I like this option the more I think about it, and so I have decided to expand upon it and present it as a rules variant.
Ongoing Contest Consequences, and Dramatic Situations as Healing.
In many dramatic contests, the consequences will have lasting implications. In HeroQuest the mechanical consequences are represented as levels of health, Hurt/Impaired/Injured/Dying and negative modifiers are applied to relevant skills. I propose that the negative modifiers should be applied specifically to relevant contests as dictated by their goals, regardless of skill, and the results of these contests should be cross referenced to the healing tables to gauge the ongoing nature of the consequences.
Where the application of the modifier is clear, the narrator may impose this penalty (applied to the skill including augments, but with situational modifiers being applied last), but the player may grasp contest opportunities that arise, by agreeing on a suitable goal with the narrator, and voluntarily taking the penalty in that contest.
Example:
Garath is courting the chieftain's daughter Gwenna and risks all by declaring his intensions in a song at the harvest fair. On a minor failure, his beloved is less than impressed, and she makes it obvious to all by seeking other company and ignoring his overt advances. Garath's pride is "Impaired", as is his potential relationship with Gwenna, yielding -10% in any contests in which he tries to impress a fellow clansman, or woo Gwenna further.
A few days later, Garath is called upon to lead a group of warriors on a cattle raid. Garath's player sees an opportunity to regain a portion of Garath's lost pride, and accepts the 10% penalty on his raiding skills in this contest. The narrator and the player decide on a goal for the contest that encompasses both aims: "lead a successful raid, and regain my pride amongst the men of this clan". Garath gains a marginal success on the raid, he and the warriors return from the raid with a couple of cows, and a few minor bruises from a defensive patrol. The result is also cross referenced with the healing charts, in this case mundane healing, and the result "any other victory" yields a reduction from "impaired" to "hurt" or -1 in future contests.
At that evening's celebration feast, Garath attempts to capitalise on his success, by gifting Gwenna a young calf from his own herd. The narrator rues that the consequences of his previous advances still apply in this contest, imposing a 10% penalty, but applying a situational bonus for the feast The goal is set as "Turn my love's heart back towards me with this gift of future potential". This time, fortune is against him, and on a minor defeat Gwenna passes the gift onto her brother, proclaiming no love for livestock. The result from the mundane `healing' is "only magic or time can heal the wound", and the player must decide if Garath can patiently wait for Gwenna's heart to soften or if he will raise the stakes, by seeking a magical solution.
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