CAP Review and Forecast: 2024 Financial Update

Robert Johnson:

The annual report for the College of American Pathologists is online and the financial outlook is good. Spring is here, and that means it's time for release of the CAP's annual report. Dr. Al Campbell is Secretary-Treasurer and a member of the Board of Governors. Here's his take on the state of the CAP's finances.

Dr. Alfred Wray Campbell:

Yeah. Overall, I think our financial health is pretty good. We have steady revenue growth and have made decisions on the expense side to get that under better control. Overall, our investment portfolio has also continued to perform pretty well.

Robert Johnson:

Thinking about everything in the annual report, for people who might not look through all of the paperwork, what do you think are some of the keys to our success going forward?

Dr. Alfred Wray Campbell:

There's probably a couple of things I would highlight. Maybe first is our ability to continue to fund the current and future initiatives that's really important for the success of the CAP. And to that end, some significant changes were made in 2024 related to operating expenses. We needed to make those changes to ensure that we really have the resources necessary for the CAP to continue to succeed. Our operating expenses had grown over the past number of years, sort of out of proportion to the revenue, and so that changed last year, allowed us to really correct that and get us back on track to a more sustainable operating margin.

Robert Johnson:

What would you say are some of the most important metrics we ought to be looking at in this report or even thinking about going forward?

Dr. Alfred Wray Campbell:

We really want to focus on those metrics that hopefully can provide a standardized way for us to analyze the financial performance as it is important to the CAP. So the things that we really monitor are the total revenue, total expenses. We really look at that operating expense ratio, and ultimately we're looking at the EBIDA list, the capital expenditures as one of the common metrics used in financials. So those are really the things that we really focus on. We also, to a little bit of a degree, also look at year over year growth and how that affects as well as our operating cashflow.

Robert Johnson:

What are some of the biggest opportunities and risks that we should be aware of?

Dr. Alfred Wray Campbell:

Well, right now, I think the opportunities are making sure that we really have a comprehensive financial plan. We need to really look at both the short-term and the long-term goals of the organization and make sure that we have the resources necessary to succeed. So right now, the biggest risk to our financial health has really been our operating expenses, and I think we really need to continue to focus on that. We have a plan moving forward to ensure that we get that once again back in line, so that we can get to a more reasonable operating margin.

Robert Johnson:

These kinds of reports come and go. Sometimes people look at them, other times they don't. Why do you think CAP members ought to be aware of what's in this document?

Dr. Alfred Wray Campbell:

It's really important. This organization, board certified pathologists really does support both pathologists and laboratory medicine and patients around the US and the world. And if the CAP is not in a financially stable position, then obviously that does put that at risk. And the support that we give pathologists, both on a regulatory standpoint as well as in practice, could be at risk. So I think it's really important for pathologists to be aware of the financial position of the CAP.

Robert Johnson:

You can read more in the CAP's 2024 annual report. It's online. There's a link in the show notes for the College of American Pathologists. This is Robert Johnson. Have a great day.