs don't go through as rigorous train- ing to obtain their degrees. "That is one time where we came up short," Chartier said. "Now patients think they are seeing doctors when they are just seeing APRNs, which impacts the quality of care patients are getting across the state." Every member of a county medical soci- ety is a member of the state medical society, and vice versa, so the 6,000 CSMS members represent the totality of doctors in medical societies around the state. There are 10,000 certified doctors in Connecticut. "If the memberships fall below critical lev- els … you can't go lobby at the State Capitol and say you have 1,000 members out of 10,000 doctors in the state," Jacobs said. "No one is going to listen." While the CSMS lost 8 percent of its mem- bership this year alone, the Hartford County Medical Association (HCMA) has seen an even worse decline, Chartier said. It has lost 43 percent of its members since 2007, and now has only 1,200 doctors within its ranks. "All the county societies statewide have had a progressive drop in membership," Chartier said. While administrators of the New Haven County and Fairfield County medical asso- ciations declined to comment for this story, their nonprofit financial filings show they're losing money. Both New Haven and Fairfield — along with Hartford — posted negative margins in 2013, the last year data was available, according to the 990 forms each filed with the U.S. Internal Revenue Service. Combined between the three associations, they lost $107,276 in 2013. While factors like the rise in the cost of practicing medicine and a more disengaged next generation of doctors are contributing to the membership falloff, Chartier said the main culprit is private-practice consolidation. Medical society memberships cost $1,000 annually, so hospitals and large physician groups, which have faced tight margins of their own in recent years, are reluctant to outright buy memberships for all their doc- tors, Chartier said. Some hospitals or large groups will pro- vide doctors a stipend to join whatever indus- try associations they choose, Chartier said, but doctors have myriad options: They can join the state medical society, a national one, a group related to their specialty like cardi- ologists or simply pocket the cash. Consolidation will also continue to be a major trend in health care, driven in part by the Affordable Care Act, which makes it more expensive for doctors to practice medicine on their own and puts more requirements on doctor's time, such as requiring the use of electronic medical records. In October, Grove Hill Medical Centers and Connecticut Multispecialty Group announced they would merge to form the largest physi- cian-owned medical practice in central Con- necticut, with more than 250 doctors across 26 locations. It's not just doctors that are joining larger organizations either, as hospitals and insurers are consolidating too. In July, the parent compa- ny of Lawrence + Memorial Hospital announced it would be joining the Yale New Haven Health System, while Bloomfield insurer Cigna announced it would be acquired by Indianapolis insurer Anthem in a $48 billion deal. The growing power of hospitals, insurers and large doctors' groups will continue to erode medical societies' memberships, Jacobs said, because as the big companies make the healthcare industry more favorable to them, doctors in private practices will be time-con- strained and under financial pressure to join up with larger organizations. "It is a destructive cycle we are in," Jacobs said. Tapping reserves The county and state medical societies each have significant endowments — built up from decades of selling products to their mem- bers — that could help them perpetuate their existence, even as membership dues decline. The CSMS had $2.2 million at the end of 2013 while Hartford had $1.1 million, Fairfield had $836,166 and New Haven had $485,816. "The endowment funds could be raided, but with membership slipping away, that only delays the inevitable," Jacobs said. "I hate to see it all go down the tubes. Everyone was shocked when they saw the membership numbers this year." To combat their declining ranks, county and state medical societies are focused on educating doctors on membership benefits. The societies also are listening to non-member doctors' needs, so the organizations can better accommodate physicians, Chartier said. "Unless we get together and speak with a unified voice — a strong voice — then we are going to lose our ability to influence how medi- cine is practiced in Connecticut," Chartier said. "That is going to have a snowball effect on physi- cians because they think they will have to con- solidate, which will lead to them dropping out of the medical society." n Medical societies try to slow decline Medical Society Financials 2013 (%Change 2013 (%Change 2013 (%Change Organization Revenue from 2012) Margin from 2012) Net Assets from 2012) Connecticut State MS $3,224,346 (19%) $368,499 (5440%) $2,224,650 (17%) Hartford County MS $447,386 (-5%) (-$21,180) (-148%) $1,131,133 (4%) New Haven County MS $307,773 (-6%) (-$41,539) (-142%) $485,816 (-8%) Fairfield County MS $677,197 (25%) (-$44,557) (-606%) $836,166 (-5%) S O U R C E : G U I D E S T A R , 1 0 9 9 F O R M S Order today and get 20% off! Subscribe online: www.HartfordBusiness.com/hbjdelivers or call: 845-267-3008 and provide discount code HH15DB Offer expires 8/31/15 Delivering Business. When you need information to grow your business, we deliver! Subscribe today to receive weekly issues in print and digital, plus special publications and full online access! G r e at e r H a r t f o r d ' s B u s i n e s s n e w s w w w. H a r t f o rd B u s i n e s s . c o m for more B2B news visit March 31, 2014 Volume 22, number 19 $3.00 subscribe online June 5, 2014 Only 10 weeks until C T B E x p o . c o m Index ■ Reporter's Notebook: PG. 5 ■ Week in Review: PG. 6 ■ The List: PG. 10 ■ Deal Watch: PG. 11 ■ Nonprofit Notebook: PG. 19 ■ Opinion & Commentary: PG. 20 Faces oF Business Main Street Mainstay Manchester's Bray Jewelers has survived for almost 100 years. Read about the family business' secrets to success and what makes customers keep coming back. PG. 3 Focus: economic DeveloPment Social Entrepreneurship Hartford business accelerator aims to nurture socially conscious businesses. PG. 8 Music copyright lawsuits cost restaurants unexpected thousands By Matt Pilon mpilon@HartfordBusiness.com A few years ago, nine songs were played inside Shelton's Vazzy's Cucina restaurant that ended up costing owners John Vazzano and Vincent L. Noce $18,000. That's because an agent of licensing giant Broadcast Music Inc., which represents the artists who owned the tracks, attested to being present when the tunes were played and sued Vazzano and Noce for copyright infringement, claiming the restaurant's music qualified as a public per- formance. Under federal copyright law, that meant the restaurant had to pay for the rights to play the songs, BMI said. Vazzano said he thinks a private party actually played the tunes. Broadcast Music Inc. • Founded in 1939 • Represents more than 600,000 songwriters and publishers with more than 8.5 million songs. • Distributed 85 cents of every dollar in licensing revenue in royalties — that amounted to $814 million in fiscal 2013. By Gregory Seay gseay@HartfordBusiness.com B y late May, the Corporation For Independent Living (CIL) expects to have in its hands title to the derelict Capewell Horse- nails factory in Hartford's South End in a bid to convert the idle eyesore into 72 apartments and an adjacent parcel into 24 affordable townhomes. If it does, it will open another fruit- ful chapter for a South End nonprofit that has leveraged — and exported — its talent as a group-home developer to shelter a diverse swath of central Connecticut's population. It, too, will be one of the final swan songs before the yearend retirement of its first and only chief executive. Since its launch in 1979 to finance, build, lease out — then ultimately give away — supportive shelter for thou- sands of the state's physically and mentally disabled, CIL has invested $458 million to construct or convert 2,205 dwelling units into shelter for 7,200 residents in Connecticut and Massachusetts. For at least a dozen years, CIL has applied that same skill set to its expand- ing for-profit realty development opera- tions that include Capewell, and a neigh- boring nonprofit-office-space cluster. In February, CIL announced it bought and will resume work on the $3.34 mil- lion Depot Crossing mixed-use project John Vazzano, owner of Vazzy's Cucina in Shelton, was upset when his restaurant had to pay $18,000 to settle a music copyright lawsuit. P h O t O | P a b l O R O b l e s Continued on page 16 Continued on page 15 Martin "Marty'' Legault, president and CEO, Corporation For Independent Living (CIL) With Legault, developer CIL soars as landlord Sued for a ong Chartier said the increased financial and time- resource constraints of running a private practice are forcing doctors to join large groups or hospitals, which decreases membership in state medical societies. P H O T O | P A B L O R O B L E S

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