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Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 1
Finding Opportunities to Succeedin an Uncertain Environment
Presented by
Mark Sharp, CPABKD, LLPSpringfield, [email protected]
Objectives
• Describe the current environment• Provide an overview of how to evaluate an
agency’s financial performance• Identify key drivers for revenues and expenses• Discuss best practices based on evidence-based
benchmarks
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Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 2
The Environment
• Economy and Medicare in general• Industry profit margins• Influx of new providers• Industry compliance concerns
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Medicare Home Health – Where Have We Been
4
Year
Change in Medicare Base Rate
Market Basket (Inflation in
Costs)
Loss in Rate Compared to
Market Basket
2008 0.25% 3.00% -2.75%2009 0.15% 2.90% -2.75%2010 1.75% 2.00% -0.25%2011 -5.19% 2.10% -7.29%2012 -2.39% 2.40% -4.79%
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 3
Medicare Home Health – Where Have We Been
2008 2009 201015.2% 15.3% 15.8%
5
Medicare Home Health – Where Have We Been
2008 2009 201012.5% 13.2% 13.6%
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Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 4
Medicare Home Health – Where Have We Been
2008 2009 20104.0% 5.3% 4.8%
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Medicare Home Health – Where Are We Going
8
Year
ForecastedChange in Medicare Base Rate
ForecastedMarket Basket
(Inflation in Costs)
Forecasted Loss in Rate Compared to
Market Basket
2013 -3.00% 2.50% -5.50%2014 0.00% 2.50% -2.50%2015 -1.00% 2.50% -3.50%2016 -1.00% 2.50% -3.50%2017 -1.00% 2.50% -3.50%
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 5
Your Margin
Can your margins sustain continued reductions or no
increases in Medicare rates?
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Impact on Margins
Base2010 2011 2012 2013 2014 2015 2016 2017
Rate Change -5.19% -2.39% -3.00% 0.00% -1.00% -1.00% -1.00%
Inflation in Costs 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50%
Payment per episode $2,500 $2,370 $2,313 $2,244 $2,244 $2,222 $2,200 $2,178
Cost per episode $2,100 $2,153 $2,207 $2,262 $2,319 $2,377 $2,436 $2,497
Margin per episode $400 $217 $106 ($18) ($75) $(155) $(236) $(319)
Margin % 16.0% 9.2% 4.6% -0.8% -3.3% -7.0% -10.7% -14.6%
No Efficiency Gains
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Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 6
Impact on Margins
Base2010 2011 2012 2013 2014 2015 2016 2017
Rate Change -5.19% -2.39% -3.00% 0.00% -1.00% -1.00% -1.00%
Inflation in Costs 2.50% 2.50% 2.50% 2.50% 2.50% 2.50% 2.50%
Payment per episode $2,500 $2,370 $2,313 $2,244 $2,244 $2,222 $2,200 $2,178
Cost per episode $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100
Margin per episode $400 $270 $213 $144 $144 $122 $100 $78
Margin % 16.0% 11.4% 9.2% 6.4% 6.4% 5.5% 4.5% 3.6%
Efficiency Gains Offset Inflation in Costs
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Strategies for Success
• Ensure revenue accuracy OASIS accuracy Episode mix Negotiate fair rates
• Manage costs Episode management Maximize efficiencies
• Front line staff• Back office staff
Reinvent care delivery12
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 7
Evaluating Your Agency’s Performance
• Start at high level• Benchmark against others• Drill down where off targets/benchmarks• Study reasons behind performance indicators• Consider alternatives
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Overall Profitability
• Consists of Revenues (payments) Expenses (costs) Payer mix Program mix
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SHP Leader MissouriMedian Best 25% Median Best 25%
9.4% 16.6% 4.4% 11.3%
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 8
Medicare Profitability
• Consists of Revenues (payments) Expenses (costs)
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SHP Leader MissouriMedian Best 25% Median Best 25%
22.8% 31.7% 9.9% 24.9%
Revenue
• Medicare payments Tied to
• Clinical assessments• Service utilization
• Non-Medicare payments Negotiated rates
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Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 9
Medicare Payment Per Episode
• Consists of Average case mix weight Episode adjustments Recert rate/episodes per patient
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SHP Leader MissouriMedian Best 25% Median Best 25%
$3,018 $3,383 $2,462 $2,858
Average Case Mix Weight
• OASIS Accuracy Paint the right picture Team collaboration Clinician training Proper service mix
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SHP Leader MissouriMedian Best 25% Median Best 25%
1.4185 1.6127 1.3103 1.4828
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 10
LUPA Episode Adjustments
• Episode Management LUPAs happen, be compliant Proper discharge practices Good clinical outcomes
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SHP Leader MissouriMedian Best 25% Median Best 25%
9.4% 5.1% 10.9% 7.6%
Episodes per Patient
• Episode Management Proper discharge practices Good clinical outcomes
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SHP Leader MissouriMedian Best 25% Median Best 25%
1.4 1.8 1.4 1.7
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 11
Direct Costs
• Related to service delivery Wages and benefits Contract services Travel Medical supplies
• Efficiency is the key Visits per episode Cost per visit
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Indirect Costs
• Support costs Wages and benefits Contract fees Education Office rent Office equipment Office supplies, postage, etc.
• Administrative and capital
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Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 12
Direct Cost Per Episode
• Consists of Visits per episode Direct cost per visit Medical supplies
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SHP Leader MissouriMedian Best 25% Median Best 25%
$1,277 $1,054 $1,245 $1,020
Visits per Episode
• Episode Management Team collaboration Patient participation Manage care by the episode, not the visit Effective use of technology
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SHP Leader MissouriMedian Best 25% Median Best 25%
16.1 14.0 15.9 13.8
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 13
Direct Cost per Visit - Nursing
• Consists of Direct labor – wages, benefits and contract Direct travel
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SHP Leader MissouriMedian Best 25% Median Best 25%
$71.83 $62.04 $88.54 $65.08
Direct Labor as a % of Revenue
• Consists of Wage rates Employee productivity Benefits package Contract rates
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SHP Leader MissouriMedian Best 25% Median Best 25%
42.6% 35.1% 49.3% 40.2%
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 14
Hourly Wage Rates - Nursing
• Salary, hourly or per-visit• Market appropriate• Experience mix
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Region MissouriMedian Best 25% Median Best 25%
$27.69 $26.38 $28.77 $26.83
Nursing Hours per Nursing Visit
• Productivity standards Visits per day/week Caseload
• Accountability• Incentivize
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SHP Leader MissouriMedian Best 25% Median Best 25%
2.1 1.7 2.5 1.7
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 15
Benefits as a % of Salaries
• Market appropriate• Shop packages• Full time vs. part time• Use of contract services
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SHP Leader MissouriMedian Best 25% Median Best 25%
17.2% 14.5% 18.6% 14.2%
Transportation as a % of Revenue
• Mileage, zone payment or fleet• GPS technology• Market appropriate
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SHP Leader MissouriMedian Best 25% Median Best 25%
2.3% 0.7% 2.9% 1.7%
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 16
Medical Supply Cost Per Episode
• Supply management• Secure storage
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SHP Leader MissouriMedian Best 25% Median Best 25%
$35 $17 $30 $7
Indirect Cost per Episode
• Consists Administrative costs Capital costs
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SHP Leader MissouriMedian Best 25% Median Best 25%
$838 $548 $676 $418
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 17
Administrative Costs as a % of Revenue
• Consists of Indirect labor – wages, benefits and contract Employee productivity Back office management
33
SHP Leader MissouriMedian Best 25% Median Best 25%
32.1% 24.8% 31.9% 27.7%
Administrative Hours per Visit
• Productivity standards• Accountability• Incentivize
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SHP Leader MissouriMedian Best 25% Median Best 25%
1.1 0.8 1.1 0.9
Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 18
Capital Costs as a % of Revenue
• Appropriate space• Proper equipment/technology utilization
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SHP Leader MissouriMedian Best 25% Median Best 25%
2.8% 1.8% 3.3% 2.1%
Summary
• Managing financial performance critical in current environment
• Study current state of your revenues and expenses
• Drill down to identify revenue accuracy and cost reduction opportunities
• Nothing is off the table• Reinvent your operations
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Finding Opportunities to Succeed in an Uncertain Environment
April 27, 2012
2012 Annual ConferenceMissouri Alliance for Home Care 19
4/23/2012
2010 Medicare Home Health Operations Dashboard ReportPeer Group Data1 State Data1 National Data1
All Missouri All United StatesMedicare Certified Medicare Certified
Measure Agencies Agencies
Lower Upper Lower Upper Lower UpperQuartile Median Quartile Quartile Median Quartile Quartile Median Quartile
Number of Agencies Total agencies in peer group data: 71 Total agencies in state data: 161 Total agencies in national data: 9,415Service Delivery Dashboards
Total home health visits 14,933 21,445 37,769 3,660 7,009 14,321 4,736 10,222 21,145 Total visits for other services4 - - - - - - - - - Total net patient revenue4 2,419,146$ 4,591,637$ 8,390,642$ 895,927$ 1,666,987$ 3,445,994$ 759,246$ 1,615,741$ 3,503,957$ Total Medicare episodes 610 1,082 1,699 189 331 665 179 385 809 Total Medicare home health revenue 1,700,590$ 2,729,136$ 4,427,432$ 426,783$ 817,574$ 1,582,032$ 470,282$ 1,035,316$ 2,218,939$ Total home health unduplicated patients4 528 1,036 1,644 163 285 829 119 274 674 Total unduplicated patients for other services4 - - - - - - - - - Payer mix, measured on total visits
Medicare 60.9% 76.8% 93.8% 65.9% 78.5% 87.3% 62.3% 85.3% 99.7%Other 6.3% 23.2% 39.1% 12.7% 21.5% 34.1% 0.3% 14.7% 37.7%
Payer mix, measured on unduplicated patients4
Medicare 54.0% 71.8% 95.2% 61.9% 77.4% 88.0% 60.9% 85.3% 100.0%Other 4.9% 28.2% 46.0% 12.0% 22.6% 38.1% 0.0% 14.7% 39.1%
Visits per Medicare episode (all episodes)Skilled nursing 7.1 8.1 9.4 6.5 7.9 9.2 7.0 8.5 11.1 Physical therapy 3.5 4.6 6.2 3.7 4.7 6.1 2.9 4.3 6.1 Occupational therapy 0.6 1.1 1.8 0.3 0.7 1.4 0.2 0.6 1.3 Speech therapy 0.1 0.1 0.2 0.0 0.1 0.2 - 0.1 0.2 Medical social services 0.1 0.1 0.2 - 0.0 0.1 - 0.1 0.2 Home health aide 0.8 1.5 2.8 0.9 1.7 2.6 0.9 2.1 4.2
Total visits per episode 14.0 16.1 18.6 13.8 15.9 17.9 14.6 17.5 21.5 Total therapy visits per episode 4.3 5.8 8.1 4.5 5.6 7.5 3.5 5.3 7.7
Skilled nursing 7.7 8.7 10.3 6.9 8.5 9.9 7.7 9.1 11.8 Physical therapy 3.8 5.1 6.7 4.1 5.2 6.4 3.1 4.8 6.7 Occupational therapy 0.7 1.2 2.0 0.3 0.8 1.6 0.2 0.7 1.5 Speech therapy 0.1 0.1 0.3 0.0 0.1 0.2 - 0.1 0.2 Medical social services 0.1 0.1 0.2 - 0.0 0.1 - 0.1 0.2 Home health aide 0.9 1.8 3.1 1.1 1.8 2.9 1.0 2.3 4.6
Total visits per episode 15.5 17.7 20.0 15.5 17.4 19.8 16.1 19.0 22.9 Total therapy visits per episode 5.0 6.4 8.7 4.9 6.4 8.2 3.8 5.9 8.4
Visits per Medicare LUPA episode 2.6 2.7 2.8 2.6 2.7 2.9 2.5 2.7 2.9
Health Care Group | www.bkd.com Questions? Contact Mark Sharp at [email protected].
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2010 SHP Benchmark Leaders
Visits per Medicare full episode (including outliers)
4/23/2012
2010 Medicare Home Health Operations Dashboard ReportPeer Group Data1 State Data1 National Data1
All Missouri All United StatesMedicare Certified Medicare Certified
Measure Agencies Agencies
Lower Upper Lower Upper Lower UpperQuartile Median Quartile Quartile Median Quartile Quartile Median Quartile
2010 SHP Benchmark Leaders
Service Delivery Dashboards (Continued)Number of episodes per Medicare patient 1.2 1.4 1.8 1.3 1.4 1.7 1.3 1.6 2.3 Estimated number of hours per visit
Direct nursing service (based on SN visits) 1.7 2.1 2.6 1.7 2.5 3.2 1.3 2.0 2.7 Home health aide service (based on HHA visits) 1.2 1.7 2.2 1.1 1.8 2.5 1.1 1.6 2.3 Administrative staff 0.8 1.1 1.5 0.9 1.1 1.8 0.9 1.2 1.8 Total staff 2.5 3.2 3.6 2.7 3.4 4.6 2.4 3.1 4.2
Estimated number of visits per day per FTE5
Direct nursing service 3.4 4.2 5.3 2.6 3.5 5.1 3.2 4.5 6.7 Physical therapy service 4.5 5.6 7.2 4.5 6.0 7.8 4.5 6.1 8.6 Occupational therapy service 3.9 5.3 6.7 3.8 5.8 7.3 3.9 5.7 8.3 Speech therapy service 3.0 5.6 6.8 3.1 5.0 7.2 3.4 5.2 7.6 Medical social services 1.4 3.2 6.1 1.3 2.2 5.1 1.1 2.8 5.9 Home health aide service 3.9 4.9 6.7 3.4 4.8 7.6 3.8 5.4 7.8
Operating DashboardsCost Per VisitSkilled nursing
Salaries4 47.97$ 55.40$ 73.56$ 48.46$ 60.94$ 78.90$ 34.56$ 51.04$ 67.71$ Employee benefits4 6.87 8.74 11.80 6.08 10.77 19.76 1.93 6.28 10.99 Contract services4 - - 0.13 - - 0.65 - - 1.63
Total labor 57.39 69.98 92.57 58.58 83.98 107.62 47.46 65.16 88.96 Transportation - 3.61 5.67 - 5.33 7.67 - - 4.59 Other direct costs - - - - - - - - -
Total direct care costs 62.04 71.83 96.78 65.08 88.54 114.51 49.44 68.31 93.61 Indirect agency costs 38.24 55.43 73.09 30.31 47.99 64.25 38.39 57.10 84.06
Total agency cost per visit 110.93 139.28 162.27 111.34 136.32 167.84 102.43 130.98 168.46 Provider-based overhead costs3 35.98 45.56 78.65 41.13 65.24 78.64 34.57 49.98 70.99
Total cost per visit 117.45$ 142.19$ 166.42$ 118.90$ 152.92$ 207.47$ 105.28$ 136.17$ 178.91$
Health Care Group | www.bkd.com Questions? Contact Mark Sharp at [email protected].
2 of 7
4/23/2012
2010 Medicare Home Health Operations Dashboard ReportPeer Group Data1 State Data1 National Data1
All Missouri All United StatesMedicare Certified Medicare Certified
Measure Agencies Agencies
Lower Upper Lower Upper Lower UpperQuartile Median Quartile Quartile Median Quartile Quartile Median Quartile
2010 SHP Benchmark Leaders
Operating Dashboards (Continued)Cost Per Visit (Continued )Physical therapy
Salaries4 15.01$ 44.11$ 61.71$ -$ 31.43$ 56.02$ -$ 3.89$ 55.83$ Employee benefits4 0.76 6.21 9.49 - 3.45 11.00 - - 7.74 Contract services4 2.37 16.70 58.60 2.30 25.03 62.93 5.05 52.25 78.40
Total labor 63.96 75.20 85.69 58.56 69.89 82.07 65.33 78.83 93.09 Transportation - 1.16 3.41 - 1.74 6.17 - - 2.43 Other direct costs - - - - - - - - -
Total direct care costs 65.86 76.44 88.04 61.42 73.56 87.67 67.03 80.63 95.26 Indirect agency costs 39.53 53.60 72.87 21.36 38.02 60.01 40.97 66.19 106.28
Total agency cost per visit 109.69 134.17 156.33 93.14 117.25 148.74 118.75 150.92 195.61 Provider-based overhead costs3 18.92 42.97 55.45 27.74 38.85 53.03 26.65 38.68 53.70
Total cost per visit 112.74$ 140.40$ 169.40$ 98.98$ 130.22$ 160.71$ 124.13$ 155.59$ 200.49$ Occupational therapy
Salaries4 0.93$ 44.44$ 63.72$ -$ 25.00$ 61.03$ -$ -$ 57.47$ Employee benefits4 - 5.76 10.19 - - 10.76 - - 7.76 Contract services4 - 11.14 38.13 0.41 31.58 59.94 - 46.15 75.71
Total labor 64.12 73.48 88.68 57.12 70.30 93.93 60.77 76.16 91.53 Transportation - 0.80 3.53 - - 6.52 - - 2.41 Other direct costs - - - - - - - - -
Total direct care costs 65.10 74.74 88.68 59.91 75.59 99.59 62.23 78.23 94.42 Indirect agency costs 35.82 54.07 76.66 23.98 42.71 65.83 42.33 67.60 108.48
Total agency cost per visit 101.04 134.49 171.00 88.77 126.51 160.10 117.21 148.54 192.72 Provider-based overhead costs3 21.41 41.95 64.56 30.76 39.32 64.66 26.39 39.56 56.41
Total cost per visit 109.82$ 138.63$ 171.00$ 99.08$ 133.82$ 180.55$ 121.73$ 153.42$ 198.96$
Health Care Group | www.bkd.com Questions? Contact Mark Sharp at [email protected].
3 of 7
4/23/2012
2010 Medicare Home Health Operations Dashboard ReportPeer Group Data1 State Data1 National Data1
All Missouri All United StatesMedicare Certified Medicare Certified
Measure Agencies Agencies
Lower Upper Lower Upper Lower UpperQuartile Median Quartile Quartile Median Quartile Quartile Median Quartile
2010 SHP Benchmark Leaders
Operating Dashboards (Continued)Cost Per Visit (Continued )Speech therapy
Salaries4 -$ 21.02$ 68.81$ -$ -$ 58.98$ -$ -$ 59.99$ Employee benefits4 - 0.07 9.84 - - 9.56 - - 7.75 Contract services4 - 38.09 65.07 - 50.61 71.14 - 51.21 80.00
Total labor 59.65 76.60 98.98 58.49 74.42 98.84 62.11 80.00 100.00 Transportation - - 5.03 - - 7.43 - - 2.33 Other direct costs - - - - - - - - -
Total direct care costs 59.65 77.90 101.24 63.28 75.89 105.28 64.44 81.98 102.58 Indirect agency costs 37.92 58.86 85.43 25.89 44.54 76.32 42.13 68.76 108.42
Total agency cost per visit 98.84 128.75 196.37 93.95 131.21 174.28 118.20 155.00 204.27 Provider-based overhead costs3 25.20 31.02 52.78 28.29 43.92 65.86 26.07 40.04 57.09
Total cost per visit 103.96$ 131.96$ 196.37$ 104.86$ 144.73$ 195.51$ 123.00$ 160.37$ 209.35$ Medical social services
Salaries4 8.00$ 60.93$ 89.28$ 29.65$ 74.00$ 98.02$ -$ 36.48$ 80.55$ Employee benefits4 - 9.45 14.60 0.57 9.91 21.49 - 0.40 12.38 Contract services4 - - 35.84 - - 7.45 - - 75.00
Total labor 68.87 88.56 119.29 68.53 95.34 154.85 66.32 85.72 125.00 Transportation - 3.63 7.86 - 2.89 9.65 - - 4.80 Other direct costs - - - - - - - - -
Total direct care costs 71.87 95.39 142.77 73.83 104.41 173.76 69.20 89.06 130.00 Indirect agency costs 53.57 81.13 130.49 41.91 72.31 115.03 54.11 88.35 142.72
Total agency cost per visit 131.30 176.11 299.23 131.27 187.71 273.28 135.51 187.57 263.91 Provider-based overhead costs3 51.06 71.84 112.71 39.21 93.38 173.01 39.97 68.78 117.01
Total cost per visit 146.23$ 188.80$ 299.23$ 134.83$ 192.81$ 299.00$ 139.26$ 191.36$ 271.85$
Health Care Group | www.bkd.com Questions? Contact Mark Sharp at [email protected].
4 of 7
4/23/2012
2010 Medicare Home Health Operations Dashboard ReportPeer Group Data1 State Data1 National Data1
All Missouri All United StatesMedicare Certified Medicare Certified
Measure Agencies Agencies
Lower Upper Lower Upper Lower UpperQuartile Median Quartile Quartile Median Quartile Quartile Median Quartile
2010 SHP Benchmark Leaders
Operating Dashboards (Continued)Cost Per Visit (Continued )Home health aide
Salaries4 15.92$ 20.27$ 27.55$ 14.96$ 22.44$ 31.54$ 13.10$ 19.58$ 27.04$ Employee benefits4 2.31 3.06 6.20 2.09 3.59 6.13 0.15 2.45 4.37 Contract services4 - - - - - - - - -
Total labor 18.98 24.97 36.81 21.05 29.39 43.96 18.00 25.13 35.46 Transportation - 3.59 5.32 - 3.56 7.17 - - 4.27 Other direct costs - - - - - - - - -
Total direct care costs 23.91 28.65 38.69 24.60 33.87 51.46 20.07 27.67 38.61 Indirect agency costs 15.10 21.31 31.52 9.90 20.40 30.77 14.95 24.19 38.90
Total agency cost per visit 42.47 53.80 65.63 40.28 57.87 76.99 40.00 54.08 75.53 Provider-based overhead costs3 6.47 15.03 27.62 15.51 24.55 31.91 11.93 18.81 27.81
Total cost per visit 42.47$ 55.41$ 72.81$ 42.55$ 63.36$ 89.93$ 41.12$ 56.21$ 79.09$ Overall agency cost per visit (all disciplines) 104.98$ 128.14$ 156.84$ 114.14$ 139.84$ 169.21$ 100.76$ 129.75$ 165.77$ Medical Supplies
Non-routine medical supplies 1.32$ 2.62$ 4.12$ 1.35$ 2.64$ 4.54$ 0.95$ 2.20$ 4.08$ Medicare Episode PaymentsEstimated average case-mix weight2 1.2549 1.4185 1.6127 1.1944 1.3103 1.4828 1.1531 1.3151 1.5306 Average payment ratio2 1.1321 1.2866 1.4847 1.0542 1.1644 1.3390 1.0721 1.2283 1.4354 Medicare episode mix by payment type
Unadjusted episodes 83.7% 87.2% 90.7% 82.5% 85.8% 90.2% 83.1% 87.8% 92.2%LUPA episodes 5.1% 9.4% 12.0% 7.6% 10.9% 14.1% 3.3% 6.8% 11.4%PEP episodes 1.3% 2.1% 3.0% 1.3% 2.1% 2.7% 1.0% 1.9% 3.2%Outlier episodes 0.2% 0.5% 2.3% 0.0% 0.4% 1.5% 0.0% 0.8% 3.7%
Average payment per episode by payment typeUnadjusted episodes 2,907.69$ 3,366.06$ 3,603.66$ 2,443.05$ 2,750.43$ 3,126.30$ 2,552.62$ 3,004.20$ 3,495.32$ LUPA episodes 299.70 334.17 384.22 290.65 314.00 343.16 290.11 326.47 369.73 PEP episodes 996.77 1,269.89 1,511.62 795.74 1,099.81 1,341.54 953.42 1,221.09 1,555.94 Outlier episodes 3,135.44 3,790.00 5,539.93 2,506.95 2,972.00 3,530.50 2,997.50 3,887.67 5,761.07
Health Care Group | www.bkd.com Questions? Contact Mark Sharp at [email protected].
5 of 7
4/23/2012
2010 Medicare Home Health Operations Dashboard ReportPeer Group Data1 State Data1 National Data1
All Missouri All United StatesMedicare Certified Medicare Certified
Measure Agencies Agencies
Lower Upper Lower Upper Lower UpperQuartile Median Quartile Quartile Median Quartile Quartile Median Quartile
2010 SHP Benchmark Leaders
Operating Dashboards (Continued)Medicare Episode ProfitabilityAverage payment per episode 2,629$ 3,018$ 3,383$ 2,172$ 2,462$ 2,858$ 2,363$ 2,797$ 3,288$ Direct costs per episode
Salaries4 614 797 1,061 619 762 973 530 749 1,009 Employee benefits4 94 127 175 87 141 239 50 102 169 Contract services4 46 144 287 31 137 352 54 222 477
Total labor 984 1,189 1,363 921 1,148 1,383 891 1,144 1,436 Transportation 24 55 75 5 71 106 - 19 70 Other direct costs - - 1 - - - - - - Nonroutine supplies - 17 35 - 7 30 - 8 28
Total direct care costs per episode 1,054 1,277 1,468 1,020 1,245 1,531 1,014 1,256 1,547 Direct profit (loss) per episode 1,329 1,676 2,053 839 1,175 1,566 1,116 1,513 1,913 Direct profit (loss) margin per episode 50.8% 58.1% 63.7% 36.3% 48.3% 59.9% 45.4% 55.6% 63.1%Indirect agency costs per episode 548 838 1,243 418 676 1,048 684 1,037 1,589
Total agency cost per episode 1,873 2,237 2,553 1,657 2,002 2,398 1,857 2,325 2,941 488 809 1,002 122 509 805 45 454 825
17.9% 25.5% 32.9% 5.1% 19.8% 32.1% 1.6% 16.9% 29.3%Provider-based overhead costs per episode3 358 635 833 489 721 923 473 662 890 Total costs per episode 2,023 2,309 2,613 1,895 2,246 2,650 1,970 2,418 3,013
Overall profit (loss) per episode 352 681 995 (218) 298 644 (64) 373 765 Profit (loss) margin per episode 14.1% 22.8% 31.7% -9.3% 9.9% 24.9% -2.4% 13.6% 26.8%
Health Care Group | www.bkd.com Questions? Contact Mark Sharp at [email protected].
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Profit (loss) per episode based on total agency costsProfit (loss) margin per episode based on total agency costs
4/23/2012
2010 Medicare Home Health Operations Dashboard ReportPeer Group Data1 State Data1 National Data1
All Missouri All United StatesMedicare Certified Medicare Certified
Measure Agencies Agencies
Lower Upper Lower Upper Lower UpperQuartile Median Quartile Quartile Median Quartile Quartile Median Quartile
2010 SHP Benchmark Leaders
Operating Dashboards (Continued)Gross profit (loss) margin4 39.0% 52.0% 60.0% 29.5% 41.0% 53.8% 39.0% 52.0% 61.0%Agency profit (loss) margin4 3.9% 9.4% 16.6% -1.5% 4.4% 11.3% -1.4% 4.8% 13.6%Salaries as a % of total costs4 53.1% 59.9% 66.2% 51.7% 57.2% 64.8% 47.7% 57.3% 65.2%Salaries as a % of total revenue4 43.7% 53.2% 60.8% 47.6% 55.0% 65.3% 42.6% 53.1% 63.3%Employee benefits as a % of total salaries4 14.5% 17.2% 20.2% 14.2% 18.6% 26.2% 11.1% 15.3% 20.0%
62.4% 69.2% 77.9% 63.1% 70.9% 78.3% 54.8% 66.5% 75.5%51.5% 62.0% 72.1% 56.6% 65.6% 79.8% 45.9% 59.7% 71.9%2.8% 7.7% 12.5% 1.8% 4.9% 9.9% 3.1% 9.9% 20.5%2.1% 6.0% 11.7% 1.9% 5.5% 10.9% 3.0% 9.7% 19.9%
74.7% 81.1% 85.6% 74.5% 82.7% 87.4% 72.4% 80.0% 85.8%62.1% 71.7% 76.4% 64.8% 73.3% 83.5% 62.6% 73.1% 82.7%40.8% 51.7% 59.2% 44.2% 51.6% 60.1% 39.4% 50.5% 62.7%35.1% 42.6% 54.3% 40.2% 49.3% 61.5% 36.3% 46.2% 60.3%21.0% 27.2% 33.9% 14.9% 22.1% 29.1% 19.5% 27.6% 38.6%16.4% 21.9% 32.1% 15.7% 21.6% 30.0% 17.1% 26.2% 38.7%2.0% 2.9% 3.8% 2.1% 4.0% 5.5% 0.0% 1.9% 3.8%0.7% 2.3% 3.2% 1.7% 2.9% 4.4% 0.0% 1.5% 3.2%
12.5% 16.9% 22.9% 7.1% 13.6% 22.9% 11.9% 17.9% 26.0%10.5% 15.3% 20.8% 11.9% 17.4% 25.8% 12.4% 18.2% 26.3%30.0% 37.3% 48.4% 25.2% 31.5% 40.0% 30.0% 39.5% 48.8%24.8% 32.1% 42.5% 27.7% 31.9% 40.4% 28.3% 38.4% 48.2%
Capital & plant costs as a % of total cost4 2.5% 3.2% 4.0% 2.4% 3.4% 5.3% 2.1% 3.3% 5.0%Capital & plant costs as a % of total revenue4 1.8% 2.8% 3.6% 2.1% 3.3% 5.5% 1.9% 3.1% 4.8%Days in accounts receivable4 37.9 49.1 76.6 43.2 66.4 97.2 36.4 51.3 75.0 Current ratio4 1.7 3.0 5.9 0.9 2.0 5.8 1.0 1.9 4.7 Quick ratio4 1.3 2.3 3.3 0.8 1.6 3.2 0.9 1.6 3.7 Return on equity4 2.1% 14.5% 56.0% 0.1% 12.2% 44.7% -1.9% 20.0% 87.2%Return on assets4 1.8% 13.3% 42.2% -1.4% 8.9% 25.7% -2.7% 11.5% 55.4%
1Data compiled using all Medicare cost reports available from CMS with fiscal years ending in 2010.2Estimated based on payment rates effective for the location of the agency rather than service area.3Dashboard indicator only applies to hospital-based agencies, and accounts for costs allocated to the agency from the provider.4Dashboard indicator only includes freestanding agencies as hospital-based agency data is not available from CMS data sets.5Estimated based on 230 work days per year.
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Total salaries & employee benefits as a % of total costs4
Administrative & general costs as a % of total revenue4
Purchased services as a % of total revenue4
Transportation as a % of total revenue4
Administrative & general costs as a % of total cost
Other costs as a % of total costs
Total labor as a % of total revenue4Total labor as a % of total costs
Purchased services as a % of total costs4
Other costs as a % of total revenue4
Transportation as a % of total costs
Total salaries & employee benefits as a % of total revenue4
Direct labor as a % of total costs4
Direct labor as a % of total revenue4
Indirect labor as a % of total costs4
Indirect labor as a % of total revenue4