hi, i ned help solving for some operating metrics such as:
a. net revenue per discharge
b. net revenue per visit
c. FTEs per occupied bed
d. labor hours/visit
thanks!!!
more than a way to summarize an organization's financial and operat- ing performance. Of course, the name stems from an automobile's dashboard, which contains gauges that give drivers essential information about the car's performance and operating condition. Thus, you plan to develop two dashboards, each containing no more than five KPIs. One dashboard will use financial ratios to focus on financial performance, while the other will use operating indicator ratios to focus on operating performance. You plan to present your recommendations for the con- tents of these dashboards, along with the rationale for the ratios chosen, at the board meeting. Your ultimate goal is to replace the full financial and operating performance discussion at future board meetings with a limited discussion of the KPIs. 2011 2012 2013 EXHIBIT 1.1 River Community Hospital: Statements of Operations (millions of dollars) Revenues Net patient service revenue Other revenue Total revenues $28.796 $1.237 $30.033 $30.576 $1.853 $32.429 $34.582 $1.834 $36.416 Expenses Salaries and wages Fringe benefits Interest expense Depreciation Medical supplies and drugs Professional liability Other Total expenses $12.245 $1.830 $1.181 $2.350 $0.622 $0.140 $9.036 $27.404 $12.468 $2.408 $1.598 $2.658 $0.655 $0.201 $10.339 $30.327 $13.994 $2.568 $1.776 $2.778 $0.776 $0.218 $11.848 $33.958 Net income $2.629 $2.102 $2.458 2011 2012 2013 EXHIBIT 1.2 River Community Hospital: Balance Sheets (millions of dollars) $2.795 Assets Cash and investments Accounts receivable Inet) Inventories Other current assets Total current assets Gross plant and equipment Accumulated depreciation Net plant and equipment Total assets $4.673 $4.359 $0.432 $0.308 $9.772 $47.786 $11.820 $35.966 $45.738 $5.069 $5.674 $0.523 $0.703 $11.969 $55.333 $14.338 $40.995 $52.964 $7.413 $0.601 $0.923 $11.732 $59.552 $17.009 $42.543 $54.275 Liabilities and Net Assets Accounts payable Accrued expenses Current portion of LT debt Total current liabilities Long-term debt Net assets Total liabilities and net assets $0.928 $1.460 $0.110 $2.498 $15.673 $27.567 $45.738 $1.253 $1.503 $1.341 $4.097 $19.222 $29.645 $52.964 $1.760 $1.176 $1.465 $4.401 $17.795 $32.079 $54.275 LT long term 2012 2013 EXHIBIT 1.3 River Community Hospital: Statements of Cash Flows (millions of dollars) Cash Flows from Operating Activities Net income Depreciation and noncash expenses Change in accounts receivable Change in inventories Change in other current assets Change in accounts payable Change in accrued expenses Net cash flow from operations $2.102 $2.633 ($1.315) ($0.091) ($0.395) $0.325 $0.043 $3.302 $2.458 $2.756 ($1.739) ($0.078) ($0.220) $0.507 ($0.327) $3.357 Cash Flows from Investing Activities Investment in plant and equipment ($7.686) ($4.328) $3.549 ($1.427) Cash Flows from Financing Activities Change in long-term debt Change in current portion of long-term debt Net cash flow from financing $1.231 $4.780 $0.124 ($1.303) Net increase (decrease) in cash $0.396 ($2.274) Beginning cash $4.673 $5.069 Ending cash $5.069 $2.795 Note: "Depreciation and noncash expenses" and Investment in plant and equipment" data in the statements of cash flows are somewhat different than they would be if calculated directly from the other financial statements because of asset revaluations Case 1: Riverview Community Hospital (A) 9 2011 2012 2013 Operating revenue Gross inpatient service Gross outpatient service Gross patient service revenue EXHIBIT 1.4 River Community Hospital: Revenue and Expense Allocation (millions of dollars) $26.117 $6.535 $32.652 $29.148 $9.130 $38.278 $33.216 $11.912 $45.128 Contractual allowances Bad debt and charity care Total revenue deductions $1.729 $2.127 $3.856 $5.196 $2.506 $7.702 $7.516 $3.030 $10.546 Net patient service revenue $28.796 $30,576 $34.582 Operating expenses Inpatient service Outpatient service Total operating expenses $20.573 $6.831 $27.404 $22.229 $8.098 $30.327 $24.771 $9.187 $33.958 2011 2012 2013 EXHIBIT 1.5 River Community Hospital: Selected Operating Data Medicare discharges Total discharges Outpatient visits Licensed beds Staffed beds Patient days All payer case mix index Full-time equivalents 2,721 8,784 32,285 210 193 44,085 1.2869 610.8 2,860 8,318 32,878 210 197 42,434 1.2993 625.8 2,741 8,576 36,796 210 178 40,062 1.3161 619.3 +Quartile Median -Quartile EXHIBIT 1.6 2013 Selected Industry Financial Ratios (200-299 beds) Profitability Ratios Total margin Return on assets Return on equity Deductible ratio 5.58% 5.80% 15.66% 0.34 3.48% 3.10% 6.01% 0.26 0.53% 0.40% 0.62% 0.18 Liquidity Ratios Current ratio Days cash on hand 2.53 32.35 1.99 15.89 1.48 6.24 Debt Management Ratios Debt ratio Debt to equity ratio Times interest earned Cash flow coverage 62.90% 127.00% 4.29 5.32 48.40% 64.70% 2.23 3.22 35.20% 26.90% 1.14 1.76 1.49 0.75 1.04 Asset Management Ratios Fixed asset turnover Total asset turnover Days in patient accounts receivable Current asset turnover Average payment period (days) 87.53 3.94 63.33 2.88 45.84 71.24 Other Ratios Average age of plant (years) 8.86 7.39 6.14 "Deductions/Gross patient service revenue Total revenues/Current assets "Current liabilities/Total expenses-depreciation expense 365 Notes: 1. The industry data shown here are for illustrative purposes only and hence should not be used outside this case 2. The upper quartile is based on the higher numerical value for the ratio and the lower quartile on the lower numerical value, regardless of whether a high value is good or bad. The interpretation is left to the analyst. +Quartile Median Quartile EXHIBIT 1.7 2013 Selected Industry Operating Ratios (200-299 Beds) Profit Indicators Profit per discharge Profit per visit $89.04 $6.22 $21.30) $0.66 ($120.08) $7.01) Net Revenue Indicators Net revenue per discharge Net revenue per visit Medicare revenue percentage Bad debt/charity care percentage Contractual allowance percentage Outpatient revenue percentage $4,091 $201 43.47% 7.89% 25.27% 25.26% $3,411 $139 36.60% 4.76% 20.02% 21.03% $2,815 $98 31.25% 297% 12.12% 1744% Volume Indicators Occupancy rate Average daily census 67.12% 173.23 58.10% 144.73 4784% 114.39 Length-of-Stay Indicators Average length of stay days) Adjusted length of stay 6.80 6.48 6.07 5.36 5.41 4.52 Intensity-of-Service Indicators Expense per discharge Adjusted expense per discharge Expense per visit All payer case mix index $3,937 $3,417 $202.23 1.2795 $3,392 $2,924 $141.97 1.1756 $2.972 $2,572 $111.53 1.0259 Efficiency Indicators FTES per occupied bed Labor hours per visit 4.59 4.68 4.15 5.84 3.77 8.66 Unit Cost Indicators Salary per FTE Employee benefits percentage! Liability expense per discharge $24,447 19.58% $80.94 $22,517 17.04% $42.05 $20,347 15.18% $18.31 "Net inpatient revenue - Inpatient expenses/Total discharges iNet outpatient revenue - Outpatient expenses/Total Visits EXHIBIT 1.7 (continued) 2013 Selected Industry Operating Ratios (200-299 Beds) Net inpatient revenue/Total discharges Net outpatient revenue/Total visits Medicare net patient revenue/Total net patient revenue (Bad debt + Charity carel/Gross patient revenue Contractual allowances/Gross patient revenue "Net outpatient revenue/Total net patient revenue Patient days/Staffed beds X 365) Patient days/365 Patient days/Total discharges Average length of stay/Case mix index Inpatient expenses/Total discharges "Expense per discharge/Case mix index Outpatient expenses/Total Visits Sum of DRG weights/Total discharges Inpatient FTES/Average daily census (Outpatient FTES x 2,0801/Total Visits *Total salaries/Total FTES 'Fringe benefit expense/Total salaries Inpatient professional liability expense/Total discharges DRG: diagnosis-related group: FTE: full-time equivalent Notes: 1. The industry data shown here are for illustrative purposes only and hence should not be used outside this case. 2. The upper quartile is based on the higher numerical value for the ratio and the lower quartile on the lower numerical value, regardless of whether a high value is good or bad. The interpretation is left to the analyst. more than a way to summarize an organization's financial and operat- ing performance. Of course, the name stems from an automobile's dashboard, which contains gauges that give drivers essential information about the car's performance and operating condition. Thus, you plan to develop two dashboards, each containing no more than five KPIs. One dashboard will use financial ratios to focus on financial performance, while the other will use operating indicator ratios to focus on operating performance. You plan to present your recommendations for the con- tents of these dashboards, along with the rationale for the ratios chosen, at the board meeting. Your ultimate goal is to replace the full financial and operating performance discussion at future board meetings with a limited discussion of the KPIs. 2011 2012 2013 EXHIBIT 1.1 River Community Hospital: Statements of Operations (millions of dollars) Revenues Net patient service revenue Other revenue Total revenues $28.796 $1.237 $30.033 $30.576 $1.853 $32.429 $34.582 $1.834 $36.416 Expenses Salaries and wages Fringe benefits Interest expense Depreciation Medical supplies and drugs Professional liability Other Total expenses $12.245 $1.830 $1.181 $2.350 $0.622 $0.140 $9.036 $27.404 $12.468 $2.408 $1.598 $2.658 $0.655 $0.201 $10.339 $30.327 $13.994 $2.568 $1.776 $2.778 $0.776 $0.218 $11.848 $33.958 Net income $2.629 $2.102 $2.458 2011 2012 2013 EXHIBIT 1.2 River Community Hospital: Balance Sheets (millions of dollars) $2.795 Assets Cash and investments Accounts receivable Inet) Inventories Other current assets Total current assets Gross plant and equipment Accumulated depreciation Net plant and equipment Total assets $4.673 $4.359 $0.432 $0.308 $9.772 $47.786 $11.820 $35.966 $45.738 $5.069 $5.674 $0.523 $0.703 $11.969 $55.333 $14.338 $40.995 $52.964 $7.413 $0.601 $0.923 $11.732 $59.552 $17.009 $42.543 $54.275 Liabilities and Net Assets Accounts payable Accrued expenses Current portion of LT debt Total current liabilities Long-term debt Net assets Total liabilities and net assets $0.928 $1.460 $0.110 $2.498 $15.673 $27.567 $45.738 $1.253 $1.503 $1.341 $4.097 $19.222 $29.645 $52.964 $1.760 $1.176 $1.465 $4.401 $17.795 $32.079 $54.275 LT long term 2012 2013 EXHIBIT 1.3 River Community Hospital: Statements of Cash Flows (millions of dollars) Cash Flows from Operating Activities Net income Depreciation and noncash expenses Change in accounts receivable Change in inventories Change in other current assets Change in accounts payable Change in accrued expenses Net cash flow from operations $2.102 $2.633 ($1.315) ($0.091) ($0.395) $0.325 $0.043 $3.302 $2.458 $2.756 ($1.739) ($0.078) ($0.220) $0.507 ($0.327) $3.357 Cash Flows from Investing Activities Investment in plant and equipment ($7.686) ($4.328) $3.549 ($1.427) Cash Flows from Financing Activities Change in long-term debt Change in current portion of long-term debt Net cash flow from financing $1.231 $4.780 $0.124 ($1.303) Net increase (decrease) in cash $0.396 ($2.274) Beginning cash $4.673 $5.069 Ending cash $5.069 $2.795 Note: "Depreciation and noncash expenses" and Investment in plant and equipment" data in the statements of cash flows are somewhat different than they would be if calculated directly from the other financial statements because of asset revaluations Case 1: Riverview Community Hospital (A) 9 2011 2012 2013 Operating revenue Gross inpatient service Gross outpatient service Gross patient service revenue EXHIBIT 1.4 River Community Hospital: Revenue and Expense Allocation (millions of dollars) $26.117 $6.535 $32.652 $29.148 $9.130 $38.278 $33.216 $11.912 $45.128 Contractual allowances Bad debt and charity care Total revenue deductions $1.729 $2.127 $3.856 $5.196 $2.506 $7.702 $7.516 $3.030 $10.546 Net patient service revenue $28.796 $30,576 $34.582 Operating expenses Inpatient service Outpatient service Total operating expenses $20.573 $6.831 $27.404 $22.229 $8.098 $30.327 $24.771 $9.187 $33.958 2011 2012 2013 EXHIBIT 1.5 River Community Hospital: Selected Operating Data Medicare discharges Total discharges Outpatient visits Licensed beds Staffed beds Patient days All payer case mix index Full-time equivalents 2,721 8,784 32,285 210 193 44,085 1.2869 610.8 2,860 8,318 32,878 210 197 42,434 1.2993 625.8 2,741 8,576 36,796 210 178 40,062 1.3161 619.3 +Quartile Median -Quartile EXHIBIT 1.6 2013 Selected Industry Financial Ratios (200-299 beds) Profitability Ratios Total margin Return on assets Return on equity Deductible ratio 5.58% 5.80% 15.66% 0.34 3.48% 3.10% 6.01% 0.26 0.53% 0.40% 0.62% 0.18 Liquidity Ratios Current ratio Days cash on hand 2.53 32.35 1.99 15.89 1.48 6.24 Debt Management Ratios Debt ratio Debt to equity ratio Times interest earned Cash flow coverage 62.90% 127.00% 4.29 5.32 48.40% 64.70% 2.23 3.22 35.20% 26.90% 1.14 1.76 1.49 0.75 1.04 Asset Management Ratios Fixed asset turnover Total asset turnover Days in patient accounts receivable Current asset turnover Average payment period (days) 87.53 3.94 63.33 2.88 45.84 71.24 Other Ratios Average age of plant (years) 8.86 7.39 6.14 "Deductions/Gross patient service revenue Total revenues/Current assets "Current liabilities/Total expenses-depreciation expense 365 Notes: 1. The industry data shown here are for illustrative purposes only and hence should not be used outside this case 2. The upper quartile is based on the higher numerical value for the ratio and the lower quartile on the lower numerical value, regardless of whether a high value is good or bad. The interpretation is left to the analyst. +Quartile Median Quartile EXHIBIT 1.7 2013 Selected Industry Operating Ratios (200-299 Beds) Profit Indicators Profit per discharge Profit per visit $89.04 $6.22 $21.30) $0.66 ($120.08) $7.01) Net Revenue Indicators Net revenue per discharge Net revenue per visit Medicare revenue percentage Bad debt/charity care percentage Contractual allowance percentage Outpatient revenue percentage $4,091 $201 43.47% 7.89% 25.27% 25.26% $3,411 $139 36.60% 4.76% 20.02% 21.03% $2,815 $98 31.25% 297% 12.12% 1744% Volume Indicators Occupancy rate Average daily census 67.12% 173.23 58.10% 144.73 4784% 114.39 Length-of-Stay Indicators Average length of stay days) Adjusted length of stay 6.80 6.48 6.07 5.36 5.41 4.52 Intensity-of-Service Indicators Expense per discharge Adjusted expense per discharge Expense per visit All payer case mix index $3,937 $3,417 $202.23 1.2795 $3,392 $2,924 $141.97 1.1756 $2.972 $2,572 $111.53 1.0259 Efficiency Indicators FTES per occupied bed Labor hours per visit 4.59 4.68 4.15 5.84 3.77 8.66 Unit Cost Indicators Salary per FTE Employee benefits percentage! Liability expense per discharge $24,447 19.58% $80.94 $22,517 17.04% $42.05 $20,347 15.18% $18.31 "Net inpatient revenue - Inpatient expenses/Total discharges iNet outpatient revenue - Outpatient expenses/Total Visits EXHIBIT 1.7 (continued) 2013 Selected Industry Operating Ratios (200-299 Beds) Net inpatient revenue/Total discharges Net outpatient revenue/Total visits Medicare net patient revenue/Total net patient revenue (Bad debt + Charity carel/Gross patient revenue Contractual allowances/Gross patient revenue "Net outpatient revenue/Total net patient revenue Patient days/Staffed beds X 365) Patient days/365 Patient days/Total discharges Average length of stay/Case mix index Inpatient expenses/Total discharges "Expense per discharge/Case mix index Outpatient expenses/Total Visits Sum of DRG weights/Total discharges Inpatient FTES/Average daily census (Outpatient FTES x 2,0801/Total Visits *Total salaries/Total FTES 'Fringe benefit expense/Total salaries Inpatient professional liability expense/Total discharges DRG: diagnosis-related group: FTE: full-time equivalent Notes: 1. The industry data shown here are for illustrative purposes only and hence should not be used outside this case. 2. The upper quartile is based on the higher numerical value for the ratio and the lower quartile on the lower numerical value, regardless of whether a high value is good or bad. The interpretation is left to the analyst
