CAHMPAS Financial Indicators for Our Hospital

1. CAHMPAS Financial Indicators forOur Hospital CAHMPAS Team North Carolina Rural Health Research and Policy Analysis Center Cecil G. Sheps Center for Health Services Research 725 Martin Luther King, Jr. Boulevard Chapel Hill, NC 27514 CAH.finance@schsr.unc.edu April 3, 2018

2. Profitability: Total Margin Net income Total revenue Definition Interpretation Measures the control of expenses relative to revenues

3. Profitability: Cash Flow Margin Net income – (Contributions, investments, and appropriations + Depreciation expense + Interest expense) Net patient revenue + Other income – Contributions, investments, and appropriations Definition Measures the ability to generate cash flow from providing patient care services Interpretation

4. Profitability: Return on Equity Definition Net income Net assets Measures the net income generated by equity investment (net assets) Interpretation

5. Profitability: Operating Margin Net patient revenue + Other revenue – Total operating expenses Net patient revenue + other revenue Definition Measures the control of operating expenses relative to operating revenues Interpretation

6. Liquidity: Current Ratio Current assets Current liabilities Definition Interpretation Measures the number of times short-term obligations can be paid using short-term assets

7. Liquidity: Days Cash on Hand Cash + temporary investments + investments (Total expenses – Depreciation) / Days in period Definition Measures the number of days an organization could operate if no cash was collected or received Interpretation

8. Liquidity:Days in Net Accounts Receivable Net patient accounts receivable (Net patient revenue) / Days in period Definition Measures the number of days that it takes an organization to collect its receivables Interpretation

9. Liquidity:Days in Gross Accounts Receivable Gross patient accounts receivable (Gross patient revenue) / Days in period Definition Measures revenue cycle performance (in comparison with days in net A/R. Interpretation

10. Capital Structure: Equity Financing Net assets Total assets Definition Measures the percentage of total assets financed by equity Interpretation

11. Capital Structure:Debt Service Coverage Definition Net income + Depreciation Expense + Interest expense Notes and loans payable (short term) * (365/DIP) + Interest expensewhere DIP means days in period Measures the ability to pay obligations related to long-term debt, principal payments and interest expense Interpretation

12. Capital Structure:Long-Term Debt to Capitalization Long-term debt Long-term debt + Net assets Definition Interpretation Measures the percentage of total capital that is debt

13. Revenue: Outpatient Revenues to Total Revenues Total outpatient revenue Total patient revenue Definition Measures the percentage of total revenues that are for outpatient revenues (including, for example, Rural Health Clinics, free-standing clinics, and home health clinics Interpretation

14. Revenue: Patient Deductions Contractual allowances + Discounts Gross total patient revenue Definition Interpretation Measures the allowances and discounts per dollar of total patient revenue

15. Revenue: Medicare Inpatient Payer Mix Medicare inpatient days Total inpatient days – Nursery bed days – NF Swing bed days Definition Measures the percentage of total inpatient days that are provided to Medicare patients Interpretation

16. Revenue: Hospital Medicare Outpatient Payer Mix Definition Hospital Outpatient Medicare charges Hospital total outpatient charges Measures the percentage of total outpatient charges that are for Medicare patients Interpretation

17. Revenue: Hospital Medicare Outpatient Cost to Charge Hospital Medicare Outpatient Costs Hospital Medicare Outpatient Charges Definition Measures outpatient Medicare costs per dollar of outpatient Medicare charges Interpretation

18. Revenue: Medicare Acute InpatientCost per Day Medicare acute inpatient cost (Medicare Inpatient Days (excl. HMO)) Definition Measures the average daily cost of a Medicare acute inpatient Interpretation

19. Cost: Salaries to Net Patient Revenue Salary expense Net patient revenue Definition Measures the percentage of net patient revenue that are labor costs Interpretation

20. Cost: Average Age of Plant Definition Accumulated depreciation Depreciation expense * (365 / Days in Period) Measures the average age in years of the fixed assets of an organization Interpretation

21. Cost: FTEs per Adjusted Occupied Bed Number of FTEs Adjusted occupied beds** Definition Interpretation Measures the number of full-time employees per each occupied bed ** (Inpatient days – NF Swing days – Nursery days) * (Total patient revenue / (Total inpatient revenue – Inpatient NF revenue – Other LTC Revenue)) / Days in period

22. Cost: Average Salary per FTE Salary Expense Number of FTEs Definition Measures the price and mix of labor. Interpretation

23. Utilization: Average Daily Census Swing-SNF Beds Inpatient swing bed SNF days Days in period Definition Interpretation Measures the average number of swing-SNF beds occupied per day

24. Utilization:Average Daily Census Acute Beds Inpatient acute care bed days Days in period Definition Interpretation Measures the average number of acute care beds occupied per day

25. Summary of Results for Our Hospital