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The Troubling Business Practices of the American Medical Association

The Wonk Room's Lee Fang has a very troubling backgrounder on the American Medical Association's business practices. The story, put very simply, is that the AMA finds it impossible to live on membership dues alone. This is particularly true because a solid majority of its members are students or retirees, both of whom qualify for reduced rates.

So the group has turned to corporate sponsorship. Up until the 1950s, the tobacco industry was the AMA's largest advertiser. That relationship, happily, has since been terminated. But the revenue still needs to come from somewhere. And these days, that somewhere is drug companies:

AMA derives at least a fifth of its budget from drug companies through an arrangement known as “licensure.” The program consists of AMA selling drug companies its “Masterfile” of doctor profiles, spanning everything from detailed biographic information to an individual doctor’s prescription-writing history. The program is extremely controversial since drug companies in turn use the information to aggressively market their products to doctors. Controversial drugs Vioxx and Avandia, which have subsequently been found to pose significant risks to patients, have been marketed to doctors, in some cases, using information obtained from the AMA.

The AMA claims to have reformed some of these practices since 2007, but it's unclear by how much. Even so, the picture this all paints is pretty clearly of an organization that's deeply interested in, and pretty dependent on, the profits generated by selling health-care services, and that, along with its partners, will naturally find itself in opposition to any policies that would control costs and thus reduce revenue.

By Ezra Klein  |  June 12, 2009; 1:05 PM ET
 
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Comments

How in the name of all that we hold holy did the AMA get the prescription-writing history of my doctor? And how can we get it out of their hands?

Posted by: Cathy10 | June 12, 2009 1:41 PM | Report abuse

The major thing to fear about savings in health costs obtained by electronic medical records in standard format is that everyone will be getting on mailing lists of good prospects based on their history. And don't tell me that privacy laws will prevent this: just think what the holders of the info would pay congress to be able to use this data.

Just think how happy you'll be to get a credit card in the mail without application because you have genetic traits or current afflictions that appeal to some greed merchant. Woohee: I got my Senility Card in the mail today! Yesterday I got my Breast Cancer card with a $25,000 limit.

Posted by: JimPortlandOR | June 12, 2009 1:48 PM | Report abuse

Remember that the AMA does not represent the majority of US physicians. Less than 30% of US physicians are AMA members, even including those students and retirees. As membership has dropped, the AMA has gotten more dependent on this type of industry support.

The prescription data bank sale is one of the reasons I dropped my AMA membership many years ago. I belong to several specialty physician organizations which actually represent my interests.

I think that the AMA should basically be ignored in the health care reform debate since the AMA positions are not representative of most US physicians.

Posted by: drdr2 | June 12, 2009 2:27 PM | Report abuse

Also, as far as reforming these practices, it is now supposed to be possible for individual physicians to opt out of the prescription data bank. I tried to do this last month, but it was confusing and time consuming. If they really wanted reform, they would exclude all physicians by default and let us opt-in. But no one would do that, and then the AMA would lose its drug industry subsidy.

Note that this prescription masterfile contains information on all licensed physicians, not just the minority who are AMA members.

Posted by: drdr2 | June 12, 2009 2:29 PM | Report abuse

Amazing!

Your post on the AMA comes shortly after they came out against the public option for healthcare.

Can you be any more transparent?

Posted by: ElViajero1 | June 12, 2009 2:32 PM | Report abuse

Glad to see you focusing on the AMA as opposed to the insurers as one of the big 3 problems. Please lay into the ABA (and their opposition to malpractice limits) and PHRMA next.

Posted by: staticvars | June 12, 2009 4:18 PM | Report abuse

Unfortunately, this is not an appropriate representation of the AMA Masterfile. The Masterfile does not contain prescribing data, but rather information on physician demographics including medical school and residency history, contact information and medical specialty. Providing this data allows the AMA to ensure adherence to guidelines for use and there is the Physician Data Restriction Program whereby doctors can ask that their information not be shared.

For more information: http://is.gd/10ckN

Posted by: kpedmonds | June 12, 2009 6:27 PM | Report abuse

Ezra,

The AMA masterfile by itself is worthless. All it has is a list of NPIs matched to names.

To get to doctors scripting habits, big pharma has to have the pharmacy scripting data that big pharmacy chains like CVS sell. Their list has the NPI number correlated with the recent scripts that NPI doc has written.

Each list by itself is worthless. But combine both lists together, and you have a powerful machine. The two part system makes it possible for both the AMA and the big pharmacy chains to have "plausible deniability" and blame the other guy for the leak of info.

Congress needs to pass a law banning both pharmacy chains and the AMA from selling this information.

Posted by: platon201 | June 12, 2009 9:47 PM | Report abuse

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