June 2020
Expense
Expense by Region *
Hospitals across all regions saw increases both year-over-year and to budget for five key metrics: Total Expense per Adjusted Discharge, Labor Expense per Adjusted Discharge, Full-Time Equivalents (FTEs) per Adjusted Occupied Bed (AOB), Non-Labor Expense per Adjusted Discharge, and Purchased Service Expense per Adjusted Discharge.
The Northeast/Mid-Atlantic had the largest increases across all expense metrics. For Total Expense per Adjusted Discharge, hospitals in the region were up 66% year-over-year and 51% above budget, while hospitals in the South saw the lowest increases of 21% year-over-year and 19% to budget.
Labor Expense
Non-Labor Expense
Supply Expense
Drug Expense
Purchased Service Expense
FTE per AOB
The Northeast/Mid-Atlantic rose 67% year-over-year and 56% above budget for Labor Expense per Adjusted Discharge, while the West was up just 22% year-over-year and 26% above budget. For Non-Labor Expense per Adjusted Discharge, the Northeast/Mid-Atlantic saw increases of 62% year-over-year and 50% to budget, while hospitals in the West had the lowest increases.
Results were more varied for Supply Expense and Drug Expense per Adjusted Discharge. For Supply Expense per Adjusted Discharge, the Northeast/Mid-Atlantic jumped 26% year-over-year and 15% above budget. The Midwest was the only metric to fall below budget for this metric, but was essentially flat year-over-year.
Hospitals in the Northeast/Mid-Atlantic again saw the greatest increases for Drug Expense per Adjusted Discharge, up 39% year-over-year and 36% above budget. The Midwest and Great Plains both were up about 10% year-over-year, but fell in line with budget expectations, while the South was flat year-over-year, but fell 5% below budget.
National Expense Observations
Expenses were mixed in May, with many hospitals driving year-over-year decreases across actual expenses with the implementation of furloughs and other aggressive cost control actions. Volume-adjusted expenses increased, however, as organizations continued to struggle to match the pace of lost volumes.
Total Expense was up slightly, about 1% month-over-month, but decreased 6% year-over-year and fell 8% below budget. Total Labor Expense rose 2% compared to April but fell 3% compared to May 2019, and was 7% below budget, while Total Non-Labor Expense rose less than 1% month-over-month, but fell 7% year-over-year and 9% below budget. Supply Expense saw the biggest year-over-year decrease at 23%, but was up 5% month-over-month and 24% below budget.
Looking at adjusted expenses, Total Expense per Adjusted Discharge increased 31% year-over-year but fell 19% month-over-month, and was 27% above budget. Labor Expense per Adjusted Discharge increased 33% year-over-year and fell 19% month-over-month, while Non-Labor Expense per Adjusted Discharge rose 30% year-over year, but fell 20% month-over-month.
Purchased Service Expense per Adjusted Discharge saw the biggest year-over-year increase at 35% and was 32% above budget expectations, but fell 25% month-over-month.
Unless noted, figures are Actuals and Medians
Budget Variance
Month Over Month
Year Over Year
Year Over Year Distributions
(Click to enlarge)
Total Expense
(7.8%)
0.8%
(6.2%)
total_expense.svg
Total Labor Expense
(6.5%)
2.0%
(3.3%)
total_labor_expense.svg
Total Non-Labor Expense
(9.1%)
0.5%
(7.3%)
total_non_labor_expense.svg
Supply Expense
(23.5%)
5.0%
(22.7%)
supply_expense.svg
Drugs Expense
(24.2%)
(12.4%)
(21.1%)
drugs_expense.svg
Purchased Service Expense
(5.9%)
(5.4%)
(6.3%)
purchased_service_expense.svg
Total Expense per Adjusted Discharge
26.8%
(19.3%)
31.4%
total_expense_per_adj_discharge.svg
Labor Expense per Adjusted Discharge
28.9%
(18.5%)
33.4%
labor_expense_per_adj_discharge.svg
FTEs per AOB
14.8%
(18.5%)
17.4%
ftes_per_aob.svg
Non-Labor Expense per Adj. Discharge
25.2%
(20.1%)
29.6%
non_labor_expense_per_adj_discharge.svg
Supply Expense per Adjusted Discharge
2.5%
(14.9%)
5.1%
supply_expense_per_adj_discharge.svg
Drug Expense per Adjusted Discharge
4.5%
(28.7%)
9.6%
drug_expense_per_adj_discharge.svg
Purchased Service Expense per Adjusted Discharge
31.8%
(24.9%)
34.9%
purchased_service_expense_per_adj_discharge.svg
Expense by Bed Size
Expenses were up year-over-year and compared to budget for all bed-size cohorts across most measures in May, including Total Expense, Labor Expense, Non-Labor Expense, and Purchased Service Expense per Adjusted Discharge, as well as FTEs per AOB.
Hospitals with 100-199 beds saw the greatest increases for Total Expense per Adjusted Discharge, jumping 36% both year-over-year and to budget, and for Labor Expense per Adjusted Discharge, where they increased 36% both year-over-year and to budget. The smallest hospitals with 0-25 beds saw the greatest year-over-year increase for FTEs per AOB (up 24%), while hospitals with 200-299 beds saw the greatest increase to budget at 25%.
Labor Expense
Non-Labor Expense
Supply Expense
Drug Expense
Purchased Service Expense
FTE per AOB
Mid-sized hospitals with 200-299 beds saw the greatest increases for Non-Labor Expense per Adjusted Discharge, rising 39% compared to May 2019 and 33% above budget expectations. The cohort also had the largest year-over-year increases for both Drug Expense and Purchased Service Expense per Adjusted Discharge at 18% and 51%, respectively.
Results for Supply Expense per Adjusted Discharge varied somewhat, with four of six cohorts seeing increases both year-over-year and to budget. Hospitals with 300-499 beds, however, were up just 1% year-over-year and essentially flat compared to budget, while hospitals with 26-99 beds were up 4% year-over-year, but were the only cohort to fall below budget, down 6%.
For Drug Expense per Adjusted Discharge, four cohorts were up compared to prior year and to budget, while hospitals with 0-25 beds were down for both measures, and hospitals with 26-99 beds were up year-over-year, but below budget.
©2020 Kaufman, Hall & Associates, LLC
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