Building on the idea of draws:
Get some glow-in-the-dark paint from a craft store. Cut a few slips of paper, and paint signs of horror and madness on some. Others leave blank. Players can draw these from a bag or cup during the game—a blank is good, but unfolding the slip to find a sign of horror is a failure/consequence.
Tailor the mix of blanks and signs according to your preferred probabilities, and optionally have a few "steps" of severity to the signs.
The disadvantage with this method is that glow-in-the-dark paint will need to be exposed to strong light for long enough before the game to last the session, and it's easier to misplace the blank slips than the painted ones (though the players will naturally be motivated to not misplace the blanks so they don't tip the scales against them in later draws).
The advantages are that it's low-tech and thematic, and tactile resolution mechanics are always appealing. It's also relatively cheap to set up and easy to customise. With a bit more investment, there are also multiple colours of glow-in-the-dark paint available, broadening the spectrum of results with the addition of "good" glowing signs in addition to or instead of the blanks.