HMP Metrics™: Investor Owned Hospitals October, 2010

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HMP Metrics™: Investor Owned Hospitals October, 2010

  1. 1. 1
  2. 2. Table of ContentsExecutive Summary 3-5Financial and Operational Study 6 - 59 • Total Profit Margin 6 - 14 • Total Operating Profit Margin 15 - 23 • Total Labor Cost as a Percentage of Total Operating Revenues 24 - 32 • Full-Time Equivalent (FTE) Staff per Adjusted Occupied Bed (AOB) 33 - 41 • Days Net Patient Revenue in Accounts Receivable (AR) 42 - 50 • Average Age of Plant and Equipment 51 - 59Introduction to Healthcare Management Partners 60 - 64Clients Our Professionals Have Served 65 - 66Firm Leadership 67 - 70Contact Information 71 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 investor ownedgeneral acute care hospitals within the peer groups. Total Profit Margin All Investor Owned General Acute Care Hospitals in the United States Regardless of Bed Size 2009 Quartile Rank Mean Median Count 1st Quartile 19.14% 18.86% 148 2nd Quartile 10.53% 10.84% 150 3rd Quartile 4.37% 4.15% 153 4th Quartile (4.50%) (3.63%) 155 Total Population 7.23% 7.48% 606 Excluded Cost Reports 94 Total Cost Reports 700As 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 percentageTotal Operating Profit Margin indicates 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 (FTE) Staff 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 higherAverage Days 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 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 Investor Owned General Acute Care 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 25 Beds or Less 6.17% 5.52% 75 5.93% 7.16% 89 5.79% 8.16% 89 26 to 100 Beds 5.39% 5.08% 166 5.38% 6.28% 187 6.08% 5.50% 196 101 to 200 Beds 7.54% 7.59% 197 6.00% 6.07% 221 6.27% 6.26% 226 201 to 300 Beds 9.90% 10.98% 86 7.65% 8.41% 89 8.39% 8.84% 92 301 to 400 Beds 8.29% 8.95% 43 6.97% 7.10% 47 7.16% 8.39% 49 401 to 500 Beds 7.61% 6.98% 21 6.48% 4.88% 24 7.85% 8.74% 23 Over 500 Beds 9.59% 9.36% 18 8.52% 8.05% 18 9.80% 8.99% 18 Total All Hospitals 7.23% 7.48% 606 6.19% 6.71% 675 6.64% 7.06% 693 Excluded Cost Reports 94 89 100 Total Cost Reports 700 764 793 2006 2005 2004 Number of Licensed Beds Mean Median Count Mean Median Count Mean Median Count 25 Beds or Less 4.76% 3.80% 92 5.62% 4.56% 69 4.98% 5.75% 57 26 to 100 Beds 6.50% 6.10% 195 6.52% 6.70% 193 4.87% 5.23% 199 101 to 200 Beds 5.67% 5.61% 218 5.81% 6.27% 215 5.55% 6.21% 216 201 to 300 Beds 8.71% 9.20% 96 8.05% 8.35% 92 7.52% 7.30% 98 301 to 400 Beds 7.85% 6.52% 46 5.96% 6.47% 48 7.88% 8.17% 50 401 to 500 Beds 4.16% 6.48% 23 6.00% 5.59% 21 6.87% 7.58% 24 Over 500 Beds 8.56% 8.91% 20 10.03% 7.16% 20 9.64% 9.39% 19 Total All Hospitals 6.39% 6.48% 690 6.46% 6.63% 658 5.93% 6.16% 663 Excluded Cost Reports 107 106 87 Total Cost Reports 797 764 750Notes:• 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 Investor Owned General Acute Care Hospitals in the United States with 25 Licensed Beds or Less 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 20.40% 20.53% 18 20.28% 19.39% 22 19.42% 19.31% 22 2nd Quartile 10.13% 9.73% 19 11.46% 11.66% 22 10.48% 9.93% 22 3rd Quartile 2.41% 2.31% 19 2.39% 2.48% 22 3.70% 4.22% 22 4th Quartile (7.53%) (6.49%) 19 (9.71%) (9.71%) 23 (9.73%) (9.63%) 23 Total Population 6.17% 5.52% 75 5.93% 7.16% 89 5.79% 8.16% 89 Excluded Cost Reports 21 29 33 Total Cost Reports 96 118 122 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 20.37% 20.09% 23 21.69% 21.72% 17 19.89% 19.48% 14 2nd Quartile 9.39% 9.05% 23 10.33% 11.41% 17 9.73% 9.03% 14 3rd Quartile 0.32% 0.26% 23 1.26% 1.99% 17 0.88% 0.10% 14 4th Quartile (11.05%) (9.87%) 23 (9.88%) (9.33%) 18 (9.55%) (9.28%) 15 Total Population 4.76% 3.80% 92 5.62% 4.56% 69 4.98% 5.75% 57 Excluded Cost Reports 35 25 23 Total Cost Reports 127 94 80Notes:• 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 Investor Owned General Acute Care Hospitals in the United States with Between 26 and 100 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 19.60% 18.98% 41 19.56% 19.39% 46 19.49% 19.09% 49 2nd Quartile 9.06% 8.32% 41 9.74% 9.79% 47 9.67% 10.11% 49 3rd Quartile 1.62% 1.26% 42 2.22% 2.27% 47 2.60% 2.49% 49 4th Quartile (8.27%) (7.64%) 42 (9.68%) (8.87%) 47 (7.46%) (6.22%) 49 Total Population 5.39% 5.08% 166 5.38% 6.28% 187 6.08% 5.50% 196 Excluded Cost Reports 34 33 34 Total Cost Reports 200 220 230 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 20.73% 20.82% 48 19.19% 18.75% 48 19.18% 18.55% 49 2nd Quartile 11.14% 11.40% 49 10.51% 10.46% 48 8.86% 9.19% 50 3rd Quartile 2.68% 2.68% 49 3.75% 4.15% 48 1.21% 0.95% 50 4th Quartile (8.25%) (7.17%) 49 (7.08%) (5.26%) 49 (9.49%) (9.55%) 50 Total Population 6.50% 6.10% 195 6.52% 6.70% 193 4.87% 5.23% 199 Excluded Cost Reports 34 36 28 Total Cost Reports 229 229 227Notes:• 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 Investor Owned General Acute Care 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 18.75% 18.90% 49 17.96% 17.41% 55 18.11% 17.48% 56 2nd Quartile 10.58% 10.50% 49 9.44% 9.74% 55 9.52% 9.42% 56 3rd Quartile 4.42% 4.24% 49 2.88% 3.09% 55 3.14% 3.07% 57 4th Quartile (3.38%) (2.43%) 50 (6.07%) (5.10%) 56 (5.45%) (3.76%) 57 Total Population 7.54% 7.59% 197 6.00% 6.07% 221 6.27% 6.26% 226 Excluded Cost Reports 25 16 23 Total Cost Reports 222 237 249 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 17.58% 17.32% 54 17.53% 17.42% 53 17.95% 16.71% 54 2nd Quartile 9.35% 9.45% 54 9.37% 9.17% 54 9.13% 9.19% 54 3rd Quartile 2.51% 2.33% 55 3.43% 3.59% 54 2.97% 3.17% 54 4th Quartile (6.47%) (5.79%) 55 (6.89%) (5.44%) 54 (7.84%) (6.94%) 54 Total Population 5.67% 5.61% 218 5.81% 6.27% 215 5.55% 6.21% 216 Excluded Cost Reports 30 34 27 Total Cost Reports 248 249 243Notes:• 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 Investor Owned General Acute Care 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 18.89% 17.62% 21 16.84% 16.09% 22 17.97% 17.33% 23 2nd Quartile 12.72% 12.34% 21 10.51% 10.49% 22 11.32% 11.34% 23 3rd Quartile 8.85% 8.77% 22 6.17% 6.40% 22 6.40% 6.25% 23 4th Quartile (0.34%) 3.19% 22 (2.47%) (0.63%) 23 (2.15%) (0.75%) 23 Total Population 9.90% 10.98% 86 7.65% 8.41% 89 8.39% 8.84% 92 Excluded Cost Reports 9 9 8 Total Cost Reports 95 98 100 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 19.05% 18.01% 24 18.78% 18.66% 23 19.07% 19.56% 24 2nd Quartile 11.86% 11.69% 24 10.86% 10.55% 23 10.33% 10.19% 24 3rd Quartile 6.52% 6.79% 24 5.52% 5.03% 23 4.56% 4.47% 25 4th Quartile (2.58%) (0.00%) 24 (2.98%) (0.42%) 23 (3.31%) (2.77%) 25 Total Population 8.71% 9.20% 96 8.05% 8.35% 92 7.52% 7.30% 98 Excluded Cost Reports 5 8 4 Total Cost Reports 101 100 102Notes:• 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 Investor Owned General Acute Care Hospitals in the United States with Between 301 and 400 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 18.00% 18.06% 10 18.17% 18.27% 11 18.16% 18.13% 12 2nd Quartile 11.39% 10.83% 11 9.76% 9.52% 12 10.97% 10.61% 12 3rd Quartile 7.14% 7.04% 11 4.07% 4.09% 12 4.91% 5.02% 12 4th Quartile (2.48%) (1.89%) 11 (3.21%) (3.22%) 12 (4.42%) (3.72%) 13 Total Population 8.29% 8.95% 43 6.97% 7.10% 47 7.16% 8.39% 49 Excluded Cost Reports 3 2 1 Total Cost Reports 46 49 50 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 19.21% 18.69% 11 18.52% 17.76% 12 19.91% 18.58% 12 2nd Quartile 10.38% 10.05% 11 10.21% 10.23% 12 11.00% 10.32% 12 3rd Quartile 5.05% 5.30% 12 3.19% 3.01% 12 5.37% 5.11% 13 4th Quartile (2.06%) (1.63%) 12 (8.06%) (5.65%) 12 (3.58%) (2.43%) 13 Total Population 7.85% 6.52% 46 5.96% 6.47% 48 7.88% 8.17% 50 Excluded Cost Reports 2 2 4 Total Cost Reports 48 50 54Notes:• 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. Peer Group Comparison – Total Profit MarginTotal Profit MarginAll Investor Owned General Acute Care Hospitals in the United States with Between 401 and 500 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 16.77% 14.17% 5 16.44% 16.28% 6 18.55% 18.44% 5 2nd Quartile 9.53% 9.36% 5 7.33% 7.77% 6 10.16% 9.85% 6 3rd Quartile 5.33% 6.33% 5 2.79% 2.23% 6 6.47% 7.21% 6 4th Quartile 0.28% 1.17% 6 (0.63%) (0.35%) 6 (1.97%) (1.29%) 6 Total Population 7.61% 6.98% 21 6.48% 4.88% 24 7.85% 8.74% 23 Excluded Cost Reports 2 0 1 Total Cost Reports 23 24 24 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 16.34% 16.22% 5 15.29% 14.17% 5 18.97% 17.64% 6 2nd Quartile 9.48% 9.03% 6 10.58% 11.34% 5 10.53% 10.66% 6 3rd Quartile 2.57% 2.59% 6 2.73% 2.58% 5 3.55% 3.29% 6 4th Quartile (9.71%) (9.63%) 6 (2.84%) (1.33%) 6 (5.58%) (4.02%) 6 Total Population 4.16% 6.48% 23 6.00% 5.59% 21 6.87% 7.58% 24 Excluded Cost Reports 1 1 0 Total Cost Reports 24 22 24Notes:• 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 Profit MarginTotal Profit MarginAll Investor Owned General Acute Care Hospitals in the United States with Over 500 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 20.75% 20.88% 4 20.60% 20.10% 4 19.43% 19.55% 4 2nd Quartile 14.12% 14.09% 4 12.43% 12.18% 4 12.30% 12.26% 4 3rd Quartile 7.58% 6.83% 5 6.47% 6.74% 5 8.12% 8.87% 5 4th Quartile (0.94%) (1.64%) 5 (2.21%) (2.07%) 5 1.80% 2.09% 5 Total Population 9.59% 9.36% 18 8.52% 8.05% 18 9.80% 8.99% 18 Excluded Cost Reports 0 0 0 Total Cost Reports 18 18 18 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 17.56% 16.91% 5 21.03% 22.05% 5 16.98% 16.00% 4 2nd Quartile 10.53% 10.49% 5 11.28% 11.46% 5 11.38% 10.77% 5 3rd Quartile 7.26% 7.79% 5 6.07% 5.72% 5 7.62% 8.24% 5 4th Quartile (1.11%) (0.58%) 5 1.76% 2.51% 5 4.06% 4.06% 5 Total Population 8.56% 8.91% 20 10.03% 7.16% 20 9.64% 9.39% 19 Excluded Cost Reports 0 0 1 Total Cost Reports 20 20 20Notes:• 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 Profit MarginTotal Profit MarginAll Investor Owned General Acute Care 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 19.14% 18.86% 148 18.59% 18.38% 166 18.70% 18.21% 171 2nd Quartile 10.53% 10.84% 150 9.95% 10.11% 168 10.11% 10.29% 172 3rd Quartile 4.37% 4.15% 153 3.25% 3.14% 169 3.87% 3.85% 174 4th Quartile (4.50%) (3.63%) 155 (6.56%) (6.31%) 172 (5.74%) (4.72%) 176 Total Population 7.23% 7.48% 606 6.19% 6.71% 675 6.64% 7.06% 693 Excluded Cost Reports 94 89 100 Total Cost Reports 700 764 793 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 19.12% 18.57% 170 18.74% 18.56% 163 18.81% 17.89% 163 2nd Quartile 10.32% 10.57% 172 10.17% 10.28% 164 9.53% 9.66% 165 3rd Quartile 3.14% 3.16% 174 3.64% 3.99% 164 2.85% 3.08% 167 4th Quartile (6.70%) (6.20%) 174 (6.41%) (5.17%) 167 (7.04%) (6.36%) 168 Total Population 6.39% 6.48% 690 6.46% 6.63% 658 5.93% 6.16% 663 Excluded Cost Reports 107 106 87 Total Cost Reports 797 764 750Notes:• 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. Total Operating Profit Margin - SummaryTotal Operating Profit MarginAll Investor Owned General Acute Care 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 25 Beds or Less 3.21% 2.36% 76 3.64% 3.19% 85 2.27% 4.65% 94 26 to 100 Beds 5.46% 4.61% 166 5.10% 5.69% 187 5.03% 5.05% 199 101 to 200 Beds 6.59% 6.55% 196 6.01% 6.25% 210 4.98% 5.70% 217 201 to 300 Beds 8.51% 9.65% 85 7.33% 8.32% 87 7.54% 9.38% 86 301 to 400 Beds 7.77% 8.46% 42 6.38% 6.06% 46 6.88% 8.20% 48 401 to 500 Beds 6.38% 5.50% 21 6.37% 5.66% 24 6.29% 6.29% 24 Over 500 Beds 8.55% 8.84% 18 6.58% 6.61% 17 6.64% 7.89% 17 Total All Hospitals 6.26% 6.52% 604 5.67% 6.18% 656 5.16% 5.76% 685 Excluded Cost Reports 96 108 108 Total Cost Reports 700 764 793 2006 2005 2004 Number of Licensed Beds Mean Median Count Mean Median Count Mean Median Count 25 Beds or Less 1.23% 0.89% 94 0.45% 0.46% 74 1.14% (1.71%) 58 26 to 100 Beds 5.14% 6.15% 201 5.35% 6.55% 200 3.62% 4.26% 197 101 to 200 Beds 4.42% 4.99% 216 4.59% 4.91% 208 4.66% 5.56% 216 201 to 300 Beds 7.90% 9.65% 90 7.15% 7.50% 90 6.51% 6.31% 94 301 to 400 Beds 6.48% 5.46% 45 5.69% 5.91% 49 5.73% 8.62% 53 401 to 500 Beds 4.88% 4.31% 23 4.10% 4.21% 19 4.42% 5.34% 22 Over 500 Beds 6.69% 7.59% 20 7.42% 4.97% 20 6.42% 7.96% 18 Total All Hospitals 4.87% 5.82% 689 4.86% 5.22% 660 4.43% 5.21% 658 Excluded Cost Reports 108 104 92 Total Cost Reports 797 764 750Notes:• 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 Investor Owned General Acute Care Hospitals in the United States with 25 Licensed Beds or Less 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 20.04% 20.39% 19 20.25% 19.38% 21 19.57% 18.97% 23 2nd Quartile 8.57% 8.94% 19 9.69% 10.02% 21 9.53% 9.92% 23 3rd Quartile (1.36%) (0.53%) 19 0.21% 0.27% 21 (1.64%) (1.13%) 24 4th Quartile (14.41%) (13.46%) 19 (14.72%) (15.96%) 22 (17.35%) (17.54%) 24 Total Population 3.21% 2.36% 76 3.64% 3.19% 85 2.27% 4.65% 94 Excluded Cost Reports 20 33 28 Total Cost Reports 96 118 122 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 19.01% 19.02% 23 19.46% 19.29% 18 18.72% 17.35% 14 2nd Quartile 7.41% 7.03% 23 7.04% 7.40% 18 7.06% 5.69% 14 3rd Quartile (3.89%) (3.09%) 24 (4.49%) (3.38%) 19 (4.52%) (5.03%) 15 4th Quartile (16.62%) (16.99%) 24 (18.86%) (20.35%) 19 (15.11%) (12.75%) 15 Total Population 1.23% 0.89% 94 0.45% 0.46% 74 1.14% (1.71%) 58 Excluded Cost Reports 33 20 22 Total Cost Reports 127 94 80Notes:• 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 Investor Owned General Acute Care Hospitals in the United States with Between 26 and 100 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 20.44% 20.61% 41 20.28% 20.86% 46 19.18% 18.48% 49 2nd Quartile 10.05% 9.47% 41 9.91% 9.85% 47 9.89% 10.13% 50 3rd Quartile 0.86% 0.53% 42 2.01% 2.42% 47 1.69% 1.95% 50 4th Quartile (9.04%) (8.35%) 42 (11.49%) (10.15%) 47 (10.36%) (8.44%) 50 Total Population 5.46% 4.61% 166 5.10% 5.69% 187 5.03% 5.05% 199 Excluded Cost Reports 34 33 31 Total Cost Reports 200 220 230 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 20.78% 20.69% 50 18.88% 18.54% 50 18.21% 16.97% 49 2nd Quartile 10.95% 11.03% 50 10.58% 10.22% 50 8.40% 8.73% 49 3rd Quartile 1.68% 2.37% 50 2.46% 2.63% 50 (0.00%) (0.31%) 49 4th Quartile (12.49%) (12.04%) 51 (10.51%) (8.96%) 50 (11.83%) (11.68%) 50 Total Population 5.14% 6.15% 201 5.35% 6.55% 200 3.62% 4.26% 197 Excluded Cost Reports 28 29 30 Total Cost Reports 229 229 227Notes:• 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. Peer Group Comparison – Total Operating Profit MarginTotal Operating Profit MarginAll Investor Owned General Acute Care 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 20.26% 20.33% 49 18.76% 18.29% 52 18.59% 17.98% 54 2nd Quartile 10.44% 11.01% 49 10.04% 10.07% 52 9.18% 9.40% 54 3rd Quartile 3.33% 3.28% 49 2.46% 2.20% 53 1.50% 1.27% 54 4th Quartile (7.67%) (5.95%) 49 (6.89%) (5.58%) 53 (9.10%) (7.33%) 55 Total Population 6.59% 6.55% 196 6.01% 6.25% 210 4.98% 5.70% 217 Excluded Cost Reports 26 27 32 Total Cost Reports 222 237 249 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 18.63% 18.50% 54 18.63% 18.36% 52 18.78% 18.60% 54 2nd Quartile 9.37% 9.28% 54 8.47% 8.52% 52 9.14% 8.90% 54 3rd Quartile 0.22% (0.29%) 54 1.21% 0.98% 52 1.52% 1.94% 54 4th Quartile (10.53%) (8.34%) 54 (9.96%) (9.12%) 52 (10.79%) (9.46%) 54 Total Population 4.42% 4.99% 216 4.59% 4.91% 208 4.66% 5.56% 216 Excluded Cost Reports 32 41 27 Total Cost Reports 248 249 243Notes:• 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 Operating Profit MarginTotal Operating Profit MarginAll Investor Owned General Acute Care 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 19.33% 19.96% 21 18.88% 19.93% 21 19.05% 17.59% 21 2nd Quartile 12.14% 11.25% 21 10.97% 11.01% 22 11.82% 11.80% 21 3rd Quartile 7.05% 6.50% 21 5.34% 5.22% 22 5.27% 5.15% 22 4th Quartile (3.87%) (0.79%) 22 (5.33%) (4.48%) 22 (5.27%) (3.95%) 22 Total Population 8.51% 9.65% 85 7.33% 8.32% 87 7.54% 9.38% 86 Excluded Cost Reports 10 11 14 Total Cost Reports 95 98 100 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 20.33% 20.38% 22 20.11% 19.02% 22 19.40% 19.43% 23 2nd Quartile 12.72% 12.78% 22 10.80% 10.77% 22 10.93% 11.16% 23 3rd Quartile 5.71% 5.74% 23 4.02% 3.75% 23 2.97% 2.53% 24 4th Quartile (6.40%) (2.89%) 23 (5.62%) (3.14%) 23 (6.55%) (4.71%) 24 Total Population 7.90% 9.65% 90 7.15% 7.50% 90 6.51% 6.31% 94 Excluded Cost Reports 11 10 8 Total Cost Reports 101 100 102Notes:• 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 Operating Profit MarginTotal Operating Profit MarginAll Investor Owned General Acute Care Hospitals in the United States with Between 301 and 400 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 18.63% 17.94% 10 19.17% 17.90% 11 18.40% 18.47% 12 2nd Quartile 12.07% 13.05% 10 9.60% 9.36% 11 10.45% 10.24% 12 3rd Quartile 6.16% 6.28% 11 3.83% 4.69% 12 4.44% 3.90% 12 4th Quartile (4.41%) (4.28%) 11 (5.74%) (4.58%) 12 (5.74%) (5.58%) 12 Total Population 7.77% 8.46% 42 6.38% 6.06% 46 6.88% 8.20% 48 Excluded Cost Reports 4 3 2 Total Cost Reports 46 49 50 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 19.23% 19.22% 11 19.84% 19.98% 12 19.04% 19.44% 13 2nd Quartile 10.11% 10.68% 11 11.04% 10.11% 12 10.64% 10.09% 13 3rd Quartile 3.57% 3.98% 11 1.98% 2.22% 12 3.87% 3.30% 13 4th Quartile (5.85%) (4.55%) 12 (8.88%) (5.80%) 13 (9.47%) (6.70%) 14 Total Population 6.48% 5.46% 45 5.69% 5.91% 49 5.73% 8.62% 53 Excluded Cost Reports 3 1 1 Total Cost Reports 48 50 54Notes:• 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 Operating Profit MarginTotal Operating Profit MarginAll Investor Owned General Acute Care Hospitals in the United States with Between 401 and 500 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 19.01% 22.28% 5 18.29% 18.57% 6 20.63% 19.76% 6 2nd Quartile 8.98% 9.47% 5 8.24% 7.26% 6 9.41% 8.27% 6 3rd Quartile 2.81% 2.35% 5 3.06% 4.31% 6 1.25% 0.56% 6 4th Quartile (3.34%) (2.36%) 6 (4.11%) (3.58%) 6 (6.14%) (3.88%) 6 Total Population 6.38% 5.50% 21 6.37% 5.66% 24 6.29% 6.29% 24 Excluded Cost Reports 2 0 0 Total Cost Reports 23 24 24 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 20.26% 19.52% 5 17.66% 16.31% 4 17.67% 17.14% 5 2nd Quartile 9.92% 9.18% 6 8.65% 10.28% 5 9.14% 9.43% 5 3rd Quartile 1.21% 1.55% 6 0.13% (0.38%) 5 1.92% 2.07% 6 4th Quartile (9.31%) (8.28%) 6 (7.33%) (7.05%) 5 (8.06%) (6.69%) 6 Total Population 4.88% 4.31% 23 4.10% 4.21% 19 4.42% 5.34% 22 Excluded Cost Reports 1 3 2 Total Cost Reports 24 22 24Notes:• 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 Operating Profit MarginTotal Operating Profit MarginAll Investor Owned General Acute Care Hospitals in the United States with Over 500 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 21.36% 20.61% 4 18.49% 18.70% 4 17.85% 17.27% 4 2nd Quartile 13.72% 13.70% 4 10.12% 10.51% 4 10.83% 10.78% 4 3rd Quartile 6.08% 6.32% 5 4.33% 5.40% 4 3.32% 2.41% 4 4th Quartile (3.35%) (2.96%) 5 (4.00%) (5.07%) 5 (3.01%) (3.53%) 5 Total Population 8.55% 8.84% 18 6.58% 6.61% 17 6.64% 7.89% 17 Excluded Cost Reports 0 1 1 Total Cost Reports 18 18 18 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 18.33% 16.43% 5 20.81% 21.23% 5 14.12% 14.10% 4 2nd Quartile 10.53% 9.26% 5 10.98% 10.90% 5 10.06% 10.13% 4 3rd Quartile 2.72% 0.36% 5 1.71% 1.13% 5 6.17% 7.50% 5 4th Quartile (4.82%) (3.07%) 5 (3.81%) (2.77%) 5 (2.42%) (0.92%) 5 Total Population 6.69% 7.59% 20 7.42% 4.97% 20 6.42% 7.96% 18 Excluded Cost Reports 0 0 2 Total Cost Reports 20 20 20Notes:• 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 Operating Profit MarginTotal Operating Profit MarginAll Investor Owned General Acute Care 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 20.03% 20.12% 149 19.41% 19.38% 161 18.99% 18.47% 169 2nd Quartile 10.48% 10.51% 149 9.99% 10.06% 163 9.90% 9.93% 170 3rd Quartile 2.85% 2.98% 152 2.60% 2.67% 165 1.84% 2.02% 172 4th Quartile (7.79%) (6.44%) 154 (8.74%) (7.47%) 167 (9.60%) (8.04%) 174 Total Population 6.26% 6.52% 604 5.67% 6.18% 656 5.16% 5.76% 685 Excluded Cost Reports 96 108 108 Total Cost Reports 700 764 793 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 19.61% 19.54% 170 19.13% 18.78% 163 18.56% 17.76% 162 2nd Quartile 10.10% 10.35% 171 9.54% 9.78% 164 9.13% 9.49% 162 3rd Quartile 1.12% 1.22% 173 1.36% 1.44% 166 1.07% 1.54% 166 4th Quartile (10.87%) (9.50%) 175 (10.19%) (8.83%) 167 (10.42%) (9.27%) 168 Total Population 4.87% 5.82% 689 4.86% 5.22% 660 4.43% 5.21% 658 Excluded Cost Reports 108 104 92 Total Cost Reports 797 764 750Notes:• 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. Total Labor Cost as a Percentage of Total Operating Revenues - SummaryTotal Labor Cost as a Percentage of Total Operating RevenuesAll Investor Owned General Acute Care 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 25 Beds or Less 42.84% 40.62% 61 43.59% 40.46% 71 44.48% 43.43% 69 26 to 100 Beds 42.90% 40.77% 170 44.35% 42.50% 186 43.58% 43.19% 197 101 to 200 Beds 42.98% 41.94% 207 43.92% 42.54% 224 44.79% 44.16% 239 201 to 300 Beds 41.55% 40.13% 91 42.64% 41.13% 96 43.00% 41.72% 97 301 to 400 Beds 44.24% 43.69% 45 44.72% 45.15% 49 44.29% 44.25% 50 401 to 500 Beds 46.17% 44.86% 22 45.87% 45.51% 24 46.40% 45.08% 24 Over 500 Beds 42.66% 41.55% 18 44.51% 43.71% 18 44.24% 43.32% 18 Total All Hospitals 42.93% 41.49% 614 43.97% 42.45% 668 44.17% 43.56% 694 Excluded Cost Reports 86 96 99 Total Cost Reports 700 764 793 2006 2005 2004 Number of Licensed Beds Mean Median Count Mean Median Count Mean Median Count 25 Beds or Less 44.99% 43.57% 79 44.79% 42.61% 62 48.59% 48.40% 51 26 to 100 Beds 43.55% 42.35% 191 44.58% 43.27% 200 44.89% 43.99% 201 101 to 200 Beds 45.39% 44.09% 234 45.44% 44.44% 239 45.45% 44.16% 233 201 to 300 Beds 42.90% 41.46% 98 43.81% 42.31% 98 44.12% 42.39% 100 301 to 400 Beds 44.53% 44.73% 48 45.32% 44.68% 50 44.52% 44.03% 52 401 to 500 Beds 46.14% 43.95% 24 45.71% 45.71% 22 46.29% 46.06% 24 Over 500 Beds 44.36% 42.57% 20 43.56% 42.36% 20 44.30% 43.43% 19 Total All Hospitals 44.42% 42.83% 694 44.85% 43.55% 691 45.25% 43.92% 680 Excluded Cost Reports 103 73 70 Total Cost Reports 797 764 750Notes:• 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 – Total Labor Cost as a Percent of Total Op. Rev.Total Labor Cost as a Percentage of Total Operating RevenuesAll Investor Owned General Acute Care Hospitals in the United States with 25 Licensed Beds or Less 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 32.04% 32.42% 15 31.61% 31.62% 17 31.67% 31.84% 17 2nd Quartile 36.44% 36.21% 15 36.56% 36.19% 18 38.40% 38.15% 17 3rd Quartile 45.63% 46.09% 15 46.84% 48.48% 18 47.34% 48.25% 17 4th Quartile 56.35% 53.92% 16 58.69% 57.30% 18 59.62% 58.07% 18 Total Population 42.84% 40.62% 61 43.59% 40.46% 71 44.48% 43.43% 69 Excluded Cost Reports 35 47 53 Total Cost Reports 96 118 122 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 31.89% 32.07% 19 31.16% 31.17% 15 34.14% 34.32% 12 2nd Quartile 39.01% 39.35% 20 37.77% 37.65% 15 40.21% 39.23% 13 3rd Quartile 48.31% 48.33% 20 48.63% 49.79% 16 53.99% 56.28% 13 4th Quartile 60.12% 58.73% 20 60.31% 61.29% 16 64.89% 64.29% 13 Total Population 44.99% 43.57% 79 44.79% 42.61% 62 48.59% 48.40% 51 Excluded Cost Reports 48 32 29 Total Cost Reports 127 94 80Notes:• 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 – Total Labor Cost as a Percent of Total Op. Rev.Total Labor Cost as a Percentage of Total Operating RevenuesAll Investor Owned General Acute Care Hospitals in the United States with Between 26 and 100 Licensed Beds 2009 2008 2007 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 33.61% 33.93% 42 33.81% 34.29% 46 33.77% 34.27% 49 2nd Quartile 38.70% 39.05% 42 39.98% 39.76% 46 39.62% 39.72% 49 3rd Quartile 44.01% 43.60% 43 45.64% 45.52% 47 45.67% 45.35% 49 4th Quartile 54.98% 53.17% 43 57.65% 56.33% 47 55.01% 54.82% 50 Total Population 42.90% 40.77% 170 44.35% 42.50% 186 43.58% 43.19% 197 Excluded Cost Reports 30 34 33 Total Cost Reports 200 220 230 2006 2005 2004 Quartile Rank Mean Median Count Mean Median Count Mean Median Count 1st Quartile 33.59% 33.67% 47 34.00% 34.28% 50 34.41% 35.02% 50 2nd Quartile 39.27% 39.20% 48 40.28% 40.24% 50 40.71% 40.99% 50 3rd Quartile 45.36% 45.40% 48 46.60% 46.78% 50 47.36% 47.18% 50 4th Quartile 55.78% 54.42% 48 57.44% 56.48% 50 56.84% 55.55% 51 Total Population 43.55% 42.35% 191 44.58% 43.27% 200 44.89% 43.99% 201 Excluded Cost Reports 38 29 26 Total Cost Reports 229 229 227Notes:• 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

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