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Comparative Expenses

Account 12-Month Current Year

% 12-Month Prior Year

% Annual Increase (Decrease)

% of Change

Social Security 60,517 4.97 68,177 5.70 (7,660) –12.66

Pension 20,675 1.70 23,473 1.96 (2,798) –13.53

Health Insurance 8,422 0.69 18,507 1.55 (10,085) –119.75

14.3 ANALYZING OPERATING DATA Comparative analysis is an important tool for managers, and it is worth investing the time to become familiar with both horizontal and vertical analysis. Managers will generally analyze their own organization’s data most of the time (rather than performing comparisons against other organizations). With that fact in mind, we examine operating room operating data (no pun intended) that incorporate both common sizing and trend analysis.

Table 14–5 (http://content.thuzelearning.com/books/Baker.6866.18.1/sections/ch14_sect1_3#ch14_tbl5) sets out 32 expense items. The expense amount in dollars for each line item is set out for the current year in the left column (beginning with $60,517). The expense amount in dollars for each line item is set out for the prior year in the third column of the analysis (beginning with $68,177). The difference in dollars, labeled “Annual Increase (Decrease),” appears in the sixth column of the analysis (beginning with [$7,660]). Vertical analysis has been performed for the current year, and the percentage results appear in the second column (beginning with 4.97%). Vertical analysis has also been performed for the prior year, and those percentage results appear in the fourth column (beginning with 5.70%). Horizontal analysis has been performed on each line item, and those percentage items appear in the far right column (beginning with 12.66%). This table is a good example of the type of operating data reports that managers receive for planning and control purposes.

Table 14–5 Vertical and Horizontal Analysis for the Operating Room

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Child Care 4,564 0.37 4,334 0.36 230 5.04

Patient Accounting

155,356 12.76 123,254 10.30 32,102 20.66

Admitting 110,254 9.05 101,040 8.45 9,214 8.36

Medical Records 91,718 7.53 94,304 7.88 (2,586) –2.82

Dietary 27,526 2.26 35,646 2.98 (8,120) –29.50

Medical Waste 2,377 0.20 3,187 0.27 (810) –34.08

Sterile Procedures 78,720 6.46 70,725 5.91 7,995 10.16

Laundry 40,693 3.34 40,463 3.38 230 0.57

Depreciation— Equipment

87,378 7.18 61,144 5.11 26,234 30.02

Depreciation— Building

41,377 3.40 45,450 3.80 (4,073) –9.84

Amortization— Interest

(5,819) –0.48 1,767 0.15 (7,586) 130.37

Insurance 4,216 0.35 7,836 0.65 (3,620) –85.86

Administration 57,966 4.76 56,309 4.71 1,657 2.86

Medical Staff 1,722 0.14 5,130 0.43 (3,408) – 197.91

Community Relations

49,813 4.09 40,618 3.39 9,195 18.46

Materials Management

64,573 5.30 72,305 6.04 (7,732) –11.97

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Human Resources 31,066 2.55 13,276 1.11 17,790 57.27

Nursing Administration

82,471 6.77 92,666 7.75 (10,195) –12.36

Data Processing 17,815 1.46 16,119 1.35 1,696 9.52

Fiscal 17,700 1.45 16,748 1.40 952 5.38

Telephone 2,839 0.23 2,569 0.21 270 9.51

Utilities 26,406 2.17 38,689 3.23 (12,283) –46.52

Plant 77,597 6.37 84,128 7.03 (6,531) –8.42

Environmental Services

32,874 2.70 37,354 3.12 (4,480) –13.63

Safety 2,016 0.17 2,179 0.18 (163) –8.09

Quality Management

10,016 0.82 8,146 0.68 1,870 18.67

Medical Staff 9,444 0.78 9,391 0.78 53 0.56

Continuous Quality Improvement

4,895 0.40 0 0.00 4,895 100.00

EE Health 569 0.05 1,513 0.13 (944) – 165.91

Total Allocated 1,217,756 100.00 1,196,447 100.00 21,309 1.75

All Other Expenses

1,211,608 — — — — —

Total Expense 2,429,364 — — — — —

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Comparative analysis is especially important to managers because it creates a common ground to make judgments for planning, control, and decision-making purposes. Using comparative data is the subject of the following chapter.

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