The American Medical Association will lose at least $6.6 million on its operations in 2000, marking the fourth straight year of operating deficits for the nation's largest physician organization.
Struggling through one of the most difficult periods of its 153-year history, the Chicago-based AMA also will lose about 3,700 members, according to an economic forecast released last week at the group's 54th annual meeting in Orlando, Fla.
The drop in membership, one of the largest in recent years, resulted in about $4.1 million in lost revenue and contributed heavily to the organization's bleak overall financial picture, officials said.
Yank Coble, M.D., a member of the AMA board of trustees who delivered the grim news in a 30-minute presentation, described the membership figures as "very disappointing" and said revenue from dues has decreased in each of the past three years. "Growth in membership will be a major challenge in the next few years."
E. Ratcliffe Anderson, M.D., who has vowed to boost membership since his hiring in May 1998 as executive vice president, said the AMA now has about 290,000 dues-paying members, the lowest number since the mid-1990s. Last year, the AMA's membership list totaled 293,695, the highest in five years.
"This is not a bullet any of us can delay or dodge," Anderson told delegates. "These numbers have a clear, simple message. And it's this: If you always do what you've always done, you'll always get what you've always got. This means we have to change what we have always done about membership."
The AMA debated but did not adopt any new programs to try to spur membership growth. It recently instituted a lifetime membership plan with the annual dues based on age. The AMA, which represents about 37% of America's doctors, has a standard annual membership fee of $420.
Top officials made it clear that membership is a top priority.
"The more members you have, the more relevant you are," said Richard Corlin M.D., the AMA's president-elect. "We need members to remain relevant, and we need members for the importance of dues revenue."
Total AMA revenue for 2000 is estimated at $258.4 million, or 5.6% higher than last year's total of $244.7 million.
The AMA's estimated operating loss of $6.6 million in 2000--which Coble said could run as high as $8 million--represents an improvement over the operating loss of $15 million in 1999, when about 80 jobs were slashed, programs eliminated and a spending freeze imposed in the fourth quarter.
Actually, when nonoperating and nonrecurring items are included, the AMA said it will wind up about $7 million in the black. The majority of that gain came from the $19.8 million profit on the sale of the association's former Chicago headquarters.
Despite another year of bad financial news, Coble predicted the organization will be close to a break-even budget by the end of 2001.
He estimated that the AMA will turn a $200,000 operating profit next year. But that gain will be offset by a $2.5 million expense for the AMA's start-up costs as part of a joint-venture with Acxiom, a Little Rock, Ark.-based data-service firm that conducts customer profiling. Acxiom will market the organization's membership list.
"On balance, we've made good progress in cutting expenses and reducing the AMA's deficit," Coble said. "Next year, we should continue to see progress toward fiscal health. Having said that, I must make one thing clear: We are nowhere near complete."