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December 2018
Expense
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Expense by Region ?
The South was the only region to perform below budget on Total Expense per Adjusted Discharge, while the West was in-line with budget and below the prior year. All regions (with the exception of the West) exceeded prior year. Results have been scattered across regions since September, when volumes started increasing at the national level. These scattered results are starting to trend in two directions: above budget and above prior year. In the late summer months, most regions performed favorably to budget targets, but expense variability also has increased as variability has increased relative to patient volumes. This demonstrates that most regions have created budgets that lack the requisite flexibility to accommodate the ebbs and flows of patient demand. Many budgets rely on prior year's performance to inform the current year's budget, but not enough weight is being given to the prior year's patient volume variability. Performance-to-budget will be monitored closely in upcoming issues of the National Hospital Flash Report, as the most variable months for patient volumes typically occur in the winter for most regions.
Labor
Non-Labor
Supply
Drug
Purchased Service
FTE/AOB
Labor Expense
Non-Labor Expense
Supply Expense
Drug Expense
Purchased Service Expense
FTE per AOB
National Expense Observations
For the third month in a row, nearly all November expense metrics demonstrated unfavorable results. The exception was FTEs per Adjusted Occupied Bed (AOB) when compared to the prior year's actuals. For the past three months, the majority of expense metrics have been unfavorable—in particular, Total Expense per Adjusted Discharge, Labor Expense per Adjusted Discharge, and FTEs per AOB. Most patient volumes in November, however, were below both budget and the prior year. The whisker plot for Average Length of Stay (in the Volume section), shows that the upper bound exceeds 30 percent. This upper bound rarely exceeded 20 percent in previous months—so while there were fewer patients than anticipated in November, the Average Length of Stay was at least 10 percent greater than in recent months. This increase in Average Length of Stay is the key driver to November’s unfavorable expense results. The lower bound of Average Length of Stay falls somewhere between (-30) percent and (-20) percent, compared to less than (-30) percent the two previous months. These shifts on both ends of the scale show that the overall distribution of Average Length of Stay data has changed more than the expected Average Length of Stay.
Unless noted, figures are Actuals and Medians
Budget Variance
Month Over Month
Year Over Year
Year Over Year Distributions
(Click to enlarge)
Total Expense per Adj. Discharge
2.8%
1.9%
1.5%
total_expense.svg
Labor Expense per Adj. Discharge
1.1%
2.1%
0.5%
labor_expense.svg
FTEs per AOB
2.0%
2.8%
(0.8%)
fte_per_aob.svg
Non-Labor Exp per Adj. Discharge
4.2%
5.4%
3.3%
non_labor.svg
Supply Expense per Adj. Discharge
2.0%
1.1%
3.4%
supply.svg
Drug Expense per Adj. Discharge
0.0%
1.1%
3.0%
drug.svg
Purchased Service Exp per Adj. Discharge
4.1%
7.5%
1.5%
purchased_service.svg
By Region
By Bed Size
National Observations
Expense by Bed Size
Looking at hospitals by bed size, Total Expense per Adjusted Discharge also shows most organizations performing unfavorably to budget and the prior year. The two outliers within this metric are hospitals with 0-25 beds, and hospitals with 200-299 beds. Hospitals with 0-25 beds were about 3 percent over budget and 8 percent over the prior year, and hospitals with 200-299 beds were about 6 percent over budget and 2 percent over prior year. Labor Expense per Adjusted Discharge displayed favorable performance for hospitals of >500 beds, 100-199 beds, and 300-499 beds. Those mid- to large-size hospitals performed very well within this metric. In terms of overall performance, however, 0-25 bed hospitals performed above budget and prior year for all metrics, with the exception of FTEs per AOB.
Labor
Non-Labor
Supply
Drug
Purchased Service
FTE/AOB
Labor Expense
Non-Labor Expense
Supply Expense
Drug Expense
Purchased Service Expense
FTE per AOB
By Region
By Bed Size
National Observations
©2018 Kaufman, Hall & Associates, LLC
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