October 2018
Expense
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National Expense Observations
The months of July and August were very strong across the board for expense management. Metrics such as Total Expense per Adjusted Discharge, Labor Expense per Adjusted Discharge, FTEs per AOB, and others were all favorable at the national level when compared to budget and the prior year's performance. This performance likely was reflective of a combination of certain organizations' narrow focus on starting their new fiscal year strong, and below-average, low-variability patient volumes.
Patient volumes tended to decrease and feature greater variability in September, as organizations were a few months removed from keeping as close an eye on their budgets. As a result, September was the first time in several months where Total Expense per Adjusted Discharge, Labor Expense per Adjusted Discharge, FTEs per AOB, and Non-Labor Expense per Adjusted Discharge were unfavorable compared to budget. All of these metrics also were unfavorable when compared to the prior year's actual performance, with the exception of FTEs per AOB. This is indicative of organizations' inability to budget and align operations that flex with fluctuations in patient volumes. Looking forward, the late-Fall to early-Winter months historically display increased variability.
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