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Summary of WDS Bylaw Changes

Provided by Concerned Dentists of Washington State

On November 11, the WDS member dentists overwhelmingly passed a set of bylaw changes to WDS.  Under Article X, Section 1 of the bylaws, the Independent Directors have to approve amendments to certain bylaw provisions.  On December 15, WDS sent a color-coded sheet to summarize those changes accepted by the independent Directors and those that were rejected.  This is a summary of those changes which are now included as WDS bylaws.  CDWS board members are now arranging a meeting with the WDS board to discuss further revisions.

1.    Membership meetings.  Changes APPROVED .  Membership meetings will now play a more prominent role in the WDS governance.  The meetings will occur at a location near the WDS headquarters large enough to accommodate 25% of the member dentists.  Notice of the meeting, with an agenda, must be mailed to all member dentists in advance and cannot be buried in a different publication.

2.    Actions by members.  Changes APPROVED.  Members may physically attend the meeting and cast a vote or designate a full or limited proxy to vote on the member’s behalf.  Formerly, proxy voting was not permitted, and as a practical matter, there were not physical meetings.  Mail-in ballots or action without a meeting is no longer permitted; for those members unable to attend, they can cast a proxy instead of a mail-in ballot.   The key is that the former practice of membership decisions without a meeting for deliberation and debate are no longer permitted.

3.    Popular election of member directors.  Changes REJECTED.  Candidates for member directors are still chosen by a governance and nominating committee of the board rather than nominated from amongst the members.

4.    Independent director superpowers.  Changes REJECTED.  The nomination, election, and removal of Independent Directors is reserved for the Independent Directors, not the entire board.  CDWS believes this conflicts with Washington state law, specifically RCW 24.03.115.  Nevertheless, the effort to reserve these decisions to the entire board (which is still controlled by the Independent Directors) was rejected.

5.    Committee appointments.  Changes MOSTLY APPROVED.  Formerly, board committee members were usually appointed by the chair of the board in consultation with the CEO.  Now the committee appointments are made by the entire board, with the exception of the Independent Directors on the Provider Compensation Committee.

6.    Amendment to bylaws.  Changes PARTIALLY APPROVED.  Bylaw changes now require 2/3 member vote at a meeting rather than the mail-in ballots formerly used by WDS management.   Certain bylaw changes required the approval of Independent Directors.  This section was deleted by the members, but the amendment was rejected by the Independent Directors even though it was not one of the sections subject to Independent Director approval.

7.    Information.  Changes APPROVED.  WDS must send a copy of its audited financial statements to its members no later than 7 months after the close of the year.  It must include a general discussion about the state of the market and the profession, and provide an analysis of the compensation and incentives it provides to its executives the way public companies do.


WDS Post Meeting

I just read the WDS board version of Rodney King’s “can’t we all just get along?”  They asked that we patiently read and consider their response to member supported amendments, as they listened and considered our concerns.  They then, of course, rejected all meaningful changes under the guise that it may hamper their antitrust concerns.  Mr. Dwyer asked that we all should try to have a meaningful dialog.  Curious, that that dialogue didn’t ever occur prior to slash and burn tactics of last spring.

I think it’s tragic, that, due to the perverse nature of non-profit law, a company like WDS can operate in its own vacuum of autonomy, not subject to shareholder’s protests, insulated from strikes by its workers (us) and free to use its cash horde in any way that its oligarchy sees fit.  Since it can’t declare profits, why not just divey up the money in salaries and benefits for the club.

Try to imagine WDS as a for-profit corporation.  Dentists could even be shareholders.  We might even get a dividend the next time WDS slashed fees to providers and kept more money.  We could elect directors at a shareholder’s meeting and maybe even fire the CEO if their performance was subpar. 

Alas, WDS uses its not-for-profit status like a magic cape to hide behind.  When it chooses, it tells us the many things it can’t do, for fear of unfairly benefiting its providers. I thought a non-profit status implied that that business was either a charity and/or for public benefit.  I guess, since Boeing can apply as much pressure as it wants to grind us down; it must be for public benefit.  It also uses the cape to hide behind if anyone calls it a monopoly.  Ask any Olympia dentist if they can function without belonging to the WDS PPO.  Strange, how WDS management has forgotten that it became the state’s largest dental insurance company by the support of its member dentists.  We started it and built it to its present status and now it is no better that any other PPO except that it holds too large of a percentage of patients in most offices.

To its credit, WDS picked an opportune business time to “adjust” fees.  Even though we had had no fee increase for 3 years, the current slow economy allowed them to “adjust” at a time when few of us can afford sever our relationship with them.  What they don’t realize is that even though we can’t collectively fight them, they have created an army of individual dentists who will “unfriend” them.  Who will talk to the patients in their individual offices who are decision makers for their companies or union leaders and suggest that at the next contract, they deal with an insurance company that will consider ethical treatment of its providers, a priority.  I’m sure we will see a resurgence in our efforts to increase direct reimbursement plans.  Perhaps when the economy turns around and many of our patients regain benefits, many individual dentists will then sever this tenuous relationship.

Watch healthcare company ads on TV, or listen to WDS baseball radio ads; insurance companies would have you believe that it is the insurance company that is there to take care of you, not the healthcare provider, MD, DDS (okay DMDs too) nurse or hygienist who delivers treatment.  If they say it long enough and convince the public, we have lost the battle and we might as well just do as they say.  

BTW, did I mention the Withhold?

-Dr. Tim Wandell, DDS
Hoquiam, WA


The Budget Crisis: WSDA News talks with key legislators

With the state still steeped in a budget crisis of immense proportion, the WSDA news reached out to two key players on the senate’s Ways and Means Committee (the primary fiscal committee for the Washington State Senate, with responsibility for developing operating and capital budgets) — Senator Joe Zarelli (Ridgefield, R), ranking republican, and Senator Ed Murray (Seattle, D), Committee Chair, for their take on the budget and what measures need to be taken, including cuts, revenue and taxes. Both were gracious enough to give us time just before the holiday:
WSDA NEWS: Our members are aware of the significant challenges to the state budget — with another $2 billion to cut, this has got to be a near-impossible task. How do you prioritize which programs and expenses to keep and which to eliminate in the current economic climate?

Senator Zarelli: We’ll have to rewrite the budget enough to close that gap, and while the reductions adopted during the recent special legislative session get us about one-quarter of the way there, the heavy lifting is still ahead because we will have to change or eliminate some of the commitments that were made. Which ones? Well, under Washington’s constitution the paramount duty of state government is to make ample provision for basic education. Whether the state is meeting that obligation is being argued in the courts right now – but it’s safe to expect that K-12 education will continue to receive more money than any other area of government. We have public safety obligations, of course, and I also feel strongly about continuing some level of state assistance to our most vulnerable residents. How much assistance is going to be a key question, and that’s where reforms come in.

Senator Murray: Well, not easily, that’s for sure. It’s very hard to prioritize in this situation, and certainly we’re going to look at where we think we can find efficiencies, where we think we can find savings, where we think we can make decisions that won’t have short-term savings and long-term costs elsewhere. But then, given the dire state of this economy around the globe as well as across the state, we’re left with some tough choices. My hope is that we prioritize those things we can cut, those things that we don’t want to cut, and send those to the voters for revenue. 

Senator Zarelli: I don’t see the 2012 budget rewrite being “all cuts” either. For example, let’s suppose the Legislature finally takes action to address abusive lawsuits that target the state and its “deep pockets” at a cost of tens of millions of dollars each year in defense bills and payouts. The $150 million appropriated in the current budget for such costs represents about 10 percent of the remaining budget gap. The reform of lawsuit abuse could largely if not completely free up those dollars for use elsewhere – which could enable the Legislature to maintain a higher level of assistance to our most vulnerable residents.
  I’m not a dentist, but I provide professional services to clients, so I’ll put the tax-reforms-revenue question in those terms. If I want my business to bring in more revenue for whatever reason, there are three straightforward ways to get there. The first is to raise my rates, which is like government adopting a tax increase. The second is to find ways to reduce the cost of doing business, yet serve just as many clients as effectively as before. That’s “reform” – not as easy as raising my rates, but it produces the same net outcome because it lowers the spending side of my balance sheet. As a bonus, reforms that make my operations more efficient can help me weather any loss of clientele, the same way reforms can help state government get by on less revenue. A third approach is to grow my clientele, without changing my rates or how I do business, so that revenue grows naturally. Government can do the same thing by, for example, streamlining the permitting process for construction projects that create jobs. So if I want my business to bring in more revenue, I’d look at streamlining my costs and growing my clientele before I consider raising my rates – and legislators can also go that route.

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State Health Exchanges: A Federal Perspective

Special to the WSDA News from Jon Holtzee, Director, State Government Affairs at American Dental Association

With the enactment of the Patient Protection and Affordable Care Act (PACA) on March 23, 2010, many questions have been asked and many remain on how the state health exchanges which are required to take effect on January 1, 2014 will impact the accessibility and delivery of dental care in our country. While the answer will vary, depending on the nature of the exchange in each state, there are some things that are certain:
• While the Supreme Court considers the case, work will continue on exchange development;
• States may create discrete individual exchanges and small business exchange or create one unified system;
• Those purchasing through the exchange can do so through the web, by phone or through an insurance agent;
• The only dental benefit required is what’s called the “Pediatric Essential Oral Health Benefit” for those children whose coverage is purchased through the exchange. With the recent announcement by the feds that instead of establishing a national benchmark for that benefit, they will instead permit states to choose between a variety of approved benchmarks. It has become vital for constituent societies to become vocal advocates to be sure the best option is selected for that state;
• If a state declines to submit an exchange plan for approval to Health & Human Services (HHS) by January 1, 2013 for activation on January 1, 2014, the federal government will establish the exchange in that state;
• That despite these deadlines, the federal process for rulemaking and guidance to the states will most likely continue to be painfully slow;
• With over 75 percent of dental coverage being family coverage, requiring only a pediatric benefit may change the dental benefit design and market for those in the exchange; and 
• The law requires that stand-alone dental plans be allowed as qualified plans within the exchange in addition to having a dental rider as an option to a medical plan.
A primary concern in the development of state exchanges is ensuring fair and robust competition among various plans offering dental benefits, and providing a variety of plan models within the exchange. Clearly an exchange that only offered a capitated benefit plan may have a difficult time creating a network of participating dentists to provide care to their enrollees. An example of these difficulties is highlighted by the existing exchange in Massachusetts, where a 2009 study funded by Blue Cross Blue Shield of Massachusetts found that access to dentists continued to be problematic. Only a limited number of providers are willing to accept the Dental HMO offered by Doral, which is the dental vendor for both Mass Health (the Massachusetts Medicaid & CHIP program) and three of the four Commonwealth Care (exchange) plans.

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