American Medical Association
The AMA is the largest professional association of physicians in the United States - but only 15% of U.S. doctors are actually members (down from 75% in 1955). Despite declining membership, the AMA wields enormous power through its control of critical healthcare infrastructure: the CPT code system and the RUC committee.
Every medical procedure in America is billed using AMA's CPT codes, generating $72 million annually (61% of AMA's dues revenue). The RUC committee, composed primarily of specialists, advises CMS on how much Medicare pays for each procedure. CMS accepts RUC recommendations 87% of the time - making an industry association effectively control government healthcare pricing.
The RUC committee is dominated by specialists (only 3 of 31 seats for primary care) and meets in secret. Medicare accepts its pricing recommendations 87% of the time. GAO found the RUC systematically overvalues procedures and undervalues primary care. Despite this, CMS has ceded pricing authority to this private association for decades.
Key Facts
Power Dynamics
Represents physician interests, accredits medical schools
Controls CPT codes (mandatory for billing) = $72M/year revenue; RUC committee effectively sets Medicare prices; medical school supply restriction limits physician competition
- CPT code monopoly (switching costs too high)
- RUC committee gatekeeping
- Medical school accreditation
- CMS (outsourced pricing authority)
- Specialist societies (RUC dominance)
- Medical schools (supply control)
Revenue Structure
American Medical Association Revenue Sources
- CPT code licensing 61% →
- Membership dues 15% ↓
- Publications and advertising 24% ↓
Mandatory for healthcare billing
Only 15% of doctors are members
Depends on CPT monopoly - government could create public alternative; membership continues declining
Infrastructure revenue ($72M) more valuable than membership revenue - guild model replaced by toll booth model
Decision Dynamics at American Medical Association
COVID telehealth coding expanded in weeks
RUC reform has been discussed for 30+ years without fundamental change
Specialist dominance in RUC; AMA governance weighted toward older specialists
Failure Modes of American Medical Association
- Opposed Medicare (1965)
- Opposed HMOs (1970s)
- Lost membership from 75% to 15%
- RUC overvaluation contributes to healthcare cost crisis
- Specialist capture of RUC perpetuates payment distortions
- Membership decline threatens political legitimacy
- Young physicians organizing alternatives
If CMS creates public CPT alternative or bypasses RUC, AMA's infrastructure power evaporates rapidly
Biological Parallel
Like a parasite that has become essential to the host's metabolism. The AMA no longer represents most doctors (15% membership) but controls critical infrastructure (CPT codes) that the healthcare system cannot function without. The RUC is like a gland that secretes hormones (pricing signals) affecting the entire system, but is controlled by a subset of specialists serving their own interests.
Key Agencies
Controls medical procedure coding system
Advises Medicare on procedure pricing