michael million consulting

Synopsis

Professional associations, societies and academies are an essential part of the medical field; every physician joins at least one association during his or her career. Membership in such organizations promotes career advancement, provides mentorship, grants access to cutting-edge clinical research and practice management techniques, and contributes to legislation and lobbying that sets improvement standards for public health, patient safety, and medical ethics.

 

While medical associations continue to serve an important role, many are seeing growth slow, while others are experiencing financial difficulties exacerbated by the pandemic which took a toll on income from conferences that are relied on for almost half of revenues on average. While revenue from annual meetings is returning, many associations got a wake-up call during the pandemic regarding their financial position. After years of expansion, many larger associations are stalling with bloated corporate staffs, while many smaller associations are struggling to stay viable, accumulate required resources, and establish a critical mass of members and support needed to have influence on policy.

 

To meet this challenge, proactive societies are seeking creative ways to differentiate their offerings beyond standard membership dues, CME courses, annual conferences, and donations. Diversification measures can reduce medical organizations' reliance on a single revenue stream, resulting in a more sustainable financial model. By adopting a business mindset focused on expanding their portfolio of products and services targeted at specific audiences, associations put themselves in a stronger position by building in resilience to weather economic downturns, serve their members more effectively, and have a greater impact on healthcare.

 

The businesses of associations are being challenged 

Associations made steady success for decades following their formation, but many have seen declines in membership, influence, and income for several years, even before the pandemic, which exacerbated losses. For example, in the early 1950s, almost 75% of US physicians belonged to the American Medical Association (AMA). That percentage has steadily declined over time. In 2019, the ratio fell to 12-15%, depending on the source. According to WildApricot, a prominent member management software vendor, in their 2023 Membership Marketing Benchmark Report, 24% of associations experienced a reduction in member renewal, a 27% decrease from 2022, while 45% of associations reported that their renewal rate stayed unchanged. These are concerning findings for medical association executives who want to keep their organizations running and have an impact on legislation that affect their members. Following are the most predominant of reasons for this decline: 

 

• Slowing growth in membership and net loss from dues

While membership is the lifeblood of medical associations, it has limited growth potential. Many associations are reaching the upper end of capturing a reasonable percentage of their population of clinicians, and struggle to attract younger doctors who are less inclined to join traditional associations. Associations have increased competition from sub-specialty-specific groups and financial pressures from healthcare systems, the largest employer of physicians, who are reducing allowances for membership dues and conferences. Even if an association has the majority of physicians as members, dues frequently fall short of covering the necessary costs. Many consider membership to be a "loss leader," but it is necessary to ensure that the community is representative of the specialty.

 

• Revenue model disruption

Many of the traditional sources of funding, aside from member dues, have been in decline for some time. Traditional revenue streams such as print magazines and in-person conferences are becoming less profitable. Continuing Medical Education (CME) courses are another example. For many years, medical societies were the only place where physicians could meet their CME requirements, but there are now more accessible and cost-effective choices available. Furthermore, industry engagement has been closely investigated by HHS and the FTC, with stiffer limits on funding and sponsorships limiting groups' capacity to support events and conferences.

 

• Changing healthcare landscape – more employed physicians and new technologies 

Consolidation of healthcare systems is increasing the size and influence of IDNs who are taking on an expanded responsibilities for patient populations by bringing more and more services in-house. This has resulted in fewer independent physician practices, which have traditionally reaped the most benefits from organization membership. Furthermore, rapid advances in medical knowledge, technologies, and practice necessitates ongoing adaptation, which some associations have struggled to keep pace.

 

• Increased competition for physicians’ time and limited resources

Aside from established societies, physicians now have numerous more opportunities for networking, education, and career advancement. The emergence of online communities and social media platforms that enable free networking and information exchange, as well as for-profit organizations that provide similar services at a lower cost or more convenient location. In addition to outside competitors, most physicians must divide their time and resources between at least two societies.

 

What leading associations are doing

Many medical societies have traditionally relied heavily on annual membership fees, one-time annual conference registrations, and sponsorships. However, in recent years, they have been looking for new methods to diversify their income streams by using their core capabilities, the power of their networks, and proprietary data from their members. An effective way to look at diversification efforts is through the lens of five distinct audiences: members, customers, industry partners, allied specialty groups, and government agencies. This outside-in, portfolio approach that starts with a targeting strategy can help guide and prioritize efforts.

 

Opportunities with members

Enhancing the educational experience and expanding training programs

Increasing non-due revenue from members takes advantage of the fact that this group is generally large, somewhat captive, and already predisposed the association's brand. Opportunities with this group are centered on teaching them clinical information required to practice medicine (CME), as well as other areas that will help them manage their practice, lead their institution, and advance their career.  

 

Associations are expanding their educational offerings, including online courses, webinars, and specialty certifications. These can earn additional revenue by charging one-time enrollment fees and annual subscriptions if the programs are compelling. Examples include:

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• Practice of medicine

  • Hands-on skills training for new medical devices or procedures

  • Guideline updates and implementation strategies 

  • Telemedicine and digital health education

 

• Research

  • Analysis of new research findings

  • Research methodology education 

 

• Management

  • Leadership and management training 

  • Communications training

 

While much of this content can be delivered on-demand via technology platforms or at the annual conference where members gather, an increasing number of associations are expanding virtual and hybrid events with tiered pricing; providing year-round access to conference content through subscriptions; and organizing smaller, more frequent specialized meetings or workshops to increase relevance and accessibility to different segments. All of these techniques aim to improve members' educational experiences by meeting them where they are with the type of high quality content they need most in a changing healthcare environment.

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Opportunities with customers

Targeted consulting, advisory, and data analytics services​

The customer audience for medical associations can be amorphous, which many do not consider because it implies a commercial bent that may conflict with the mission-driven focus of membership-based organizations. Successful associations, on the other hand, find a way to strike the correct balance while still taking this audience seriously by generating offers tailored to their needs and marketing directly to them. One challenge is determining how a "customer" is different from other audiences, as it is less clear than with for-profit organizations. Customers of associations are defined more by an occasion or context rather than the sort of entity. For example, a customer could be an individual or firm who buys products or services to directly solve a business problem (context for transaction).

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Members become customers when their relationship with the association shifts from an individual seeking contribution and community for themselves (B2C) to one representing the interests of the business entity to which they belong (B2B), such as when they purchase practice management software. Companies that may sponsor an event to increase access to physicians and build long-term relationships, become customers when they purchase goods that directly affect their business's planning or operations (for example, industry trend reports and forecasts). Corporate customers might include companies from industry, healthcare systems, and physician-owned businesses. Examples of ways associations are expanding their offer set for this audience include:

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• Consulting and advisory services

  • Providing expert consultations to healthcare organizations 

  • Policy development and implementation guidance   

  • Benchmarking and best practices 

 

• Data analysis and insights

  • Collecting and analyzing anonymized member data monetized through reports or consulting 

  • Industry trend reports and forecasts

  • Customized data analysis

 

• Accreditation and certification

  • Licensing and certification programs

  • Accreditation of service lines

 

• New technologies

  • Clinical decision support tools

  • Medical coding and billing software

  • Practice management software

 

• Bundled education

  • CME credit packages

  • Advanced specialty education series

  • New technology training

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Opportunities with industry partners​​

A more strategic approach to sponsorships​

The percentage of medical association revenue coming from sponsorships can vary significantly, but a typical range might be between 10% and 15% for larger associations and between 30% and 40% for smaller ones, so establishing partnerships with industry is critical. Leading associations are building out a tiered approach toward their partner strategy that offers the traditional promotion-based model of one-time event sponsorships plus new arrangements based on more robust collaborations spread out over an annual commitment. An example of this is the Academy of Medical-Surgical Nurses (AMSN) partnering with Medtronic in a year-long partnership to extract insights from continuous patient monitoring, and collaborate on clinical topics, evidenced-based projects, and research projects of value to both entities. As this example demonstrates, more strategic relationships often include increased access to clinical members and/or proprietary patient data from those members that has been anonymized for commercial purpose. Here are some other instances of creating revenue-generating solutions from industry partners:

 

• Sponsored educational content

High-quality online courses, webinars, or podcasts sponsored by industry partners that allows companies to share their expertise while providing valuable education to association members.

 

• Grants for research initiatives

Companies provide grants to conduct and publish research studies, with the association providing access to member expertise and data.

 

• Customized data analytics and market reports

Anonymized member data and insights that informs industry partners’ product development and marketing strategies. Tailored reports on industry trends and member needs.

 

• Co-branded certification 

Certification programs in partnership with industry leaders, combining the association's credibility with company-specific expertise.

 

• Executive roundtables

Organization of exclusive events where industry executives can engage with association leadership and key opinion leaders. Financial arrangement structure so that fees go directly to the association, thereby avoiding conflict of interest and administrative burden of members.

 

• Mentorship and followship programs

Connecting industry professionals with association members for mentorship, sponsored by partner companies. Work with industry partners to fund and organize fellowship opportunities for members.

 

Targeted advertising 

Highly specific advertising options across digital platforms, allowing companies to reach niche segments within the association's membership.

 

Opportunities with allied specialty groups

Expanding the market with increased collaborations​

Societies in related disciplines frequently work together to exchange expertise and resources, improve patient care through more thorough clinical recommendations, pool resources to fund more robust research, and boost lobbying efforts. Examples include:

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• American Academy of Pediatrics (AAP) and American College of Obstetricians and Gynecologists (ACOG) partnering on issues related to maternal and child health, creating joint guidelines for care during pregnancy and early childhood.

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• American Diabetes Association (ADA) and American Association of Clinical Endocrinologists (AACE) working together to develop clinical practice guidelines for diabetes management and endocrine disorders.

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• American College of Surgeons (ACS) and American Society of Anesthesiologists (ASA) collaborating on initiatives to improve surgical safety and outcomes, including developing protocols for perioperative care.

 

In addition to these partnerships working toward the improvement of health outcomes, they can add prospects for revenue through several different means, including: 

 

• Joint conferences and events

Associations may co-host conferences, which can lead to shared revenue from larger registrations and sponsorships. This can also reduce costs through economies of scale.

 

• Joint educational programs

Collaborative training programs or courses can generate shared revenue from participant fees.

 

• Shared publications

Collaborating on research papers, guidelines, or educational materials can lead to shared revenue from sales or subscriptions.

 

• Membership cross-promotion

Associations might offer discounted "bundle" memberships, increasing overall membership revenue for both organizations. Affiliate memberships that include individuals from sister societies is another way to leverage these relationships. 
 

• Grant opportunities

Partnerships can make associations more competitive for large grants, especially for interdisciplinary research projects.

 

• Advertising and sponsorship opportunities

Joint initiatives may attract more sponsors or advertisers, leading to increased revenue for both associations.

 

Opportunities with government agencies

Leveraging expertise and networks to support public health goals ​

Although working with the government can be challenging, it offers great opportunities to advance healthcare initiatives, accrue brand equity, and generate revenues by leveraging medical associations' expertise and networks while supporting public health goals. Following are ways organizations are working with government. 

 

• Public-private research partnerships

Medical associations are collaborating with government agencies on large-scale research projects, securing grants and funding for important studies that benefit public health.

 

• Training programs for government healthcare workers

Associations are developing specialized training and certification programs for public sector healthcare professionals, creating a new revenue stream.

 

• Data sharing initiatives

Some associations are working with government health departments to create secure data-sharing platforms, allowing for better population health analysis while generating revenue through access fees.

 

• Public health campaign collaboration

Associations are creating educational materials and running awareness campaigns in partnership with government health agencies, funded through grants or direct contracts.

 

• Policy consulting services

Medical organizations are offering their expertise to government bodies for policy development and analysis, creating new consulting revenue streams.

 

• Accreditation services

Some associations are working with governments to develop and administer accreditation programs for healthcare facilities or educational institutions.

 

• Health technology assessment

Associations are partnering with government bodies to evaluate new medical technologies and treatments, generating revenue through assessment fees.

 

In conclusion

As many medical associations face financial challenges, they are increasingly looking to diversify their offer to generate revenue, increase resilience, and create a more sustainable model for the future. While most organizations rely on the same, few types of sources, there are considerable opportunities to expand portfolios when content and communities are leveraged, and an innovative business mindset is applied toward solving problems for specific audiences.