The change in the dues formula for institutional members of the American Hospital Association should "rein in" the often double-digit dues increases faced by many AHA hospital members, an AHA spokesman said last week.
The association's board of trustees eliminated the old formula, which was based on changes in hospital expenses, at the board's meeting last month in Washington. A special strategic planning committee of the board had been debating changes in the association's 25-year-old dues for nearly 18 months (March 8, 1993, p. 2).
The new formula, which hasn't been completed, would be driven by the AHA's budget needs, and the formula will determine how to allocate needed dues revenues among members, said Richard Wade, the association's senior vice president for communications.
"We'll determine what our expenses are and decide how much revenue we need from members rather than generating all this revenue and then decide how to spend it," Mr. Wade said.
Member dues typically account for more than 60% of the AHA's revenues, excluding proceeds from subsidiaries. The balance of the revenues come from publishing and educational activities, such as seminars and training programs.
Mr. Wade said the new dues system should take effect in 1995.
Under the old system, the AHA assessed institutional members a sliding rate per $1,000 in hospitals' most recent fiscal year expenses. The rate started at 90 cents per $1,000 and dropped to 18 cents per $1,000 after the first $28.6 million in total expenses. Total annual dues for a hospital were capped at $83,900.
Mr. Wade said hospitals could sometimes be hit with dues increases of more than 10% annually.
In 1993, total membership dues col-lected from the AHA's 5,692 dues-paying members, including hospitals, were about $60.6 million, or about $10,654 per member. In 1992, total membership dues collected from 5,687 members were about $55.1 million, or about $9,692 per member. That's about 10% less than in 1993.