Healthcare Business News

AMA profit grows despite membership decline

By Andis Robeznieks
Posted: June 7, 2010 - 9:45 am ET

As the American Medical Association prepares for its annual House of Delegates meeting June 12-16 in Chicago, the organization's recently released 2009 report paints a fairly optimistic picture, with a relatively strong financial rebound despite a loss in revenue and a continued decline in membership.

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For the 10th consecutive year, the AMA operated in the black. Furthermore, the organization's $16.5 million profit margin was 560% higher than the $2.5 million profit it posted in 2008. (To put things in perspective, though, the latest figure is still 32.4% lower than the $24.4 million the AMA made in 2007 and 45.5% lower than the $30.3 million it made in 2006.)

Spending cuts were responsible for most of the gain; revenue declined by $13.4 million as publishing operations saw advertising fall $7.7 million and money from membership dues dropped $1.7 million.

According to the report, membership declined almost 3.4% in 2009 to 228,000—itself about a 2% decline from the 241,000 reported for 2007. (The 2007 figure is notable in that it marked the first time in seven years that membership increased, about a 1% jump. But that boost was achieved by giving away 8,577 free memberships for first-year residents who had been student members the previous year.)

Membership dues account for about 16% of AMA revenue, the report stated, and the $42.2 million collected in 2009 was almost 3.9% lower than the $43.9 million collected in 2008.

An e-mail from the AMA quoted board member Robert Wah, M.D., as saying that the "slight dip in the AMA's 2009 membership is consistent with recent annual trends.”

Continued Wah: “We are committed to increasing the AMA's value to physicians, especially in the important areas of practice management, health information technology, advocacy and public health. Our solid financial footing creates a firm foundation for the future and provides us with the resources needed to identify and expand our array of member benefits that appeal most to physicians as we help doctors help patients.”

This “slight dip,” however, may have implications for representation in the House of Delegates. Several state medical societies saw significant percentages of their members leave the AMA over disagreement with the organization's support of the healthcare reform law.

Among the multitude of resolutions to be discussed at the annual meeting will be one calling for freezing the current representation in the House of Delegates for five years. It was introduced jointly by the state delegations of Alabama, Arkansas, Delaware, Florida, Georgia, New Jersey, Oklahoma, South Carolina and Tennessee, as well as the American Association of Neurological Surgeons, the American Society of General Surgeons and the Congress of Neurological Surgeons.

By percentage, South Carolina and Florida saw the largest declines in AMA participation; membership in those states dropped 15% and 13%, respectively. Florida topped all other states in the number of lost memberships, at 1,620. California followed with a loss of 860 members, a 5% drop. (A representative of the Florida Medical Association could not be reached for comment.)

Although individual physicians show waning interest in joining the AMA, there is continued pressure from specialty and subspecialty societies that want to be included in the House of Delegates. A quiet controversy is simmering on this issue, as there is a fixed number of geographically based organizations—the 50 state medical societies, plus organizations representing physicians from the District of Columbia, Guam, Puerto Rico and the Virgin Islands—and the growing number of specialty and subspecialty organizations.

Current AMA policy states that an organization can earn representation in the House of Delegates by meeting one of three criteria: an AMA membership of at least 1,000; an AMA membership of at least 100 with an AMA participation rate of at least 25% of eligible physician members; or previous representation at the House of Delegates' 1990 annual meeting and a current AMA participation rate of 25% of eligible physician members.

Last year, this issue came to a head when the rules called for the ousting of the American Academy of Hospice and Palliative Medicine. The academy's AMA participation dipped to 22.2%—even after a recruitment drive brought in 118 new AMA members, boosting the group's AMA membership to 592. One delegate noted that, during a time of declining numbers, it was the wrong time to remove an organization that had just signed up 118 new AMA members. This logic prevailed; the AAHPM retains a delegate this year.

The AMA's annual report includes financial figures culled from the various groups within the organization; as such, numbers can vary greatly from those that appear on the AMA's 990 tax form, which reports only information on the organization's not-for-profit enterprises. On its 2008 Form 990, the AMA reported a $21.3 million loss, compared with a $31.4 million profit in 2007.

In addition to listing assorted facts and figures, the 2009 annual report described the AMA's participation in the healthcare reform debate, its role in the response to the H1N1 flu virus, President Barack Obama's address to the House of Delegates, and the appointment and unanimous confirmation of former AMA board member Regina Benjamin, M.D., to the post of U.S. surgeon general.



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