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June 2019
Expense
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Expense by Region ?
Total Expenses per Adjusted Discharge were up year over year for all regions, but below budget expectations for all regions except for the West, where they were consistent with budget. Most regions also saw year-over-year increases in Labor Expenses per Adjusted Discharge, except for the Great Plains where they were down about 1 percent compared to May 2018. Labor Expenses per Adjusted Discharge were below budget expectations for most regions, with the most significant variance in the Great Plains, where they were about 29 percent below budget.
FTEs per AOB were essentially flat year over year in the South and West regions, but were down in the Great Plains, Northeast/Mid-Atlantic, and Midwest. The Great Plains, West, and Northeast/Mid-Atlantic all saw year-over-year increases in Non-Labor Expenses per Adjusted Discharge, while they decreased in the South and remained flat in the Midwest.
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
Expense indicators saw mainly favorable performance in May compared to budget and month over month, but unfavorable performance year over year. Total Expense per Adjusted Discharge increased 1.6 percent year over year while decreasing -2.8 percent month over month. Labor Expense per Adjusted Discharge increased by 2.6 percent year over year, contributing to the variance in Total Expense per Adjusted Discharge.
Full-Time Equivalents (FTEs) per Adjusted Occupied Bed (AOB) were down -2.2 percent year over year. These results suggest a potential improvement in skill mix or full-time versus part-time mix for the month. Increased use of agency staff may have contributed to the increase in labor expenses, as Purchased Labor Expenses per Adjusted Discharge were essentially flat compared to April, but up 1.8 percent compared to the same period last year.
Non-Labor Expense per Adjusted Discharge increased 2.8 percent year over year. Both Supply Expense and Drug Expense per Adjusted Discharge saw year-over-year increases, at 6.5 percent and 7.0 percent, respectively. These results suggest that organizations may be managing more severe patients and/or undertaking more complicated and resource-heavy procedures. Healthcare’s supply chain has focused on supply and pharmaceutical contract pricing for years, but the industry likely needs to do more to engage clinicians to control utilization to curb expense growth in these areas.
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
(2.2%)
(2.8%)
1.6%
total_expense_per_adj_discharge.svg
Labor Expense per Adj. Discharge
(3.5%)
(2.4%)
2.6%
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FTEs per AOB
(3.5%)
(0.3%)
(2.2%)
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Non-Labor Exp per Adj. Discharge
(1.5%)
(2.1%)
2.8%
non_labor.svg
Supply Expense per Adj. Discharge
(0.9%)
(0.9%)
6.5%
supply.svg
Drug Expense per Adj. Discharge
(1.5%)
0.3%
7.0%
drug.svg
Purchased Service Exp per Adj. Discharge
(3.1%)
(0.1%)
1.8%
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By Region
By Bed Size
National Observations
Expense by Bed Size
Total Expenses per Adjusted Discharge were up year over year for most bed-size cohorts, with the largest increase of about 7 percent occurring for the nation’s smallest hospitals (0-25 beds). Medium-sized hospitals were the exception, as Total Expenses per Adjusted Discharge were down nearly 2 percent year over year for 100-199 bed hospitals, and essentially flat for 200-299 bed hospitals.
FTEs per AOB were favorable, decreasing year over year for most bed-size hospitals, except for hospitals with 26-99 beds, where they increased 1 percent year over year. Labor Expenses per Adjusted Discharge, however, were up year over year for all bed-size cohorts, but below budget for most. Hospitals with 300-499 beds were the exception, with Labor Expense per Adjusted Discharge about 2 percent above budget expectations in May.
Non-Labor Expenses per Adjusted Discharge increased year over year for most bed-size cohorts, but declined about 1 percent year over year for 200-299 bed hospitals and about 4.5 percent for hospitals with 100-199 beds.
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
©2019 Kaufman, Hall & Associates, LLC
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