Range: The difference in value between the maximum and minimum values of a dataset.

Average (Mean): The average value of an entire dataset.

Median: The value that divides the dataset in half, the middle value.
1st Quartile: The value halfway between the smallest number and the median.
3rd Quartile: The value halfway between the median and the largest number.

General Statistical Terms

Evaluating the Plot

Why Is This Important?

- The vertical line at the left of the plot (left whisker) represents the minimum value of the dataset.
- The horizontal line that extends from this and touches the left side of the “box” represents the minimum value’s distance from the 1st quartile (25th percentile) of the data.
- The line in between the grey boxes represents the median value of the dataset, or the most central value.
- The right side of the box shows the 3rd quartile (75th percentile). The very rightmost vertical line (right whisker) shows the maximum value of the data, and the line between it and the 3rd quartile represents the maximum’s distance from the 3rd quartile.
- Finally, the circle on the plot represents the average of all values in the dataset.

Box and whisker plots let a person quickly make sense of a dataset’s distribution and symmetry – how the data is spread out. For example, take the following plot.

Box and Whisker Plots

What is it?
A box and whisker plot is a graphical description of the distribution of data through five qualities of the dataset: its minimum, 1st quartile, median, third quartile, and maximum. Kaufman Hall box and whisker plots also display the average (mean) value of the dataset.

This plot has a long left whisker, which means the minimum value is very far away in magnitude from the center 50% of the data. The average is also to the left of the median, which tells us that the minimum value is very large, pulling the average down. The 1st quartile is wider than the 3rd quartile, telling us that the data in the 1st quartile is more spread out in value than those in the 3rd quartile. Finally, the data is skewed to the left. The right whisker is short, and the box is closer to it than the left whisker, meaning that more of the data has higher values.

Quadrant Graphs

What is it?
The Quadrant Graphs plot (for each group) the median value of a measure’s Budget Variance (on the x-axis) against its Actuals Year over Year percent change (on the y-axis). The two groupings Kaufman Hall uses are Bed Size and Region. For clarity, the region map is given below.

Evaluating the Graph

Why Is This Important?

- Each point on the Quadrant Graph shows both the relationship of a hospital group’s performance on its own as well as its performance relative to other groups.
- A point’s position on the x-axis gives its budget performance.
- Right-of-center means above budget.
- Left-of-center means below budget.
- Center means at budget.
- A point’s position on the y-axis shows performance compared to last year. - Above center shows a quantity greater than last year. - Below center shows a quantity less than last year. - Center shows a quantity the same as last year.

The position of each marker in relation to each axis allows conclusions to be drawn about a region’s overall performance in a specific area. The favorable quadrant for each measure will vary. Consider an expense measure; generally, a hospital group in the lower left quadrant would be doing well, as they are under budget and have fewer expenses compared to last year. Even so, note that a marker at the extremes of either axis would not be favorable. This trend is not true of volume measures, where the upper right quadrant is indicative of good performance.

The following information outlines each of the different measures and what they describe.

Operating Margin: Operating Margin is a measure of profitability after accounting for all costs. Operating Income divided by Net Operating Revenue.

Operating EBITDA Margin: EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) Margin is an assessment of operating profitability as a percentage of total revenue. EBIDA divided by Net Operating Revenue.

IP/OP Adjustment Factor: Gross Patient Revenue divided by Gross Inpatient Revenue to calculate the inpatient to outpatient ratio for adjusted calculations.

Adjusted Patient Days: Patient Days adjusted for outpatient activities. Patient Days multiplied by the IP/OP Adjustment Factor.

NPSR per Adjusted Patient Day: Net Patient Service Revenue ratio adjusted for outpatient activities. Net Patient Service Revenue divided by Adjusted Patient Days.

Total Expense per Adjusted Patient Day: Total Expense ratio adjusted for outpatient activities. Total Expense divided by Adjusted Patient Days.

Labor Expense per Adjusted Patient Day: Labor Expense ratio adjusted for outpatient activities. Labor Expense divided by Adjusted Patient Days.

Bad Debt and Charity as a % of Gross: Calculates the percentage of uncompensated care relative to Gross Revenue. Divides the Bad Debt and Charity Deductions by Gross Revenue.

Productive Hours as % of Paid: Used to determine the percentage of Productive Hours to total Paid Hours. Divides Productive Hours by Paid Hours.

Average Rate per Hour: The overall average hourly rate paid. Takes the Wage Expense measure and divides it by Paid Hours.

Overtime Hours as % of Productive Hours: Used to determine the percentage of Overtime Hours to Productive Hours. Divides Overtime Hours by Productive Hours.

Non-Labor Exp. per Adjusted Patient Day: Non-Labor Expense ratio adjusted for outpatient activities. Non-Labor Expense divided by Adjusted Patient Days.

Supply Expense per Adjusted Patient Day: Supply Expense ratio adjusted for outpatient activities. Supply Expense divided by Adjusted Patient Days.

Drug Expense per Adjusted Patient Day: Drug Expense ratio adjusted for outpatient activities. Drug Expense divided by Adjusted Patient Days.

Purchased Service Expense per Adjusted Patient Day: Purchased Service Expense ratio adjusted for outpatient activities. Purchased Service Expense divided by Adjusted Patient Days.

Operating Room Minutes: Total number of minutes from patients in the operating room.

ED Visits: Number of Emergency Department Visits.

Cath Lab Visits: Number of Cath lab visits.

Adjusted Discharges: Discharges adjusted for outpatient activities. Inpatient discharges multiplied by the IP/OP Adjustment Factor.

NPSR per Adjusted Discharge: Net patient service revenue ratio adjusted for outpatient activities related to discharges. Net Patient Service Revenue divided by Adjusted Discharges.

Average Length of Stay: A mean calculated by dividing the sum of Equivalent Patient Days by the number of Equivalent Discharges.

FTEs per Adjusted Occupied Bed: Measures the productivity of labor as a function of the number of adjusted patient beds. Divides paid FTEs by the Average Daily Census (Total annual Adjusted Patient Days divided by 365).

Kaufman Hall Measure Definitions

The National Hospital Flash Report uses both actual and budget data over the last three years, sampled from over 800 hospitals on a recurring monthly basis from Kaufman Hall’s Axiom Comparative Analytics™ tool. The sample of hospitals for this report is representative of all hospitals in the United States, both geographically and by bed size. Additionally, hospitals of all types are represented, from large academic to small critical access. Advanced statistical techniques are used to standardize data, identify and handle outliers, and ensure statistical soundness prior to inclusion in the report. While this report presents data in the aggregate, the Comparative Analytics™ tool also contains this real-time data down to individual department, jobcode, paytype, and account levels, which can be customized into peer groups for unparalleled comparisons to drive operational decisions and performance improvement initiatives.

Axiom is the wholly owned software division of Kaufman Hall.

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