Pedantic
Legend
That's just a more granular version of LR as it currently exists, right? LR is basically how a 3 hit point tracker, especially if we assume most spell conditions are roughly equivalent to death.I wonder if an ablative almost hit points style system would work. The creature has Legendary Resistance equal to its CR (for example). The PCs have to burn through that LR before the monster can suffer a "failed save" condition. For spells, if the monsters fails a save, it reduces its LR by the spell level. If it is a class ability or another monster's ability, it reduces the LR by half the character level or CR, as appropriate. As long as the monster has enough LR to "burn" the failed save is instead a successful save.
It's crude and fiddly as a first blush idea, but might be worth exploring further.
It's more flexible, but I think the issue there is that doesn't solve the mixed party problem. Either you're going after HP or LR, and martial/magical attacks deplete separate, unrelated pools. The problem, really, is that spell conditions are supposed to be incrementally effective, making the group more effective with each successful cast, and the combination of short combats and powerful conditions makes that very hard to land, especially for 9 increasing levels of power.
The best solutions seem to be making the condition track inherent to the monster, so that each LR is scaled to solve self-inflicted penalty. That gets a little awkward, because you might also need to adjust spells so that it's a reasonable choice to compare the personal LR penalty and the spell and sometimes pick the latter. That, and it's a much more content heavy design solution, because you have to build a special penalty track for each monster.