There are a ton of folks that seem to have a problem with either their HPs being visible, or with knowing how low the party members' HPs are.

My suggestions:

Give XP and loot bonuses based on Hit Points. The lower the group's HP total, the bigger the bonus.

Alternatively, you could base dungeon scaling on HP not on levels. No harm, no foul if a few low HP folks hit your group...things will adjust; just like a DM would in pnp.

Personally, this is a non-factor to me. I've been healing folks for ages; if they insta-drop I have to make a choice between speeding up my healing or letting them stay dead. I always try a ress or three before giving up and accepting that the group will be better off without them alive.