Not even a dues hike could keep the American Hospital Association's membership revenue from sliding for the fifth straight year in 1999.
But like the Joint Commission on Accreditation of Healthcare Organizations (See story, p. 7), the Chicago-based AHA, the nation's largest hospital trade group, finished the year in the black thanks to more than $7.9 million in investment income.
In 1999, the AHA posted a profit of $4.2 million on total revenue of $80.9 million, according to the association's annual Form 990 filed Aug. 28 with the Internal Revenue Service. MODERN HEALTHCARE reviewed last week a copy of the filing, which is available for public inspection.
By comparison, the AHA turned a $4.1 million profit on total revenue of $77.8 million in 1998.
The annual filing also details the AHA's 1.1% decline in dues collections last year, which totaled $52.9 million, compared with $53.5 million the previous year.
That revenue drop came despite a 2.5% increase in membership dues that began last year.
"The primary reason for the dues (revenue) going down continues to be the changes occurring within our membership," said Gary Mecklenburg, who is chairman-elect of the AHA board of trustees and president and chief executive officer of Northwestern Memorial Hospital, also in Chicago.
Those changes, Mecklenburg said, include continued hospital consolidation and the closure of some facilities.
Some hospitals are slow in paying their dues to the AHA because of financial pressures the hospitals themselves are facing.
Overall, Mecklenburg pronounced the AHA "a strong organization."
The AHA got a boost last year from its for-profit subsidiary, San Francisco-based Health Forum. The unit's products and services that are related to the AHA's core operations posted a profit of $3.7 million last year. The financial results of Health Forum activities not directly related to the AHA's core operations are not included in that total.
Health Forum was created by the 1998 merger of the AHA's publishing and data units and San Francisco-based Healthcare Forum.
Executive compensation at the AHA totaled $2.2 million in 1999, a drop of 47.2% from the previous year. However, a portion of the decline is because of a change in reporting of executive compensation by the AHA (See story, p. 6).
AHA President Richard Davidson received $909,136 in total compensation last year, or 27% more than he did in 1998. His 1999 compensation package included $695,784 in salary, $171,603 in benefits and deferred compensation, and $41,749 in expense account allowances.
Davidson's 1999 salary included an undisclosed 1998 bonus, which wasn't paid until 1999. His 1999 bonus was paid this year and will be reflected on next year's filing.
The annual filing also details the financial package paid to Jonathan Lord, M.D., the AHA's chief operating officer, who abruptly resigned last October (Nov. 1, 1999, p. 3).
Lord received $785,679 in total compensation last year, including $497,274 in salary, $279,525 in benefits and deferred compensation, and $8,880 in expense account allowances.
Richard Wade, the AHA's senior vice president for strategic communications, declined to say whether the amount paid to Lord included severance. Wade said the money "included everything that was due to him upon his departure."