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February 2019
Expense
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Expense by Region ?
Expense performance varied across different regions. However, most of the KPIs demonstrated a closer spread where all regions performed similarly. Total Expense per Adjusted Discharge centered around the origin for most regions. The West was an exception, demonstrating a major decrease for that metric that was consistent across all expense KPIs for the region. The favorable shift in the West’s expense metrics is likely due to multiple factors, including the decrease in Lengths of Stay, an increase in discharges, and strong expense control. Drug Expense per Adjusted Discharge increased the most for the Great Plains region, which has a lot of of small hospitals. Coupled with the decrease in volume, this illustrates the difficulties of flexing expenses at the nation’s smallest hospitals.
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
Nationally, expense indicators were mixed in January, with a bias toward unfavorable performance. Total Expense per Adjusted Discharge and Patient Day decreased year-over-year and were almost spot-on with budget. Efficiency, as measured by Full Time Equivalents (FTEs) per Adjusted Occupied Bed (AOB) experienced almost no change compared with January 2018, and performed only slightly above budget. The National Hospital Flash Report has shown generally favorable labor expense control over the past year, and January’s results are no different. Non-labor indicators were mostly unfavorable, with the largest year-over-year growth occurring with supplies. Surprisingly, drug expenses were down slightly compared with January 2018. The trend for drug expenses, however, shows an increase over the past year—as explored in the Spotlight year-in-review issue.
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
(0.1%)
1.4%
(1.2%)
total_expense.svg
Labor Expense per Adj. Discharge
(0.1%)
2.1%
(2.1%)
labor.svg
FTEs per AOB
0.3%
(5.1%)
0.0%
fte.svg
Non-Labor Exp per Adj. Discharge
2.0%
3.4%
2.8%
non_labor.svg
Supply Expense per Adj. Discharge
2.5%
0.7%
4.3%
supply.svg
Drug Expense per Adj. Discharge
(9.8%)
3.1%
(1.0%)
drug.svg
Purchased Service Exp per Adj. Discharge
(1.1%)
3.5%
0.5%
purchased_service.svg
By Region
By Bed Size
National Observations
Expense by Bed Size
As with the national and regional results, expense indicators across bed-size cohorts were mixed in January. Total Expense per Adjusted Discharge demonstrated the largest year-over-year increases for 0-25, 26-99, and 300-499 bed hospitals. Increasing expenses for the smallest hospitals reflect their inability to flex down with decreasing volumes, indicating their risk in the current environment. Supply Expense per Adjusted Discharge was generally unfavorable, with almost all bed sizes seeing year-over-year increases, although half of the cohorts were under budget.
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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