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HMP Metrics™: Childrens Hospitals October, 2010

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HMP can easily create customized reports and mix or create new peer groups and compare them to state or national benchmarks.

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HMP Metrics™: Childrens Hospitals October, 2010

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  2. 2. Table of ContentsExecutive Summary 3-5Financial and Operational Study 6 - 41 • Total Profit Margin 6 - 12 • Total Operating Profit Margin 13 - 17 • Total Labor Cost as a Percentage of Total Operating Revenues 18 - 23 • Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB) 24 - 29 • Days Net Patient Revenue in Accounts Receivable (AR) 30 - 35 • Average Age of Plant and Equipment 36 - 41Introduction to Healthcare Management Partners 42 - 46Clients Our Professionals Have Served 47 - 48Firm Leadership 49 - 52Contact Information 53 October 2010 2
  3. 3. Executive Summary – OverviewHealthcare Management Partners (HMP) is a hospital and healthcare services management firm. For decades, all of its seniorexecutives have been building and operating thriving healthcare organizations, including CEO, COO and CFO assignmentsacross the spectrum of healthcare services providers. This knowledge base gives HMP a unique perspective on what tools arenecessary to handle the issues facing any healthcare provider organization, and is what prompted HMP to create HMPMetricsTM. Our executives understand the value of being able to measure hospital performance relative to comparablefacilities and against “1st Quartile” or “High Performing” competitors.Utilizing the last six years of publicly available hospital Medicare cost report data, HMP has conducted an extensive studycomparing performance within six hospital peer groups. We can easily create custom peer groups and metrics. These groupsselected include the following: 1. All General Acute Care Hospitals Regardless of Ownership or Sponsorship 2. All Investor Owned General Acute Care Hospitals 3. All Not-For-Profit General Acute Care Hospitals, including Institutions Sponsored by Religious Organizations 4. All State and Local Government Owned General Acute Care Hospitals 5. Free Standing Children’s Hospitals 6. All Non-Federal Major Teaching HospitalsUsing proprietary filters, data contained in the HMP Metrics database has been “scrubbed” to exclude partial period orstatistically aberrant data elements for individual hospitals or health systems. It also excludes Federal Government hospitals,specialty hospitals (e.g., long-term acute care) and general acute care hospitals for which 30% or more of its total licensedbeds are comprised of sub-acute beds. This data validation process produces highly accurate and defensible peer groupcomparisons for dozens of standard industry metrics.This report measures several commonly used metrics to further stratify these hospital types into quartiles in order to illustratethe benchmarks for poor to exceptional performance for each of the metrics. With this information, one can quickly assess therelative financial well-being of any facility in any of these groups. HMP can easily create custom reports and mix or createnew peer groups and compare them to state, local or national benchmarks. October 2010 3
  4. 4. Executive Summary – Key TermsQuartile Rankings: Quartile rankings were assigned based on the mean values calculated for all children’shospitals within the peer groups.Total Profit MarginAll Childrens Hospitals in the United States Regardless of Bed Size 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 17.11% 17.65% 12 12.72% 9.96% 13 17.97% 17.76% 13 2nd Quartile 8.96% 7.97% 12 7.73% 6.60% 13 11.92% 12.48% 14 3rd Quartile 4.09% 3.90% 14 1.98% 1.02% 13 8.82% 9.67% 14 4th Quartile (5.18%) (4.04%) 15 (5.72%) (6.25%) 15 0.60% 3.02% 16 Total Population 5.52% 6.70% 53 3.81% 4.68% 54 9.36% 10.82% 57 Excluded Cost Reports 10 17 13 Total Cost Reports 63 71 70As noted above, the first quartile contains the top 25% of the best performing hospitals in an applicable peer group,the second quartile contains those hospitals falling in the 26% to 50% range, the third quartile contains thosehospitals falling in the 51% to 75% range, and finally the fourth quartile contains those hospitals falling below 76%.Mean Value: The mean value is the average of all amounts within a defined quartile or population.Median Value: The report also contains the median value by quartile or total population.Count: Actual number of qualified hospitals included in the mean or median calculation.Excluded Cost Reports: Represents those metrics values not considered normative (i.e., outlier values). Forexample, certain metric values that were greater than two standard deviations from the mean of a reported populationwould be excluded from the analysis and included in this category. October 2010 4
  5. 5. Executive Summary – Hospital Performance Metrics A measure of overall hospital profitability presented as a percentage. A negative percentageTotal Profit Margin indicates an overall loss, while a positive percentage indicates profitability. A measure of operating profitability presented as a percentage. A negative percentage indicatesTotal Operating Profit Margin overall loss, while a positive percentage indicates profitability. A measure of labor productivity. This metric divides labor costs by operating revenues. ATotal Labor Cost as a Percentage of higher percentage compared to its peers indicates that a hospital uses more labor to produce itsTotal Operating Revenues revenue. Measures the number of full-time equivalent (FTE) employees used for each occupied bed.Full-Time Equivalent Staff (FTEs) per Similar to the previous ratio, a higher percentage compared to its peers indicates that a hospitalAdjusted Occupied Bed (AOB) uses more labor to treat its patients. Measures the number of days it typically takes to collect accounts receivable. A higherDays Net Patient Revenue in percentage compared to its peers indicates that the hospitals revenue cycle is not as efficient asAccounts Receivable (AR) its peers. Measures the average age of the hospital including capital improvements and major equipmentAverage Age of Plant and Equipment purchases. A higher age compared to its peers indicates that the hospital has deferred the replacement of its capital when compared to its peers, which can lead to further distress.Source: Metrics are based on data extracted from Medicare cost reports filed each year with the FederalGovernment. Accuracy of the data contained in the Medicare cost reports is certified by hospital managementwhen the report is filed. Any changes resulting from desk or field audits by Medicare and subsequently included inthe Hospital Cost Report Information System (HCRIS) database have also been reflected in the calculations.Excludes partial-year Medicare cost reports, hospitals where 30% or more of total inpatient beds are non-acute, andhospitals where the computed metric is more than 2 standard deviations from the mean. October 2010 5
  6. 6. Total Profit Margin - SummaryTotal Profit MarginAll Childrens Hospitals in the United States Ranked by Number of Licensed Beds 2009 2008 2007 Number of Licensed Beds Mean Median Count Mean Median Count Mean Median Count 100 Beds or Less 2.23% 0.47% 10 4.05% 3.58% 12 6.68% 6.74% 12 101 to 200 Beds 9.63% 8.68% 13 10.18% 13.42% 13 11.09% 11.90% 13 201 to 300 Beds 3.05% 5.78% 18 1.83% 1.85% 17 9.82% 10.96% 19 Over 300 Beds 7.51% 7.29% 12 (0.53%) 2.36% 12 9.44% 11.11% 13 Total All Hospitals 5.52% 6.70% 53 3.81% 4.68% 54 9.36% 10.82% 57 Excluded Cost Reports 10 17 13 Total Cost Reports 63 71 70 2006 2005 2004 Number of Licensed Beds Mean Median Count Mean Median Count Mean Median Count 200 Beds or Less 0.05% 2.89% 12 5.28% 5.31% 11 4.33% 6.55% 9 201 to 300 Beds 9.34% 10.09% 14 6.77% 6.58% 14 7.11% 3.96% 14 301 to 400 Beds 8.01% 9.01% 18 7.50% 8.82% 18 5.48% 6.25% 19 401 to 500 Beds 10.73% 12.47% 13 8.75% 9.56% 13 8.84% 9.34% 12 Total All Hospitals 7.28% 8.22% 57 7.17% 7.82% 56 6.46% 6.57% 54 Excluded Cost Reports 15 16 19 Total Cost Reports 72 72 73Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 6
  7. 7. Peer Group Comparison – Total Profit MarginTotal Profit MarginAll Childrens Hospitals in the United States with 100 Licensed Beds or Less 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 12.11% 12.11% 2 14.64% 9.96% 3 18.70% 17.76% 3 2nd Quartile 7.36% 7.36% 2 5.78% 5.09% 3 8.85% 8.30% 3 3rd Quartile (0.51%) (1.94%) 3 1.13% 1.75% 3 4.91% 4.41% 3 4th Quartile (5.06%) (4.00%) 3 (5.34%) (6.25%) 3 (5.72%) (4.99%) 3 Total Population 2.23% 0.47% 10 4.05% 3.58% 12 6.68% 6.74% 12 Excluded Cost Reports 7 8 8 Total Cost Reports 17 20 20 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 6.84% 7.17% 3 15.18% 15.18% 2 12.72% 12.72% 2 2nd Quartile 4.88% 5.25% 3 7.95% 6.36% 3 9.49% 9.49% 2 3rd Quartile 0.57% 1.68% 3 2.78% 1.86% 3 6.46% 6.46% 2 4th Quartile (12.08%) (15.64%) 3 (1.51%) 0.62% 3 (6.13%) (4.26%) 3 Total Population 0.05% 2.89% 12 5.28% 5.31% 11 4.33% 6.55% 9 Excluded Cost Reports 9 10 13 Total Cost Reports 21 21 22Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 7
  8. 8. Peer Group Comparison – Total Profit MarginTotal Profit MarginAll Childrens Hospitals in the United States with Between 101 and 200 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 20.12% 20.25% 3 17.87% 17.72% 3 19.95% 20.75% 3 2nd Quartile 10.98% 10.95% 3 14.55% 14.23% 3 13.45% 12.92% 3 3rd Quartile 7.81% 8.18% 3 10.16% 9.54% 3 11.13% 10.82% 3 4th Quartile 2.10% 3.11% 4 1.16% 2.48% 4 2.63% 3.29% 4 Total Population 9.63% 8.68% 13 10.18% 13.42% 13 11.09% 11.90% 13 Excluded Cost Reports 2 4 4 Total Cost Reports 15 17 17 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 20.81% 18.98% 3 18.14% 18.38% 3 18.71% 18.31% 3 2nd Quartile 14.66% 15.29% 3 13.11% 12.81% 3 10.13% 10.63% 3 3rd Quartile 8.65% 9.23% 4 4.08% 3.21% 4 3.12% 2.59% 4 4th Quartile (2.57%) (1.71%) 4 (3.82%) (3.44%) 4 0.12% 0.37% 4 Total Population 9.34% 10.09% 14 6.77% 6.58% 14 7.11% 3.96% 14 Excluded Cost Reports 3 3 3 Total Cost Reports 17 17 17Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 8
  9. 9. Peer Group Comparison – Total Profit MarginTotal Profit MarginAll Childrens Hospitals in the United States with Between 201 and 300 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 16.52% 16.33% 4 10.65% 9.46% 4 16.08% 15.61% 4 2nd Quartile 7.63% 7.22% 4 6.22% 7.14% 4 12.49% 12.74% 5 3rd Quartile 4.09% 3.66% 5 (0.27%) (0.65%) 4 9.19% 9.88% 5 4th Quartile (12.44%) (13.90%) 5 (7.07%) (6.35%) 5 2.79% 4.18% 5 Total Population 3.05% 5.78% 18 1.83% 1.85% 17 9.82% 10.96% 19 Excluded Cost Reports 1 4 1 Total Cost Reports 19 21 20 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 13.13% 12.13% 4 13.47% 13.72% 4 12.82% 11.63% 4 2nd Quartile 10.22% 10.20% 4 10.87% 10.98% 4 8.73% 9.01% 5 3rd Quartile 8.13% 8.22% 5 7.82% 8.39% 5 3.77% 4.30% 5 4th Quartile 2.02% 2.12% 5 (0.31%) 1.95% 5 (1.92%) (1.41%) 5 Total Population 8.01% 9.01% 18 7.50% 8.82% 18 5.48% 6.25% 19 Excluded Cost Reports 3 3 2 Total Cost Reports 21 21 21Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 9
  10. 10. Peer Group Comparison – Total Profit MarginTotal Profit MarginAll Childrens Hospitals in the United States with Over 300 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 18.21% 18.77% 3 8.41% 8.57% 3 17.79% 17.49% 3 2nd Quartile 9.78% 8.43% 3 4.86% 4.97% 3 12.51% 11.84% 3 3rd Quartile 4.96% 4.03% 3 (2.34%) (0.07%) 3 9.82% 9.46% 3 4th Quartile (2.91%) (5.60%) 3 (13.05%) (12.85%) 3 0.58% 4.04% 4 Total Population 7.51% 7.29% 12 (0.53%) 2.36% 12 9.44% 11.11% 13 Excluded Cost Reports 0 1 0 Total Cost Reports 12 13 13 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 19.35% 17.40% 3 14.25% 14.55% 3 13.76% 14.18% 3 2nd Quartile 14.11% 14.11% 3 11.93% 12.35% 3 10.04% 10.14% 3 3rd Quartile 11.06% 10.90% 3 7.83% 7.24% 3 7.72% 7.57% 3 4th Quartile 1.48% 3.58% 4 2.92% 3.16% 4 3.83% 4.00% 3 Total Population 10.73% 12.47% 13 8.75% 9.56% 13 8.84% 9.34% 12 Excluded Cost Reports 0 0 1 Total Cost Reports 13 13 13Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 10
  11. 11. Peer Group Comparison – Total Profit MarginTotal Profit MarginAll Childrens Hospitals in the United States Regardless of Bed Size 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 17.11% 17.65% 12 12.72% 9.96% 13 17.97% 17.76% 13 2nd Quartile 8.96% 7.97% 12 7.73% 6.60% 13 11.92% 12.48% 14 3rd Quartile 4.09% 3.90% 14 1.98% 1.02% 13 8.82% 9.67% 14 4th Quartile (5.18%) (4.04%) 15 (5.72%) (6.25%) 15 0.60% 3.02% 16 Total Population 5.52% 6.70% 53 3.81% 4.68% 54 9.36% 10.82% 57 Excluded Cost Reports 10 17 13 Total Cost Reports 63 71 70 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 14.89% 15.63% 13 15.12% 14.63% 12 14.51% 14.32% 12 2nd Quartile 10.91% 10.74% 13 10.96% 11.45% 13 9.47% 9.68% 13 3rd Quartile 7.34% 8.61% 15 5.82% 6.63% 15 4.82% 5.27% 14 4th Quartile (1.91%) 1.86% 16 (0.61%) 0.56% 16 (1.07%) (0.66%) 15 Total Population 7.28% 8.22% 57 7.17% 7.82% 56 6.46% 6.57% 54 Excluded Cost Reports 15 16 19 Total Cost Reports 72 72 73Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 11
  12. 12. Total Operating Profit Margin - SummaryTotal Operating Profit MarginAll Childrens Hospitals in the United States Ranked by Number of Licensed Beds 2009 2008 2007 Number of Licensed Beds Mean Median Count Mean Median Count Mean Median Count 100 Beds or Less 0.32% (1.17%) 8 1.22% 1.50% 9 2.19% 1.37% 7 101 to 200 Beds 5.33% 3.95% 12 5.88% 1.53% 12 3.40% 3.44% 10 201 to 300 Beds (3.30%) (2.05%) 18 (2.45%) 1.16% 18 (1.96%) 0.40% 19 Over 300 Beds (3.20%) (0.68%) 11 (5.27%) (3.17%) 12 (0.35%) (2.94%) 11 Total All Hospitals (0.57%) 0.37% 49 (0.51%) 1.00% 51 0.17% 1.37% 47 Excluded Cost Reports 14 20 23 Total Cost Reports 63 71 70 2006 2005 2004 Number of Licensed Beds Mean Median Count Mean Median Count Mean Median Count 200 Beds or Less (8.19%) (8.41%) 8 (0.84%) 1.79% 7 3.47% 2.31% 5 201 to 300 Beds 5.92% 3.78% 11 3.99% 4.25% 11 (1.09%) (0.46%) 11 301 to 400 Beds (2.84%) 1.02% 19 0.34% 2.78% 15 (2.08%) (0.46%) 16 401 to 500 Beds (2.13%) (0.17%) 12 (3.77%) (4.23%) 11 (5.23%) (3.05%) 10 Total All Hospitals (1.60%) 1.11% 50 0.03% 1.43% 44 (1.91%) (0.80%) 42 Excluded Cost Reports 22 28 31 Total Cost Reports 72 72 73Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 12
  13. 13. Peer Group Comparison – Total Operating Profit MarginTotal Operating Profit MarginAll Childrens Hospitals in the United States with 100 Licensed Beds or Less 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 10.97% 10.97% 2 12.97% 12.97% 2 20.77% 20.77% 1 2nd Quartile 1.76% 1.76% 2 4.29% 4.29% 2 12.54% 12.54% 2 3rd Quartile (4.03%) (4.03%) 2 0.75% 0.75% 2 (2.15%) (2.15%) 2 4th Quartile (7.41%) (7.41%) 2 (8.36%) (8.94%) 3 (13.12%) (13.12%) 2 Total Population 0.32% (1.17%) 8 1.22% 1.50% 9 2.19% 1.37% 7 Excluded Cost Reports 9 11 13 Total Cost Reports 17 20 20 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 5.67% 5.67% 2 16.80% 16.80% 1 14.46% 14.46% 1 2nd Quartile (1.82%) (1.82%) 2 9.24% 9.24% 2 8.48% 8.48% 1 3rd Quartile (14.46%) (14.46%) 2 0.41% 0.41% 2 2.31% 2.31% 1 4th Quartile (22.16%) (22.16%) 2 (20.98%) (20.98%) 2 (3.96%) (3.96%) 2 Total Population (8.19%) (8.41%) 8 (0.84%) 1.79% 7 3.47% 2.31% 5 Excluded Cost Reports 13 14 17 Total Cost Reports 21 21 22Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 13
  14. 14. Peer Group Comparison – Total Operating Profit MarginTotal Operating Profit MarginAll Childrens Hospitals in the United States with Between 101 and 200 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 17.42% 20.01% 3 18.71% 19.87% 3 15.99% 15.99% 2 2nd Quartile 6.21% 7.00% 3 5.56% 6.12% 3 5.45% 5.45% 2 3rd Quartile 1.90% 2.30% 3 1.12% 1.00% 3 2.98% 2.56% 3 4th Quartile (4.20%) (3.96%) 3 (1.87%) (0.58%) 3 (5.94%) (1.12%) 3 Total Population 5.33% 3.95% 12 5.88% 1.53% 12 3.40% 3.44% 10 Excluded Cost Reports 3 5 7 Total Cost Reports 15 17 17 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 23.65% 23.65% 2 21.01% 21.01% 2 12.26% 12.26% 2 2nd Quartile 9.40% 8.54% 3 11.97% 13.74% 3 6.31% 8.44% 3 3rd Quartile 1.89% 1.26% 3 1.37% 0.40% 3 (3.04%) (3.19%) 3 4th Quartile (5.37%) (5.37%) 3 (12.74%) (10.05%) 3 (15.44%) (17.63%) 3 Total Population 5.92% 3.78% 11 3.99% 4.25% 11 (1.09%) (0.46%) 11 Excluded Cost Reports 6 6 6 Total Cost Reports 17 17 17Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 14
  15. 15. Peer Group Comparison – Total Operating Profit MarginTotal Operating Profit MarginAll Childrens Hospitals in the United States with Between 201 and 300 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 14.02% 13.41% 4 10.50% 10.20% 4 10.00% 9.71% 4 2nd Quartile 4.13% 3.79% 4 3.70% 3.40% 4 3.65% 4.26% 5 3rd Quartile (6.44%) (5.83%) 5 (1.24%) (0.54%) 5 (3.28%) (2.92%) 5 4th Quartile (19.97%) (20.47%) 5 (18.95%) (20.13%) 5 (15.82%) (17.55%) 5 Total Population (3.30%) (2.05%) 18 (2.45%) 1.16% 18 (1.96%) 0.40% 19 Excluded Cost Reports 1 3 1 Total Cost Reports 19 21 20 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 8.89% 8.68% 4 9.42% 7.05% 3 6.47% 6.87% 4 2nd Quartile 2.64% 2.27% 5 5.35% 5.99% 4 1.20% 1.15% 4 3rd Quartile (2.70%) (0.82%) 5 0.78% 1.59% 4 (3.28%) (3.74%) 4 4th Quartile (17.85%) (17.96%) 5 (11.93%) (11.68%) 4 (12.69%) (12.78%) 4 Total Population (2.84%) 1.02% 19 0.34% 2.78% 15 (2.08%) (0.46%) 16 Excluded Cost Reports 2 6 5 Total Cost Reports 21 21 21Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 15
  16. 16. Peer Group Comparison – Total Operating Profit MarginTotal Operating Profit MarginAll Childrens Hospitals in the United States with Over 300 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 6.94% 6.94% 2 4.13% 4.48% 3 11.69% 11.69% 2 2nd Quartile 1.51% 1.56% 3 (1.31%) (1.16%) 3 2.94% 4.86% 3 3rd Quartile (3.91%) (4.93%) 3 (6.23%) (7.22%) 3 (3.35%) (3.22%) 3 4th Quartile (13.96%) (14.18%) 3 (17.66%) (20.24%) 3 (8.66%) (8.57%) 3 Total Population (3.20%) (0.68%) 11 (5.27%) (3.17%) 12 (0.35%) (2.94%) 11 Excluded Cost Reports 1 1 2 Total Cost Reports 12 13 13 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 7.48% 7.31% 3 4.78% 4.78% 2 1.36% 1.36% 2 2nd Quartile 3.77% 3.93% 3 0.30% (0.27%) 3 (1.12%) (1.12%) 2 3rd Quartile (5.14%) (4.28%) 3 (5.65%) (5.49%) 3 (3.46%) (3.62%) 3 4th Quartile (14.64%) (12.98%) 3 (11.67%) (9.74%) 3 (14.12%) (10.12%) 3 Total Population (2.13%) (0.17%) 12 (3.77%) (4.23%) 11 (5.23%) (3.05%) 10 Excluded Cost Reports 1 2 3 Total Cost Reports 13 13 13Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 16
  17. 17. Peer Group Comparison – Total Operating Profit MarginTotal Operating Profit MarginAll Childrens Hospitals in the United States Regardless of Bed Size 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 13.11% 11.18% 11 11.37% 10.20% 12 12.90% 13.15% 9 2nd Quartile 3.60% 1.85% 12 3.01% 2.72% 12 5.25% 4.83% 12 3rd Quartile (3.56%) (3.93%) 13 (1.54%) (0.00%) 13 (1.68%) (2.92%) 13 4th Quartile (13.01%) (14.18%) 13 (12.75%) (13.01%) 14 (11.47%) (10.34%) 13 Total Population (0.57%) 0.37% 49 (0.51%) 1.00% 51 0.17% 1.37% 47 Excluded Cost Reports 14 20 23 Total Cost Reports 63 71 70 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 10.60% 8.47% 11 12.08% 10.88% 8 7.51% 6.95% 9 2nd Quartile 3.77% 3.64% 13 6.39% 6.11% 12 3.00% 1.15% 10 3rd Quartile (4.01%) (3.76%) 13 (0.74%) (0.07%) 12 (2.76%) (3.19%) 11 4th Quartile (14.89%) (16.18%) 13 (13.57%) (11.68%) 12 (12.28%) (10.04%) 12 Total Population (1.60%) 1.11% 50 0.03% 1.43% 44 (1.91%) (0.80%) 42 Excluded Cost Reports 22 28 31 Total Cost Reports 72 72 73Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 17
  18. 18. Total Labor Cost as a Percentage of Total Operating Revenues - SummaryTotal Labor Cost as a Percentage of Total Operating RevenuesAll Childrens Hospitals in the United States Ranked by Number of Licensed Beds 2009 2008 2007 Number of Licensed Beds Mean Median Count Mean Median Count Mean Median Count 100 Beds or Less 50.74% 51.50% 8 50.21% 48.61% 9 53.29% 51.83% 8 101 to 200 Beds 50.45% 49.65% 14 50.71% 49.90% 13 50.15% 47.73% 13 201 to 300 Beds 44.15% 43.46% 19 44.37% 43.64% 20 43.51% 43.37% 19 Over 300 Beds 46.00% 48.75% 11 46.71% 47.15% 12 45.36% 44.95% 12 Total All Hospitals 47.25% 47.94% 52 47.39% 48.10% 54 47.10% 46.54% 52 Excluded Cost Reports 11 17 18 Total Cost Reports 63 71 70 2006 2005 2004 Number of Licensed Beds Mean Median Count Mean Median Count Mean Median Count 200 Beds or Less 51.29% 54.55% 9 51.12% 54.57% 9 48.63% 44.42% 7 201 to 300 Beds 48.16% 48.28% 12 50.19% 48.68% 12 48.70% 48.91% 12 301 to 400 Beds 43.64% 41.56% 20 45.83% 46.54% 17 46.12% 45.93% 19 401 to 500 Beds 47.02% 46.83% 12 47.41% 46.27% 12 50.34% 51.06% 12 Total All Hospitals 46.73% 47.59% 53 48.21% 48.23% 50 48.10% 48.91% 50 Excluded Cost Reports 19 22 23 Total Cost Reports 72 72 73Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 18
  19. 19. Peer Group Comparison – Total Labor Cost as a Pct. of Total Op. RevenuesTotal Labor Cost as a Percentage of Total Operating RevenuesAll Childrens Hospitals in the United States with 100 Licensed Beds or Less 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 37.53% 37.53% 2 39.92% 39.92% 2 43.48% 43.48% 2 2nd Quartile 50.22% 50.22% 2 46.60% 46.60% 2 49.90% 49.90% 2 3rd Quartile 52.83% 52.83% 2 50.58% 50.58% 2 53.66% 53.66% 2 4th Quartile 62.36% 62.36% 2 59.23% 56.85% 3 66.11% 66.11% 2 Total Population 50.74% 51.50% 8 50.21% 48.61% 9 53.29% 51.83% 8 Excluded Cost Reports 9 11 12 Total Cost Reports 17 20 20 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 34.60% 34.60% 2 37.60% 37.60% 2 34.66% 34.66% 1 2nd Quartile 49.91% 49.91% 2 42.37% 42.37% 2 40.18% 40.18% 2 3rd Quartile 54.74% 54.74% 2 55.12% 55.12% 2 49.76% 49.76% 2 4th Quartile 61.03% 58.43% 3 63.29% 63.26% 3 62.94% 62.94% 2 Total Population 51.29% 54.55% 9 51.12% 54.57% 9 48.63% 44.42% 7 Excluded Cost Reports 12 12 15 Total Cost Reports 21 21 22Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 19
  20. 20. Peer Group Comparison – Total Labor Cost as a Pct. of Total Op. RevenuesTotal Labor Cost as a Percentage of Total Operating RevenuesAll Childrens Hospitals in the United States with Between 101 and 200 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 40.81% 42.25% 3 41.52% 41.16% 3 40.95% 41.94% 3 2nd Quartile 44.70% 43.99% 3 45.74% 44.61% 3 45.87% 45.65% 3 3rd Quartile 52.00% 52.77% 4 52.98% 53.68% 3 49.66% 49.86% 3 4th Quartile 60.46% 58.45% 4 59.62% 58.80% 4 60.63% 61.63% 4 Total Population 50.45% 49.65% 14 50.71% 49.90% 13 50.15% 47.73% 13 Excluded Cost Reports 1 4 4 Total Cost Reports 15 17 17 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 40.18% 40.14% 3 39.26% 37.92% 3 39.33% 39.09% 3 2nd Quartile 45.47% 45.52% 3 47.05% 47.19% 3 47.08% 47.15% 3 3rd Quartile 50.32% 50.75% 3 51.76% 50.15% 3 50.80% 51.10% 3 4th Quartile 56.69% 57.18% 3 62.69% 63.49% 3 57.61% 57.37% 3 Total Population 48.16% 48.28% 12 50.19% 48.68% 12 48.70% 48.91% 12 Excluded Cost Reports 5 5 5 Total Cost Reports 17 17 17Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 20
  21. 21. Peer Group Comparison – Total Labor Cost as a Pct. of Total Op. RevenuesTotal Labor Cost as a Percentage of Total Operating RevenuesAll Childrens Hospitals in the United States with Between 201 and 300 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 32.73% 32.56% 4 33.46% 33.45% 5 31.65% 31.74% 4 2nd Quartile 37.81% 37.93% 5 39.25% 39.57% 5 36.86% 35.50% 5 3rd Quartile 46.33% 45.76% 5 47.84% 48.64% 5 45.89% 46.24% 5 4th Quartile 57.46% 54.45% 5 56.92% 53.60% 5 57.26% 54.02% 5 Total Population 44.15% 43.46% 19 44.37% 43.64% 20 43.51% 43.37% 19 Excluded Cost Reports 0 1 1 Total Cost Reports 19 21 20 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 32.05% 31.84% 5 34.26% 34.38% 4 34.32% 34.82% 4 2nd Quartile 38.64% 38.76% 5 39.82% 40.00% 4 42.01% 43.51% 5 3rd Quartile 47.18% 48.56% 5 50.66% 51.64% 4 49.84% 49.86% 5 4th Quartile 56.68% 54.26% 5 56.01% 55.30% 5 55.95% 54.78% 5 Total Population 43.64% 41.56% 20 45.83% 46.54% 17 46.12% 45.93% 19 Excluded Cost Reports 1 4 2 Total Cost Reports 21 21 21Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 21
  22. 22. Peer Group Comparison – Total Labor Cost as a Pct. of Total Op. RevenuesTotal Labor Cost as a Percentage of Total Operating RevenuesAll Childrens Hospitals in the United States with Over 300 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 35.87% 35.87% 2 38.42% 38.68% 3 36.19% 36.10% 3 2nd Quartile 41.67% 42.48% 3 43.83% 43.44% 3 41.63% 40.16% 3 3rd Quartile 49.48% 49.84% 3 50.28% 49.38% 3 48.02% 49.23% 3 4th Quartile 53.62% 53.70% 3 54.33% 54.04% 3 55.59% 55.59% 3 Total Population 46.00% 48.75% 11 46.71% 47.15% 12 45.36% 44.95% 12 Excluded Cost Reports 1 1 1 Total Cost Reports 12 13 13 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 37.62% 38.06% 3 37.60% 37.77% 3 40.06% 41.45% 3 2nd Quartile 42.30% 41.14% 3 43.25% 43.27% 3 45.69% 43.80% 3 3rd Quartile 50.11% 50.25% 3 50.88% 48.90% 3 54.80% 55.83% 3 4th Quartile 58.03% 54.81% 3 57.90% 56.33% 3 60.81% 58.44% 3 Total Population 47.02% 46.83% 12 47.41% 46.27% 12 50.34% 51.06% 12 Excluded Cost Reports 1 1 1 Total Cost Reports 13 13 13Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 22
  23. 23. Peer Group Comparison – Total Labor Cost as a Pct. of Total Op. RevenuesTotal Labor Cost as a Percentage of Total Operating RevenuesAll Childrens Hospitals in the United States Regardless of Bed Size 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 36.38% 34.45% 11 37.46% 37.18% 13 37.08% 36.65% 12 2nd Quartile 42.20% 42.48% 13 42.93% 43.44% 13 42.05% 40.84% 13 3rd Quartile 49.55% 49.39% 14 50.01% 49.38% 13 48.45% 48.53% 13 4th Quartile 58.19% 56.92% 14 57.59% 56.07% 15 59.13% 58.84% 14 Total Population 47.25% 47.94% 52 47.39% 48.10% 54 47.10% 46.54% 52 Excluded Cost Reports 11 17 18 Total Cost Reports 63 71 70 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 35.60% 35.95% 13 36.90% 36.39% 12 37.28% 36.15% 11 2nd Quartile 42.80% 41.56% 13 42.91% 42.60% 12 43.75% 44.19% 13 3rd Quartile 49.75% 49.68% 13 51.73% 51.64% 12 51.19% 51.10% 13 4th Quartile 57.91% 56.80% 14 59.41% 59.07% 14 58.53% 57.72% 13 Total Population 46.73% 47.59% 53 48.21% 48.23% 50 48.10% 48.91% 50 Excluded Cost Reports 19 22 23 Total Cost Reports 72 72 73Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 23
  24. 24. Full-Time Equivalent (FTE) Staff Per Adjusted Occupied Bed (AOB) - SummaryFull-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)All Childrens Hospitals in the United States Ranked by Number of Licensed Beds 2009 2008 2007 Number of Licensed Beds Mean Median Count Mean Median Count Mean Median Count 100 Beds or Less 5.02 5.25 7 5.47 5.44 8 6.21 5.73 9 101 to 200 Beds 6.09 6.94 11 6.83 7.47 11 5.99 6.27 11 201 to 300 Beds 6.62 7.47 8 6.22 7.54 9 6.63 7.73 11 Over 300 Beds 7.08 7.25 4 7.29 7.61 5 7.28 7.46 6 Total All Hospitals 6.11 6.60 30 6.40 7.12 33 6.44 6.98 37 Excluded Cost Reports 33 38 33 Total Cost Reports 63 71 70 2006 2005 2004 Number of Licensed Beds Mean Median Count Mean Median Count Mean Median Count 200 Beds or Less 5.56 5.58 10 5.30 4.64 7 4.91 4.94 5 201 to 300 Beds 5.95 6.45 13 5.81 5.86 10 5.70 5.62 12 301 to 400 Beds 6.94 7.80 13 7.69 7.77 8 7.27 7.66 13 401 to 500 Beds 7.22 7.58 5 6.95 7.49 6 6.87 7.09 6 Total All Hospitals 6.32 7.14 41 6.40 6.98 31 6.35 6.78 36 Excluded Cost Reports 31 41 37 Total Cost Reports 72 72 73Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 24
  25. 25. Peer Group Comparison – Full-Time Equivalent (FTE) Staff Per Adjusted Occupied Bed (AOB)Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)All Childrens Hospitals in the United States with 100 Licensed Beds or Less 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 2.33 2.33 1 3.66 3.66 2 3.85 3.85 2 2nd Quartile 3.94 3.94 2 4.68 4.68 2 5.26 5.26 2 3rd Quartile 5.58 5.58 2 5.99 5.99 2 6.57 6.57 2 4th Quartile 6.87 6.87 2 7.56 7.56 2 8.19 8.16 3 Total Population 5.02 5.25 7 5.47 5.44 8 6.21 5.73 9 Excluded Cost Reports 10 12 11 Total Cost Reports 17 20 20 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 3.42 3.42 2 3.01 3.01 1 3.58 3.58 1 2nd Quartile 4.12 4.12 2 4.12 4.12 2 3.83 3.83 1 3rd Quartile 5.67 5.68 3 5.32 5.32 2 4.94 4.94 1 4th Quartile 7.84 8.11 3 7.61 7.61 2 6.10 6.10 2 Total Population 5.56 5.58 10 5.30 4.64 7 4.91 4.94 5 Excluded Cost Reports 11 14 17 Total Cost Reports 21 21 22Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 25
  26. 26. Peer Group Comparison – Full-Time Equivalent (FTE) Staff Per Adjusted Occupied Bed (AOB)Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)All Childrens Hospitals in the United States with Between 101 and 200 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 3.25 3.25 2 4.35 4.35 2 3.59 3.59 2 2nd Quartile 4.71 4.78 3 5.76 5.45 3 4.67 4.67 3 3rd Quartile 7.33 7.39 3 8.01 8.26 3 6.92 6.88 3 4th Quartile 8.13 8.12 3 8.35 8.33 3 7.97 8.09 3 Total Population 6.09 6.94 11 6.83 7.47 11 5.99 6.27 11 Excluded Cost Reports 4 6 6 Total Cost Reports 15 17 17 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 3.56 3.18 3 3.57 3.57 2 3.46 3.39 3 2nd Quartile 4.67 4.63 3 4.58 4.58 2 4.83 4.78 3 3rd Quartile 6.94 7.14 3 6.19 6.30 3 6.64 6.44 3 4th Quartile 7.95 7.98 4 7.75 7.99 3 7.89 7.75 3 Total Population 5.95 6.45 13 5.81 5.86 10 5.70 5.62 12 Excluded Cost Reports 4 7 5 Total Cost Reports 17 17 17Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 26
  27. 27. Peer Group Comparison – Full-Time Equivalent (FTE) Staff Per Adjusted Occupied Bed (AOB)Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)All Childrens Hospitals in the United States with Between 201 and 300 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 3.87 3.87 2 2.81 2.81 2 2.79 2.79 2 2nd Quartile 6.64 6.64 2 5.60 5.60 2 6.16 6.95 3 3rd Quartile 7.75 7.75 2 7.66 7.66 2 7.91 7.83 3 4th Quartile 8.23 8.23 2 7.94 7.97 3 8.37 8.36 3 Total Population 6.62 7.47 8 6.22 7.54 9 6.63 7.73 11 Excluded Cost Reports 11 12 9 Total Cost Reports 19 21 20 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 3.75 3.36 3 6.79 6.79 2 5.61 6.52 3 2nd Quartile 7.31 7.49 3 7.64 7.64 2 7.26 7.33 3 3rd Quartile 7.95 8.01 3 8.00 8.00 2 7.71 7.68 3 4th Quartile 8.30 8.26 4 8.35 8.35 2 8.20 8.20 4 Total Population 6.94 7.80 13 7.69 7.77 8 7.27 7.66 13 Excluded Cost Reports 8 13 8 Total Cost Reports 21 21 21Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 27
  28. 28. Peer Group Comparison – Full-Time Equivalent (FTE) Staff Per Adjusted Occupied Bed (AOB)Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB)All Childrens Hospitals in the United States with Over 300 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 6.15 6.15 1 6.02 6.02 1 5.85 5.85 1 2nd Quartile 7.22 7.22 1 6.82 6.82 1 6.28 6.28 1 3rd Quartile 7.28 7.28 1 7.61 7.61 1 7.46 7.46 2 4th Quartile 7.67 7.67 1 8.00 8.00 2 8.31 8.31 2 Total Population 7.08 7.25 4 7.29 7.61 5 7.28 7.46 6 Excluded Cost Reports 8 8 7 Total Cost Reports 12 13 13 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 5.57 5.57 1 5.25 5.25 1 5.19 5.19 1 2nd Quartile 6.54 6.54 1 5.45 5.45 1 6.28 6.28 1 3rd Quartile 7.58 7.58 1 7.49 7.49 2 7.09 7.09 2 4th Quartile 8.21 8.21 2 8.02 8.02 2 7.79 7.79 2 Total Population 7.22 7.58 5 6.95 7.49 6 6.87 7.09 6 Excluded Cost Reports 8 7 7 Total Cost Reports 13 13 13Notes:• Excludes partial-year cost reports and those cost reports deemed to be outliers (e.g., values greater than two standard deviations from the mean of the reported population).• Excludes Federal, specialty hospitals and general acute care hospitals for which 30% or more of total licensed beds are comprised of sub acute beds. October 2010 28

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