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.
