Saturday Morning Rounds November 28th, 2020 - The AMA is the wooooorrrrrsssst (and we had no idea)

Posted by BossB, MD on November 28, 2020
BossB, MD

Saturday Morning Rounds

A weekly round-up of career & negotiation content for women physicians

 

What got our attention

AMA? BITFD!

That first acronym refers to the American Medical Association, an organization with which our readers are almost certainly well-acquainted. We'll spare you the parsing of the second acronym, except to say that it's not friendly. And for good reason.

In this article (which might be paywalled but which we'll summarize the highlights of below), the author conducts a systematic and thorough takedown of the AMA and its so-called "non-profit" business practices.

We usually don't give space to takedowns and negativity in this newsletter, but the egregiously predatory nature of their business practices is something we felt that you, as their intended prey, need to know. So here goes:

"In 2018, the American Medical Association had total revenues of $332 million. That’s not a typo or an extra zero or two in there. That’s three hundred and thirty two million American dollars in revenue. In one year.

I figured membership dues would be the biggest revenue line item, but no, not even close. Membership dues from all you doctors comes to just over 10% of revenues – $36.8 million. The AMA got almost as much in revenue from direct sales of merch – $29.7 million – and with a COGS of $5 million you really gotta admire their margins. Subscription revenues of $39.7 million were a bit higher than membership dues, but still not the biggest revenue item. Nor was the advertising revenue of $15.7 million, nor the dividend income of $12.4 million on an investment portfolio of publicly traded securities valued at $643 million, nor the profit on securities sold of $14.0 million, nor the “credentialing” revenue of $14.0 million, nor the “reprints and permissions” revenue of $7.4 million, nor all the other odds and ends categories.

No, by far the primary annual revenue engine for the AMA is … royalties.

In 2018, the American Medical Association made $158.6 million in 100% gross margin revenues by licensing its name and logo and membership lists to everyone from its own insurance brokerage subsidiary – the AMA Insurance Agency – to every pharma co or medical device co or whatever co that was willing to pay for that stamp of approval and halo of authority.

That’s how the AMA makes its money. Not so much by selling TO you – the doctors of America – with membership dues and overpriced PPE and merch, but by selling YOU – the doctors of America – to anyone who wants to buy your name and your reputation.

Okay, okay, but I’m sure it’s all for a good cause! Tell me about all the outreach programs and charitable grants that the AMA administers, Ben!

Yeah, well, about that …

In 2018, the AMA made $4.9 million in grants to 82 separate 501(c)(3) organizations. Almost all were quite small and for specific programs, except for a $1.8 million grant for “general support” to the PCPI Foundation, a Chicago-based medical consortium that is very closely linked to the – golly, can this be right – Chicago-based AMA. So really it was $3.1 million to 81 recipients, and yes, you can do that math as easily as I can: in 2018, the AMA handed out less than 1% of its revenues in grants and awards to independent medical charities and research programs.

The AMA spent more money on office equipment ($3.9 million) than on grants and awards. The AMA spent as much money on market research and telemarketing sales ($3.0 million) than on grants and awards. The AMA spent twice as much on advertising and promotion ($6.1 million) than on grants and awards. The AMA spent more than twice as much on membership solicitation ($7.8 million) than on grants and awards.

Of course you see where this is going.

In 2018, the American Medical Association spent $168.7 million on employee salaries and benefits.

The AMA had twenty-four Trustees in 2018, each paid an annual stipend ranging from $70,000 to $290,000. Four former Trustees, who had no apparent ongoing connection with the AMA, still collected $10,000 to $25,000 that year.

The AMA has five Senior Vice Presidents paid between $880,000 and $1,050,000 in 2018.

The AMA has a Chief Strategy Officer who was paid $1,130,000 in 2018.

The AMA has a Chief Operating Officer who was paid $1,350,000 in 2018.

So the AMA makes their money by selling YOUR information, and does about the minimum humanly possible in terms of charity to maintain their not-for-profit tax filing status.
 
But wait! There's more. They're one of the worst offenders we've seen when it comes to the gender pay AND leadership gaps in medicine

"The AMA has a Chief Financial Officer who was paid … huh? … only $730,000 in 2018. Wow, that’s weird. I mean, she’s the only woman in the C-suite, but I’m sure that has nothing to do with it. I think we all know that being a CFO is nowhere near as rigorous or demanding a job as being a ((checks notes)) Chief Strategy Officer, especially one who was the CEO’s best bud when they were both working at the University of Chicago Medical Center, a best bud who replaced the CEO and made sure he got his $2.7 million severance payment when the CEO was forced to resign."

In conclusion:

"The AMA is not a charitable organization.

The AMA is not an educational organization.

The AMA is a tax-exempt hedge fund and licensing corporation.

The American Medical Association is designed from the ground up to enrich its executives.

Publicly, it espouses a doubleplusgood narrative of social justice and health equity. Privately, the only interests it serves are its own bureaucratic imperatives and the self-aggrandizement of its “leaders”.

There is no “fixing” the AMA. There is no “reforming” the AMA. This is … this is an abomination.

Burn. It. The. F***. Down."

While this all seems to be pretty spot-on, we didn't do the primary research ourselves and we don't like to take such a strong stance on much of anything that we haven't dug into deeply ourselves. So, if you know something we don't or if there's a part of this story that you feel is missing, please let us know. Otherwise, we recommend you act on this information however you deem fit while it's still top of mind.

Who we're following

The American Medical Women's Association (@AMWADoctors) is:

  • Not affiliated with the AMA, as far as we can tell (though unfortunately named in a very similar manner, hence our desire to highlight and exonerate them this week)
  • An organization that actually spends money judiciously to support its charter
  • Probably the most powerful and effective advocate out there for closing the gender gap in all areas of medicine

If you were a member, follower, or even silent tolerator of the AMA, we humbly suggest that you consider transferring that energy and those resources in this more productive direction :)

BBMD tip of the week

Language can lie, money cannot.

Note and remember the huge difference between the language of the AMA and the way it actually allocates its assets. Anytime you're engaging with an institution, and especially anytime you're interviewing to work somewhere, ask to see the receipts.

What do we mean by that?

Look up public filings about how they spend money. This will tell you a lot more than any "mission & vision" section of their website ever could.

Ask to see the monthly and yearly "books" of the business, especially if you're becoming enmeshed in their finances (ie interviewing for a job in which you'll eventually become a partner or get some other kind of profit-share/ownership). And review it separately with your own accountant. This will tell you more than a full week of interviews with all the senior partners and administrators ever could.

Quote we're contemplating

"Hope has two beautiful daughters - Anger and Courage. Anger at the way things are, and Courage to see that they do not remain as they are." - St. Augustine

 
 
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Have a wonderful weekend, y'all!