Halting a five-year slide in dues revenue, the American Hospital Association last year enjoyed a modest increase in the amount of money it collected from its nearly 5,000 members.
"The dues are . . . a mirror of what's going on with our members," said John Evans, the AHA's chief financial officer. "There was somewhat of a stabilization last year in the hospital industry-when it stabilizes, then our dues stabilize."
And those members might also soon pay a different amount to belong to the nation's largest hospital trade group. Earlier this year the AHA updated its dues formula for hospital members, using current hospital expense information rather than decade-old data.
"The impact of using old expense data had the effect of (hospitals) being charged too little or too much," said Gary Mecklenburg, who leads the AHA board of trustees and is president and chief executive officer of Northwestern Memorial HealthCare in Chicago. "For individual institutions it did make some differences."
The AHA collected a little more than $52.9 million in dues last year, compared with a little less than $52.9 million in 1999. Dues revenue peaked in 1994 at $61.3 million (See chart).
The latest dues figures were reported on the AHA's Form 990, its annual filing with the Internal Revenue Service as a tax-exempt organization. Modern Healthcare last week reviewed a copy of the filing, which is publicly available.
Overall, the AHA posted a $5.1 million profit on total revenue of $78.2 million last year compared with a $4.2 million profit on total revenue of $80.9 million in 1999 (Aug. 13, p. 6).
Program service revenue dropped 12% to $16.5 million last year. That money comes from the AHA's fee-for-service activities, including publications, educational programs, trade shows and research contracts.
With the overall revenue decline, the increased profitability was driven by a 4.7% decrease in total expenses to $73.1 million.
One area that wasn't touched by the spending decrease was executive compensation. According to the most recent filing, executive compensation soared 18% from 1999 to 2000. That compares with a 10% decrease in the amount the AHA paid in salaries and wages to its other employees-from $23.7 million in 1999 to $21.2 million last year.
Evans said the number of AHA employees didn't change last year. The reduction in AHA salary expenses, he said, is tied to an accounting change that centralized multiple payrolls. AHA President Richard Davidson last year received $951,352 in total compensation, which includes salary, employee benefits contributions and expense account allowances. That represents a modest 4.6% increase over his total compensation in 1999, although several other high-ranking executives received lofty double-digit increases (See box below).
The AHA's for-profit subsidiaries, Health Forum and Financial Solutions, recorded a combined profit of about $1.8 million last year, according to Evans. That compares with a combined profit of $3.1 million in 1999. Evans attributed the decline to slowing advertising sales for AHA publications.