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November 2019
Expense
Expense by Region *
All but one region saw year-over-year decreases in Total Expense per Adjusted Discharge in October. The Great Plains was the outlier, up 4.5 percent year over year, but -4.9 percent below budget. The South saw the greatest year-over-year decrease at -1.8 percent, while the remaining regions had year-over-year decreases ranging from -0.2 percent to -0.8 percent.
Labor Expense per Adjusted Discharge ranged from a year-over-year decrease of -3.2 percent for the Midwest to a 5.8 percent increase for the West. The Great Plains saw the greatest variance to budget at -6.7 percent. FTEs per AOB were -14.1 percent below budget, and down -6.2 percent year over year for the Great Plains. The West was the only region to see unfavorable year-over-year performance for this metric, increasing 1.2 percent, but still -2.2 percent below budget. In addition to effectively managing labor expenses to demand, the variance may also reflect significant regional recruitment challenges for clinical positions.
Labor Expense
Non-Labor Expense
Supply Expense
Drug Expense
Purchased Service Expense
FTE per AOB
Non-Labor Expense per Adjusted Discharge varied widely. The Great Plains was up 7.3 percent year over year, and -2.3 percent to budget, while the West was down -3.7 percent year over year and -0.9 percent to budget. Most regions were up year over year and compared to budget for Supply Expense per Adjusted Discharge. The Great Plains saw the greatest increase, up 9.3 percent year over year, while the West was the only region to see a decrease, with Supply Expense per Adjusted Discharge down -5.1 percent year over year. Year-over-year performance for Drug Expense per Adjusted Discharge ranged from a low of -7.4 percent in the West to a high of 11.5 percent in the Northeast/Mid-Atlantic.
Purchased Service Expense per Adjusted Discharge was all over the board. The Midwest and West both were up year over year and above budget expectations, while the Great Plains was up year over year but below budget. These expenses decreased in the South and Northeast/Mid-Atlantic, but were below budget in the South and above budget for the Northeast/Mid-Atlantic.
National Expense Observations
Hospitals across the country saw decreases in labor expenses in October, while most non-labor expenses increased. Total Expense per Adjusted Discharge was down slightly -0.2 percent year over year, and -1.9 percent month over month, performing just below budget at -0.3 percent.
Labor Expense per Adjusted Discharge was down -1.8 percent year over year, and -3.1 percent month over month, performing -2.1 percent below budget. Full-Time Equivalents (FTEs) per Adjusted Occupied Bed (AOB) decreased -3.3 percent compared to October 2018, but increased 1.4 percent compared to September, and was -3.1 percent below budget.
By contrast, Non-labor Expense per Adjusted Discharge was up 1.4 percent over the same period last year and 1.8 percent above budget, but down -1.1 percent month over month. Supply Expense per Adjusted Discharge was up across the board, increasing 3.5 percent year over year, 3.9 percent month over month, and 2.8 percent above budget. Drug Expense per Adjusted Discharge rose 2.2 percent year over year and 1.6 percent month over month, but fell slightly below budget at -0.4 percent. The combined increases of Supply and Drug Expense per Adjusted Discharge may be attributable to an unanticipated seasonality increase in severity. Purchased Service Expense per Adjusted Discharge was up 1.7 percent compared to October 2018. However, this metric fell -4.0 percent compared to September, and was -0.6 percent below budget, driving the negative month-over-month variance in Non-Labor expense.
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
(0.3%)
(1.9%)
(0.2%)
Total_Exp_Per_Adj_Discharge.svg
Labor Expense per Adj. Discharge
(2.1%)
(3.1%)
(1.8%)
Labor_Exp_Per_Adj_Discharge.svg
FTEs per AOB
(3.1%)
1.4%
(3.3%)
FTEs_Per_AOB.svg
Non-Labor Exp per Adj. Discharge
1.8%
(1.1%)
1.4%
Non_Labor_Exp_Per_Adj_Discharge.svg
Supply Expense per Adj. Discharge
2.8%
3.9%
3.5%
Supply_Exp_Per_Adj_Discharge.svg
Drug Expense per Adj. Discharge
(0.4%)
1.6%
2.2%
Drug_Exp_Per_Adj_Discharge.svg
Purchased Service Exp per Adj. Discharge
(0.6%)
(4.0%)
1.7%
Purchased_Service_Exp_Per_Adj_Discharge.svg
Expense by Bed Size
Total Expense per Adjusted Discharge varied widely across hospitals of different bed sizes. Hospitals with 300-499 beds were down -3.9 percent year over year and -2.5 percent to budget, while hospitals with 200-299 beds were up 2.25 percent year over year and 0.5 percent to budget.
All bed-size cohorts were down year over year for Labor Expense per Adjusted Discharge and FTEs per AOB. Hospitals with 100-199 beds saw the greatest decrease in Labor Expense per Adjusted Discharge at -2.3 percent, followed closely by 26-99 bed facilities with -2.2 percent. For FTEs per AOB, the smallest hospitals of 0-25 beds saw the most significant year-over-year decrease of -9.3 percent.
Labor Expense
Non-Labor Expense
Supply Expense
Drug Expense
Purchased Service Expense
FTE per AOB
Non-Labor Expense per Adjusted Discharge also varied widely, with 200-299 bed hospitals seeing the greatest year-over-year increase at 3.6 percent, and hospitals with 500 beds or more seeing the largest year-over-year decrease at -3.3 percent. Mid-sized hospitals with 100-199 beds saw the biggest year-over-year jump in Supply Expense per Adjusted Discharge at 8.5 percent, while hospitals with 300-499 beds saw the only year-over-year decrease for this metric at -1.4 percent.
Drug Expense per Adjusted Discharge was down year over year for the nation’s largest (500 beds or more) and smallest hospitals (0-25 beds), as well as those with 300-499 beds. All other bed-size cohorts saw year-over-year Drug Expense per Adjusted Discharge increases of 5.2 percent or more. Year-over-year performance on Purchased Service Expense per Adjusted Discharge ranged from a low of -4.3 percent for 0-25 bed hospitals, to a high of 10.6 percent for hospitals with 300-499 beds.
©2019 Kaufman, Hall & Associates, LLC
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