September 2018
Expense
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Expense by Region ?
In July, the West was the only region to perform above the prior year's actual performance regarding Total Expense per Adjusted Discharge—this held true again in August. All other regions performed below both budget and the prior year's actual expenses. Also similar to July, the West was the only region with an unfavorable increase in FTEs per AOB at both the budget and previous year's actual performance levels. This again reflects an inability to flex with changing patient volumes. Hospitals in the Northeast/Mid-Atlantic are slowly drifting into unfavorable territory regarding FTE per AOB, as they were slightly above budget and the previous year's actual performance. This indicates that hospitals in those regions have not accurately budgeted and aligned operations to shifting volumes. The Midwest performed above budget, likely due to the fact that volumes were not accurately budgeted.
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
August proved to be another strong month for expenses at the national level. Continuing the trends in June and July, Total Expense per Adjusted Discharge was down compared to budgets and the previous year's actual expenses. Other components of expense—with the exception of FTEs per AOB—shared the same trend as June and July, declining compared to budget and the previous year's actual expenses. FTEs per AOB showed 0 percent variance from budget, but was down 2 percent compared to the previous year. Last month's National Hospital Flash Report predicted that expenses would continue to land below both budget and the previous year's activity. This reflects many hospitals' focus on starting strong in the new fiscal year.
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
(2.6%)
(1.3%)
(2.4%)
Labor Expense per Adj. Discharge
(4.0%)
(3.1%)
(4.1%)
FTEs per AOB
0.0%
(0.6%)
(2.2%)
Non-Labor Exp per Adj. Discharge
(2.5%)
(0.7%)
(1.6%)
Supply Expense per Adj. Discharge
(1.3%)
5.6%
(0.6%)
Drug Expense per Adj. Discharge
(5.1%)
1.1%
(1.1%)
Purchased Service Exp per Adj. Discharge
(1.4%)
(1.6%)
(2.6%)
By Region
By Bed Size
National Observations
Expense by Bed Size
For hospitals with 26-99 beds, Total Expense per Adjusted Discharge was well below both the budget and the prior year's actual expense(s). Hospitals with bed capacities of 0-25, 100-199, and 200-299 were just below their budgeted and prior year's actual expenses. Similar to the July results, larger hospitals (those with 300-499 and 500 or more beds) struggled. Hospitals with 300-499 beds were over budget and slightly below the previous year's actual performance, while hospitals with 500 or more beds were under budget and over the prior year's performance. Results for Supply Expense per Adjusted Discharge, Drug Expense per Adjusted Discharge, and Purchased Service Expense per Adjusted Discharge were scattered. Smaller hospitals with bed capacity below 299 have a tendency to perform below budget and/or prior year's actual expenses. Hospitals with 300 beds or more tend to struggle in these areas, performing above budget and/or prior year's actual expenses. This indicates difficulties in accurately forecasting patient demand, and adequately aligning expenses to complement patient demand.
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
©2018 Kaufman, Hall & Associates, LLC
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