April 2020
Expense
Expense by Region *
Hospitals in all regions of the country saw both year-over-year and to budget increases across all expense metrics in March. The Midwest had the greatest increases in Total Expense per Adjusted Discharge, jumping 25% year-over-year and 27% to budget, while the South had the smallest increases at 14% year-over-year and 13% to budget.
Increases in Labor Expense per Adjusted Discharge reached highs of 24% year-over-year in the West, and 28% to budget in the Midwest. The West had the greatest year-over-year increase in FTEs per AOB at 19%, and the Northeast/Mid-Atlantic had the greatest increase to budget of 17%.
Labor Expense
Non-Labor Expense
Supply Expense
Drug Expense
Purchased Service Expense
FTE per AOB
Looking at Non-Labor Expense per Adjusted Discharge, hospitals in the Midwest had the biggest increases at 27% year-over-year and 23% to budget. Supply Expense per Adjusted Discharge results clustered between 17% and 21% year-over-year for hospitals in four out of five regions. The increases were lower in the South, however, at 10% year-over-year and 7% to budget.
Year-over-year increases in Drug Expense per Adjusted Discharge ranged from 24% in the West to a high of 42% in the Northeast/Mid-Atlantic, and increases to budget ranged from 14% in the Great Plains to 21% in the West. The Midwest had the highest increases in Purchased Service Expense per Adjusted Discharge at 31% year-over-year and 26% to budget.
The South and West saw the greatest increases in Total Labor Expense, up 5% year-over-year, while the Great Plains had the biggest year-over-year increase in Total Non-Labor Expense at 6%.
National Expense Observations
The nation’s hospitals continued to incur high expenses in March, despite seeing far fewer patients. Expense results for the month reflect organizations’ efforts to rapidly build staffing, drugs, supplies, and capacity in response to the COVID-19 pandemic. Total Labor Expense was up 3% year-over-year and 4% month-over-month, and was just 1% below budget. Total Non-Labor Expense was up 1% both year-over-year and month-over-month, and was 3% below budget.
Hospitals experienced double-digit variance increases across all expense metrics per unit of service for the month. Total Expense per Adjusted Discharge jumped 18% compared to March 2019 and 12% compared to February, and was 17% above budget expectations.
Labor Expense per Adjusted Discharge followed a similar pattern, increasing 18% year-over-year and 14% month-over-month, and ending the month 18% above budget. Full-Time Equivalents (FTEs) per Adjusted Occupied Bed (AOB) rose 16% year-over-year and 17% month-over-month.
Non-Labor Expense per Adjusted Discharge rose 19% year-over-year and 10% month-over-month, and was 16% above budget. Supply Expense per Adjusted Discharge increased 15% year-over-year and 9% month-over-month, while Purchased Service Expense per Adjusted Discharge increased 22% year-over-year and 8% month-over-month. Drug Expense per Adjusted Discharge saw the largest increases of any expense metric, jumping 30% compared to the same period last year and 19% above February’s results.
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
17.4%
11.7%
18.2%
total_expense_per_adj_discharge.svg
Labor Expense per Adj. Discharge
17.8%
13.6%
18.3%
labor_expense_per_adj_discharge.svg
FTEs per AOB
12.7%
17.2%
16.0%
ftes_per_aob.svg
Non-Labor Exp per Adj. Discharge
15.7%
10.1%
19.3%
non_labor_expense_per_adj_discharge.svg
Supply Expense per Adj. Discharge
11.8%
9.4%
14.7%
supply_expense_per_adj_discharge.svg
Drug Expense per Adj. Discharge
18.4%
19.0%
30.1%
drug_expense_per_adj_discharge.svg
Purchased Service Exp per Adj. Discharge
18.6%
8.4%
22.4%
purchased_service_expense_per_adj_discharge.svg
Expense by Bed Size
Hospitals of all sizes saw expenses increase to budget and year-over-year across all metrics in March. Year-over-year increases in Total Expense per Adjusted Discharge ranged from a low of 14% for hospitals with 500 beds or more, to a high of 21% for those with 100-199 beds. Increases to budget for this metric ranged from 13% for hospitals with 300-499 beds to 20% for those with 200-299 beds.
The nation’s smallest hospitals of 0-25 beds saw the largest year-over-year increase in Labor Expense per Adjusted Discharge at 21%, while the largest hospitals of 500 beds or more saw the least increase at 13%. Year-over-year variances in FTEs per AOB fell within a similar range, with a high of 19% for hospitals with 500 beds or more, and a low of 14% for hospitals with 300-499 beds.
Labor Expense
Non-Labor Expense
Supply Expense
Drug Expense
Purchased Service Expense
FTE per AOB
Hospitals with 500 beds or more had the lowest year-over-year increase for Non-Labor Expense per Adjusted Discharge at 14%, while hospitals with 0-25, 100-199, and 200-299 beds all saw year-over-year increases of about 22%. This likely is indicative of the largest hospitals’ ability to leverage larger internal inventories and resource pools. Year-over-year Supply Expense per Adjusted Discharge results clustered between 10% and 14% for five of the six bed-size cohorts. The smallest hospitals of 0-25 beds were an outlier, jumping 40% year-over-year and 22% to budget for this metric.
Hospitals with 0-25 beds also saw some of the most dramatic increases in Drug Expense per Adjusted Discharge, up 52% year-over-year and 18% to budget. Hospitals with 200-299 beds saw the most significant increases to budget for this metric at 24%. Year-over-year increases in Purchased Service Expense per Adjusted Discharge ranged from 16% for hospitals with 26-99 beds to 28% for those with 100-199 beds.
©2020 Kaufman, Hall & Associates, LLC
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