The American Hospital Association is suffering through its fourth consecutive year of lower dues revenues, according to data released last week by the Chicago-based trade group.
The AHA estimated it would collect about $53.6 million in membership dues by the end of this year, down $2.7 million, or 5%, from 1997.
Actual numbers won't be available until next year, officials said.
News about another drop in dues revenues comes less than a month after the AHA's 25-member board of trustees approved a 2.5% dues increase for members in the coming year (Nov. 23, p. 42). The increase is the first since 1995.
"It will help offset this loss," said AHA Board Chairman John King, the president and chief executive officer of Portland, Ore.-based Legacy Health System.
Annual AHA dues are based on a member organization's total expenses, so the amount each member pays varies.
The AHA has about 4,700 institutional members, down from as many as 5,900 in 1991.
AHA chief spokesman Richard Wade blamed the declining dues revenues on continued consolidation in the industry.
For example, 627 hospitals were involved in merger and acquisition activity in 1997, according to MODERN HEALTHCARE's 1997 roundup of consolidation activity (Jan. 12, p. 40).
When two AHA institutional members merge, it costs the AHA an average of $100,000 in lost dues, Wade said.
King said a dues discount the AHA extends to systems also accounts for some of the revenue slide. The discount, he said, is an incentive to encourage systems to make all of their hospitals become members of the AHA.
A system's discount is calculated from total expenses and the number of hospital members the system brings into the AHA, Wade said. The discount averages about 11%, he said.
The upcoming dues increase could generate as much as $1.4 million for the AHA, which has seen total revenues drop for the past four years (See chart).
The AHA's other major source of revenues is fee-for-service programming, which along with investments and educational programs, generated about $19.5 million in 1997. That year, the AHA had total revenues of $75.4 million, of which dues accounted for almost 75%.
The declining dues revenues won't mean more job cuts at the AHA, Wade said.
The AHA has about 380 employees at its Chicago headquarters and about 75 employees at its Washington office.