Care New England Women & Infants Efficiency & Effectiveness Metrics 1

BALANCED SCORECARD FY 2013 METRICS 2

System Strength Metrics Efficiency & Effectiveness – Actively Managing Total Cost Cost per Adjusted Discharge: Formula:Total Operating Expense (less Research Expenses) divided by Adjusted Discharges Desired Direction - equal to or less than budget Data Required: Inpatient Gross Revenue (Financial Reporting System) Outpatient Gross Revenue (Financial Reporting System) # of Inpatient Discharges –NICU, Adult & Newborns (monthly key stats) Total Operating Expense (Financial Reporting System) 3

System Strength Metrics Efficiency & Effectiveness – Actively Managing Total Cost Calculation for Cost per Adjusted Discharge (cont’d): # of Adjusted Discharges: Inpatient Revenue # of inpatient discharges (NICU, Adult, Newborn) = I/P Rev. per Discharge $521,845,340 20,260 = $25,757 Outpatient Revenue / I/P Revenue per discharge = # of O/P “patient discharges” $356,794,239 $25,757 = 13,852 # of I/P Patient discharges + # of O/P “patient discharges” = Adjusted Patient Discharges 20,26013,852 = 34,112 Total Operating Expense from Financial Reporting System = $423,945,704 Metric calculation: Total Operating Expense / Adjusted Discharges = Cost per Adjusted Discharge $423,945,704 34,112 $12,428 4

What Impacts Cost per Adjusted Discharge I/P and O/P Revenue / Activity (Volume) Total Operating Expenses which includes: Salaries & Wages Fringe Benefit Costs All non-salary operating costs such as: Purchased ServicesTravel & Education costs Non-Medical SuppliesInsurance Medical SuppliesDepreciation Maintenance & RepairUtility Costs Marketing CostPhysician Practice costs 5

What Impacts Cost per Adjusted Discharge The Positives / Negatives Activity increases while cost at budget or decreasesPOSITIVE Activity decreases while cost at budget or increasesNEGATIVE Management can positively impact metric by Keep staffing or hours paid at budget when activity increases Reduce overtime Reduce staffing or hours paid when activity decreases Monitor and vigorously manage controllable expenses at or below budget Purchased ServicesTravel & Education costs Non-Medical SuppliesMedical Supplies Maintenance & RepairUtility Costs Marketing CostPhysician Practice costs 6

System Strength Metrics Efficiency & Effectiveness – Actively Manage Labor Expenses FTE’s per Adjusted Occupied Bed: Formula: # of FTE’s divided by Adjusted Occupied Bed Desired Direction - equal to or less than budget Data Required: Inpatient Gross Revenue (Financial Reporting System) Outpatient Gross Revenue (Financial Reporting System) # of Inpatient Days –NICU, Adult & Newborns (monthly key stats) # of Days in Reporting period (Month & YTD) FTE’s data taken from monthly FTE report adjusted to exclude Research Funded FTE’s 7

System Strength Metrics Efficiency & Effectiveness – Actively Manage Labor Expenses Calculation for FTE’s per Adjusted Occupied Bed (cont’d): # of Adjusted Patient Days: Inpatient Revenue / # of inpatient days ( NICU, Adult, Newborn) = I/P Revenue per day Outpatient Revenue / I/P Revenue per day = # of O/P “patient days” # of I/P Patient days + # of O/P “patient days” = Adjusted Patient days (134,418) # Days in Reporting Period ending September 30 th = 366 days (leap year!) Adj. occupied bed = # of Adjusted patient days / # of days in reporting period = # of occup. beds 134, Metric calculation: # of FTES / Adjusted Occupied Bed = FTE’s per Adjusted Occupied Bed 2,

What Impacts FTE’s per Adjusted Occupied Bed Revenue / Activity (Volume) # of FTE’s which is impacted by # of hours paid. Hours paid is comprised of Regular, Overtime & benefit time hours THE Positives / Negatives; Impact Activity AND # of FTE’s at Budget NETURAL Activity increases while # of FTE’s increaseNETURAL Activity decreases while # of FTE’s decreasesNETURAL Activity increases while # of FTE’s constantor decreasesPOSITIVE Activity decreases while # of FTE’s constant or increasesNEGATIVE Management can positively impact metric by: Keep staffing or hours paid at budget when activity increases Reduce staffing or hours paid when activity decreases 9

System Strength Metrics Efficiency & Effectiveness – Actively Manage Labor Expenses Total Cost per FTE: (includes Research) Formula: Salaries & Fringe Benefits paid divided by # of FTE’s Desired Direction - equal to or less than budget Data Required: FTE’s data taken from monthly FTE report adjusted to include Research Funded FTE’s Total Salaries paid (excluding outside manpower) Fringe Benefit cost Metric calculation: Total Salaries + Fringe Benefit / # of FTE’s = Total Cost per FTE $194,532,455 $64,070,624 2,227 $116,122 10

What Impacts Total Cost per FTE Total Salaries & Wages Paid Salaries & wages paid; comprised of Regular, Overtime, shift differentials, non-productive, and incentive dollars paid. Fringe Benefit Costs: Payroll Taxes, Health Insurance coverage (net of ‘ee contributions), employer Pension contribution, unemployment costs, tuition/educational assistance. Number of FTE’s THE Positives / Negatives: Salaries & Wages, Benefit Costs and # of FTE’s at budgetNETURAL Salaries & Wages, Benefit Costs decline and # of FTE’s at budget or decreasesPOSITIVE Management can positively impact metric by: Reduce staffing or hours paid when activity decreases Reduce and/or eliminate Overtime paid 11

Strength Metrics Efficiency & Effectiveness – Actively Manage Labor Expenses Paid Hours variance from benchmarks (FTE’s): Formula:Hours Paid divided by scheduled/budgeted hours (annually, weekly) Desired Direction - equal to or less than budget and compared to benchmark (AMS) Data Required: Total Hours paid (Payroll System reports - EV) Total Schedule/Budgeted Hours (Kreg Budget reports – EV) 12

What Impacts Paid Hours Variance to Benchmarks (FTE’s) Paid hours (comprised or Regular, overtime and non-productive time) related to: Volume/Activity Staffing patterns Coverage for holidays, vacation, sick time, LOA’s The Positives / negatives; Activity increases and staffing (paid hours) at budget or belowPOSITIVE Activity decreases and staffing (paid hours) reducedPOSITIVE Activity increases and staffing increases non proportionatelyNEGATIVE Activity at or below budget and staffing remains same or increasesNEGATIVE Use of overtime in lieu of straight timeNEAGTIVE 13

Strength Metrics Efficiency & Effectiveness – Actively Manage Labor Expenses Overtime as a percent of Total Salaries Formula: Overtime paid divided by total salaries & wages Desired Direction - Target 4% Data Required: Total Overtime Paid (EV - Weekly Total Hospital Payroll Variance Reports - Dollars: Actual vs. Budget ) Weekly Total Hospital Payroll Variance Reports - Dollars: Actual vs. Budget Total Salaries paid (Payroll System Summary) Metric Calculation: Total overtime / Total Salaries & Wages = Percent $12,004,330 $194,081,472 = 4.9% 14

What Impacts Overtime as a Percentage to Total Salaries Volume Holidays, Vacations, Sick time Backfilling LOA’s Management can positively impact metric by: Monitor, manage staffing patterns Better manage vacation schedules especially during holiday time Manage and accountability in implementing contract language 15

NON BALANCED SCORECARD METRICS MONITORED MONTHLY 16

System Strength Metrics Efficiency & Effectiveness – Actively Manage Labor Expense Salary per FTE: Formula: Salaries & Wages divided by # of FTE’s Desired Direction - equal to or less than budget Data Required: FTE’s data taken from monthly FTE report adjusted to include Research Funded FTE’s Total Salaries paid (excluding outside manpower) Financial Reporting System Metric Calculation: Total Salaries / # of FTE’s = Total Cost per FTE $194,532,455 2,227 $87,351 17

What Impacts Salary per FTE Total Salaries & Wages Paid Salaries & wages paid; comprised of Regular, Overtime, shift differentials, non-productive, and incentive dollars paid. Number of FTE’s THE Positives / Negatives: Salaries & Wages and # of FTE’s at budgetNETURAL Salaries & Wages decline and # of FTE’s at budget or decreasesPOSITIVE Management can positively impact metric by: Reduce staffing or hours paid when activity decreases Reduce and/or eliminate Overtime paid 18

System Strength Metrics Efficiency & Effectiveness – Actively Managing Total Cost Cost per Adjusted Patient Day: Formula:Total Operating Expense (less Research Expenses) divided by Adjusted Patient Days Desired Direction - equal to or less than budget Data Required: Inpatient Gross Revenue (Financial Reporting System) Outpatient Gross Revenue (Financial Reporting System) # of Inpatient Patient Day –NICU, Adult & Newborns (monthly key stats) Total Operating Expense (Financial Reporting System) 19

System Strength Metrics Efficiency & Effectiveness – Actively Managing Total Cost Calculation for Cost per Adjusted Patient Day (cont’d): # of Adjusted Patient Days: Inpatient Revenue # of inpatient patient days (NICU, Adult, Newborn) = I/P Rev. per Pt Day $521,845,340 79,834 = $6,537 Outpatient Revenue / I/P Revenue per Pt day = # of O/P “patient days” $356,794,239 $6,537 = 54,581 # of I/P Patient days + # of O/P “patient days” = Adjusted Patient Days 79,834 54,581 = 134,415 Total Operating Expense from Financial Reporting System = $423,945,704 Metric calculation: Total Operating Expense / Adjusted Patient Days = Cost per Adjusted Patient Day $423,945, ,415 $3,154 20

What Impacts Cost per Adjusted Patient Day I/P and O/P Revenue / Activity (Volume) Total Operating Expenses which includes: Salaries & Wages Fringe Benefit Costs All non-salary operating costs such as: Purchased ServicesTravel & Education costs Non-Medical SuppliesInsurance Medical SuppliesDepreciation Maintenance & RepairUtility Costs Marketing CostPhysician Practice costs 21

What Impacts Cost per Adjusted Patient Day The Positives / Negatives Activity increases while cost at budget or decreasesPOSITIVE Activity decreases while cost at budget or increasesNEGATIVE Management can positively impact metric by Keep staffing or hours paid at budget when activity increases Reduce overtime Reduce staffing or hours paid when activity decreases Monitor and vigorously manage controllable expenses at or below budget Purchased ServicesTravel & Education costs Non-Medical SuppliesMedical Supplies Maintenance & RepairUtility Costs Marketing CostPhysician Practice costs 22

System Strength Metrics Efficiency & Effectiveness – Actively Manage Labor Expenses Paid Hours per Adjusted Discharge Formula:Total Paid Hours (less Research funded hours) divided by Adjusted Discharges Desired Direction - equal to or less than budget Data Required: Inpatient Gross Revenue (Financial Reporting System) Outpatient Gross Revenue (Financial Reporting System) # of Inpatient Patient Discharges –NICU, Adult & Newborns (monthly key stats) Total Paid Hours comprised of Regular & Overtime hours and non-productive hours such as vacation, sick, PTO, Educational, Paid LOA’s. (Financial Reporting System – Payroll Reports) Metric calculation: Total Paid Hours / Adjusted Discharges = Paid Hours per Adjusted Discharge 4,297,245 34,

What Impacts Paid Hours per Adjusted Discharge I/P and O/P Revenue / Activity (Volume) Total Paid Hours which includes: RegularPTOBanked Holiday/Vacation time OvertimeEducationalVacation Paid LOA’sSickExtended Illness Personal Time The Positives / Negatives Activity increases while Paid Hours at budget or decreasesPOSITIVE Activity decreases while Paid Hours at budget or increasesNEGATIVE Management can positively impact metric by: Maintain paid hours at budget or below when activity increases Reduce overtime hours Reduce paid hours when activity decreases Manage paid hours by not back filling for vacations, holidays & sick hours 24

Strength Metrics Efficiency & Effectiveness – Actively Manage Labor Expenses Other Paid / Worked hour metrics: Paid Hours per adjusted patient day (Calculated same as Paid Hours per Adjusted Discharge except substitute Adjusted Patient Days for discharges Worked Hours per Adjusted Discharge & Worked Hours Per Patient Day (Comprised of Regular and Overtime hours WORKED only. 25