The American Medical Association said it expects to post operating profits of about $15.1 million in 2005, a sharp drop from record-setting earnings of almost $40 million in 2004. The 62% decline is primarily because of new or increased spending on membership, marketing and advocacy initiatives, including about $21.7 million that is part of a three-year, $60 million national advertising effort aimed at reversing five straight years of slumping membership figures.
The cost of the advertising effort is expected to contribute to another decline in operating profits in 2006, to about $9.5 million, according to a budget report released at the AMA's interim meeting in early November in Dallas. AMA membership has fallen about 16% since 2000 and stood at 244,530 at the end of 2004. Membership revenue is expected to fall about $100,000 to $48 million in 2005 but swing up about $600,000 next year. The organization projects total revenue of $274.8 million in 2005, up 1.8% from $269.9 million in 2004.