What is the purpose of operating analysis? How is it different from standard financial statement analysis?

Profit indicators: Discuss the trends in the $2$ indicators. What is driving the trends? How are they

doing against their competitors?

Net price indicators: Discuss these key price indicators. What do the indicators tell us about the direction of the

business? Are they performing adequately versus their competition? What are the key business forces at play?

Volume indicators: What do the volume indicators tell us about the hospital's use of its investment in fixed assets?

Length of stay indicators: Discuss these indicators. What do the indicators tell us about the direction of the

business? Are they performing adequately versus their competition? What are the key business forces at play?

What are the possible implications to patients?

Intensity of service indicators: Discuss these indicators. What do the indicators tell us about the direction of the

business? Are they performing adequately versus their competition? What are the key business forces at play?

Consider how the hospital allocates overhead between departments.

Efficiency indicators: What do these indicators tell us about how well the hospital is using its available facilities and staff?

Unit cost indicators: Are they structural cost concerns that management should address? $2013$ Industry Data $(200-299$ Beds$)2017$ Industry $2015$ Hospital

$201520162017+$Quartile Median $-$Quartile Data Performance

Profit Indicators

Profit per inpatient discharge $$280\mathrm{.}03$ $$126\mathrm{.}72$ $$79\mathrm{.}61$ $$89\mathrm{.}04($$$21\mathrm{.}30)($$$120\mathrm{.}08)$ Average $-$$$153\mathrm{.}30$

Profit per outpatient visit $($$$33\mathrm{.}07)($$$24\mathrm{.}49)($$$1\mathrm{.}60)$ $$6\mathrm{.}22$ $$0\mathrm{.}66($$$7\mathrm{.}01)$ Average $$8\mathrm{.}59$

Net Revenue Indicators

Net revenue per discharge $$2,622$ $$2,799$ $$2,968$ $$4,091$ $$3,411$ $$2,815$ Average $$176\mathrm{.}99$

Net revenue per visit $$179$ $$222$ $$248$ $$201$ $$139$ $$98$ Better $$43\mathrm{.}31$

Medicare revenue percentage $30\mathrm{.}98\%34\mathrm{.}38\%31\mathrm{.}96\%43\mathrm{.}47\%36\mathrm{.}60\%31\mathrm{.}25\%$ Average $3\mathrm{.}41\%$

Bad debt $/$ charity care percentage $6\mathrm{.}51\%6\mathrm{.}55\%6\mathrm{.}71\%7\mathrm{.}89\%4\mathrm{.}76\%2\mathrm{.}97\%$ Average $0\mathrm{.}03\%$

Contractual allowance percentage $5\mathrm{.}30\%13\mathrm{.}57\%16\mathrm{.}65\%25\mathrm{.}27\%20\mathrm{.}02\%12\mathrm{.}12\%$ Average $8\mathrm{.}28\%$

Outpatient revenue percentage $20\mathrm{.}01\%23\mathrm{.}85\%26\mathrm{.}40\%25\mathrm{.}26\%21\mathrm{.}03\%17\mathrm{.}44\%$ Better $3\mathrm{.}84\%$

Volume Indicators

Occupancy rate $62\mathrm{.}58\%59\mathrm{.}01\%61\mathrm{.}66\%67\mathrm{.}12\%58\mathrm{.}10\%47\mathrm{.}84\%$ Average $-3\mathrm{.}57\%$

Average daily census $120\mathrm{.}78116\mathrm{.}26109\mathrm{.}76173\mathrm{.}23144\mathrm{.}73114\mathrm{.}39-4\mathrm{.}52$

Length of Stay Indicators

Average length of stay $($days$)5\mathrm{.}025\mathrm{.}104\mathrm{.}676\mathrm{.}806\mathrm{.}075\mathrm{.}410\mathrm{.}08$

Adjusted length of stay $3\mathrm{.}903\mathrm{.}933\mathrm{.}556\mathrm{.}485\mathrm{.}364\mathrm{.}520\mathrm{.}03$

Expense Indicators

Expense per discharge $$2,342$ $$2,672$ $$2,888$ $$3,937$ $$3,392$ $$2,972$ Better $$330\mathrm{.}30$

Expense per adjusted discharge $$1,820$ $$2,057$ $$2,195$ $$3,417$ $$2,924$ $$2,572$ Better $$236\mathrm{.}84$

Expense per visit $$212$ $$246$ $$250$ $$202\mathrm{.}23$ $$141\mathrm{.}97$ $$111\mathrm{.}53$ Worse $$34\mathrm{.}72$

All$-$payer case$-$mix index $1\mathrm{.}28691\mathrm{.}29931\mathrm{.}31611\mathrm{.}27951\mathrm{.}17561\mathrm{.}02590\mathrm{.}012$

Efficiency Indicators

FTEs per occupied bed $4\mathrm{.}044\mathrm{.}104\mathrm{.}154\mathrm{.}594\mathrm{.}153\mathrm{.}77$ Average $0\mathrm{.}05$

Labor hours$/$visit $7\mathrm{.}889\mathrm{.}449\mathrm{.}248\mathrm{.}665\mathrm{.}844\mathrm{.}68$ Worse $1\mathrm{.}57$

Unit Cost Indicators

Salary per FTE $$20,047$ $$19,923$ $$22,596$ $$24,447$ $$22,517$ $$20,347$ Average $-$$$124\mathrm{.}18$

Fringe benefits percentage $14\mathrm{.}94\%19\mathrm{.}31\%18\mathrm{.}35\%19\mathrm{.}58\%17\mathrm{.}04\%15\mathrm{.}18\%$ Average $4\mathrm{.}37\%$

Liability expense per discharge $$15\mathrm{.}94$ $$24\mathrm{.}16$ $$25\mathrm{.}42$ $$80\mathrm{.}94$ $$42\mathrm{.}05$ $$18\mathrm{.}31$ Average $$8\mathrm{.}23$

Note:

The quartile values are based on the upper and lower numerical values regardless of whether that value is good or bad. The interpretation is left to the analyst.