- 8 Guided By The Limited Information Provided In The Case What Are Your Top Three Or Four Recommendations To The Board 1 (6.16 KiB) Viewed 21 times
CASE 24 RIVER COMMUNITY HOSPITAL (A): Assessing Hospital Performance Case 24 presents the opportunity to conduct an extensive financial statement and operating indicator analysis on a 210-bed not-for-profit hospital. Statements of Operations (Millions of Dollars): 2015 2016 $28.796 $30.576 1.237 $30.033 Revenues Net patient service revenue Other revenue Total revenues Expenses Salaries and wages Fringe benefits Interest expense Depreciation Medical supplies and drugs Professional liability Other Total expenses Net income Balance Sheets (Millions of Dollars): Assets Cash and investments Accounts receivable (net) Inventories Other current assets Total current assets 2017 $34.582 1.853 1.834 $32.429 $36.416 $ 12.245 $12.468 $13.994 1.830 2.408 2.568 1.181 1.598 1.776 2.350 2.658 2.778 0.622 0.655 0.776 0.140 0.201 0.218 9.036 10.339 11.848 $27.404 $30.327 $33.958 $ 2.629 $ 2.102 $ 2.458 2015 2016 2017 $ 4.673 $ 5.069 $ 2.795 4.359 5.674 7.413 0.432 0.523 0.601 0.308 0.703 0.923 $ 9.772 $11.969 $11.732
Gross plant and equipment Accumulated depreciation Net plant and equipment Total assets Liabilities and Net Assets Accounts payable Accruals Current portion of long-term debt Total current liabilities Long-term debt Net assets Total liabilities and net assets Change in accounts receivable Change in inventories Change in other current assets Change in accounts payable Change in accruals Net cash flow from operations $47.786 $55.333 $59.552 14.338 17.009 11.820 $35.966 $40.995 $42.543 Cash Flows from Investing Activities Investment in plant and equipment $45.738 $52.964 $54.275 Statements of Cash Flows (Millions of Dollars): Cash Flows from Operating Activities Net income Depreciation $ 0.928 $ 1.253 $ 1.760 1.460 1.503 1.176 0.110 1.341 1.465 $ 2.498 $ 4.097 $ 4.401 $15.673 $19.222 $17.795 $27.567 $29.645 $32.079 $45.738 $52.964 Cash Flows from Financing Activities Change in long-term debt Change in current portion of long-term debt Net cash flow from financing $54.275 2016 $ 2.102 2.633 2.756 (1.315) (1.739) (0.091) (0.078) (0.395) (0.220) 0.325 0.507 2017 $2.458 0.043 (0.327) $ 3.302 $ 3.357 S (7.686) S (4.328) $ 3.549 $(1.427) 1.231 0.124 S 4.780 S (1.303)
Net increase (decrease) in cash and investments Beginning cash and investments $ 0.396 $(2.274) 4.673 5.069 Ending cash and investments $5.069 $2.795 Note: The depreciation and fixed asset acquisitions data in the statements of cash flows are somewhat different from what they would be if calculated directly from the other financial statements because of asset revaluations. Operating Revenue and Expense Allocation (Millions of Dollars): Operating revenue Gross inpatient service Gross outpatient service Gross patient service revenue Contractual allowances Bad debt and charity care Total revenue deductions Net patient service revenue Operating expenses Inpatient service Outpatient service Total operating expenses Selected Operating Data: Medicare discharges Total discharges Outpatient visits 2015 2016 $26.117 $29.148 6.535 9.130 $32.652 $38.278 $ 1.729 $ 5.196 2.127 2.506 $ 3.856 $ 7.702 2015 $28.796 $30.576 $34.582 2016 2017 $20.573 $22.229 $24.771 6.831 8.098 $27.404 $30.327 2,721 8,784 32,285 32,878 2,860 8,318 $33.216 11.912 $45.128 $ 7.516 3.030 $10.546 9.187 $33.958 2017 2,741 8,576 36,796
Licensed beds Staffed beds Patient days All-payer case-mix index Full-time equivalents Selected Financial Ratios: Profitability Ratios Total margin Return on assets Return on equity Deductible ratio Liquidity Ratios Current ratio Days cash on hand Debt Management Ratios Debt ratio Debt to equity Times interest earned Cash flow coverage Asset Management Ratios Fixed asset turnover Total asset turnover Current asset turnover Days in patient accounts receivable Average payment period (days) 210 193 2015 44,085 42,434 40,062 1.2869 1.2993 1.3161 610.8 625.8 619.3 8.75% 5.75% 9.54% 0.12 3.91 68.08 210 197 0.84 0.66 3.07 55.25 36.39 2016 2.92 66.87 210 178 6.48% 6.75% 3.97% 4.53% 7.09% 7.66% 0.20 0.23 2.32 3.98 2017 39.73% 44.03% 40.90% 56.85% 64.84% 55.47% 3.23 5.22 0.79 0.61 2.71 67.73 54.05 2.67 32.72 2.38 3.95 0.86 0.67 3.10 78.24 51.52 2017 Industry Data (200-299 Beds) +Quartile Median -Quartile 5.58% 3.48% 5.80% 3.10% 15.66% 6.01% 0.34 0.26 2.53 32.35 1.99 15.89 4.29 5.32 62.90% 48.40% 35.20% 127.00% 64.70% 26.90% 2.23 3.22 0.53% 0.40% 0.62% 0.18 2.20 1.76 1.04 0.89 3.94 3.38 87.53 75.67 71.24 56.52 1.48 6.24 1.14 1.76 1.49 0.75 2.88 63.33 45.84
Selected Operating Indicators: Frofit Indicators Profit per inpatient discharge Profit per outpatient visit Net Revenue Indicators Net revenue per discharge Net revenue per visit Medicare revenue percentage Bad debt charity care percentage Contractual allow ance percentage Outpatient revenue percentage Volume Indicators Occupancy rate Average daily census Length of Stay Indicators Average length of stay (days) Adjusted length of stay Expense Indicators Expense per discharge Expense per adjusted discharge Expense per visit All-payer case-mix index Efficiency Indicator FTES per occupied bed Labor hours/visit Unit Cost Indicators Salary per FTE Fringe benefits percentage Liability expense per discharge 2015 $280.03 $126.72 $79.61 ($33.07) ($24.49) ($1.60) 2016 $2,622 $2,799 $2,968 $179 $222 $248 30.98% 34.38% 31.96% 6.51% 5.30% 20.01% 6.55% 6.71% 13.57% 16.65% 23.85% 26.40% 5.02 3.90 62.58% 59.01% 61.66% 120.78 116.26 109.76 4.04 7.88 2017 $20,047 14.94% $15.94 5.10 3.93 $2,342 $2,672 $2,888 $1,820 $2,057 $2,195 $212 $246 1.2869 1.2993 4.10 9.44 4.67 3.55 $250 1.3161 4.15 9.24 $19,923 $22,596 19.31% 18.35% $24.16 $25.42 2017 Industry Data (200-299 Beds) +Quartile Median -Quartile $89.04 ($21.30) ($120.08) $6.22 $0.66 ($7.01) $3,411 $2,815 $139 $98 36.60% 31.25% 4.76% 2.97% 25.27% 20.02% 12.12% 25.26% 21.03% 17.44% $4,091 $201 43.47% 7.89% 67.12% 58.10% 47.84% 173.23 144.73 114.39 6.80 6.48 6.07 5.36 4.59 8.66 5.41 4.52 $3,937 $3,392 $3,417 $2,924 $202.23 $141.97 $111.53 1.2795 1.1756 1.0259 4.15 5.84 $2,972 $2,572 3.77 4.68 $24,447 $22,517 $20,347 19.58% 17.04% 15.18% $80.94 $42.05 $18.31