Analyze the key performance indicators (KPIs) provided and determine which indicators are out of alignment with the dashboard tool. Explain the following:

1. The identified KPIs that are out of alignment.
2. The analysis conducted to identify which KPIs are out of alignment.
3. Your corrective action plan to align each of the KPIs.
4. Choose one of the following project ideas and explain how the information provided in the dashboard tool will help to advance progress on the project: (a) a new pediatric wing, (b) a new outpatient surgical center, or (c) increasing in-house education to credentialed staff.

TABLE 11-1 Dashboard for Harris Memorial Hospital
Data Element	Data Source	Formula	Harris Memorial Hospital	Eastside Medical Center	U.S. Median
Overview
Return on equity	Audit	Excess of revenue over expenses/Net assets	9.0	13.8	8.5
Financial strength index	Audit	[Total margin 4%/4%] + [Days cash on hand 120/120] + [50% Debt financing%/50%] + [9 Average age of plant/9]	1.7	2.4	0.3
Total margin	Audit	Excess of revenues over expenses/Operating revenue + Nonoperating gains	7.5	8.3	5.0
Market factors
Inpatient revenue %	Public	Gross IP revenue/Gross patient revenue	30.5	61.9	46.2
Surgical cases %	Public	Medicare surgical discharges/Medicare total discharges	35.6	38.3	23.7
Market share %	Public	Net patient revenue/Sum of net patient revenue in county	65.5	34.5	57.4
Medicaid days %**	Public	Medicaid patient-days/Total patient-days	23.2	12.4	19.4
Medicare days %**	Public	Medicare patient-days/Total patient-days	42.3	59.7	54.1
Revenue growth (last year) %	Audit	(Operating revenue current year Operating revenue prior year)/Operating revenue prior year	7.3	10.5	5.4
Pricing
Average charge per Medicare discharge (CMI = 1.0)*	Public	All Medicare inpatient charges/(Number of discharges CMI)	25,052	27,506	22,506
Average charge per visit (RW = 1.0)*	Public	Average Medicare visit charge/Average relative weight	307	410	353
Routine room rate*	Public	Average charge for routine care	640	1,667	1,372
Chest x-ray (71020)*	Public	Average charge for chest x-ray	291	385	301
Coding factors
Change in Medicare CMI %	Public	Percentage change in Medicare case-mix index (2 years)	1.9	3.4	2.1
Medicare CMI	Public	Measure of the costliness of cases treated by a hospital relative to the national average of all Medicare hospital cases, using DRG weights as a measure of relative costliness of cases	1.7644	1.7439	1.5243
CC/MCC capture rate	Public	The number of Medicare cases in MS-DRGs with a CC or MCC designation divided by the total Medicare cases	67.0	68.0	60.0
Average relative weight per outpatient visit (SMI)	Public	Based on weights for all CPT/HCPCS codes	4.6	7.7	9.2
Injectable drug without administration %	Public	Claim chosen if pharmaceutical item requiring injection or infusion present without the administration procedure	24.1	8.1	10.0
Contract negotiation
Nongovernment payers %	Public	Percent of revenue from sources other than Medicare or Medicaid	34.4	27.9	23.9
Markup (charges/cost)	Public	(Gross patient revenue + Other operating revenue)/Total operating expenses	2.8	3.8	3.3
Deduction %	Public	Contractual allowances/Gross patient revenue	72.6	67.5	69.9
Net patient revenue per equivalent discharge*	Public	Net patient revenue/Equivalent discharges	6,683	8,701	7,798
Cost position
Hospital cost index	Public	[(Average cost per Medicare discharge/U.S. median) IP revenue%] + [(Average cost per visit/U.S. median) Average OP revenue %]	99.5	107.2	101.2
Average cost per Medicare discharge (CMI = 1.0)*	Public	Medicare inpatient costs/(Medicare discharges average CMI)	7,345	7,084	6,858
Average cost per visit (RW = 1.0)*	Public	Average Medicare visit costs/Average relative weight	76	92	79
Labor costs
Net patient revenue per FTE*	Public	Net patient revenue/FTEs	179,127	141,281	172,373
Man-hours per equivalent discharge	Public	Paid hours/Equivalent discharges	68.3	105.5	102.0
Salary per FTE*	Public	Salaries/FTEs	75,171	69,181	60,809
Departmental cost
Direct cost per routine day*	Public	Direct routine costs/Routine patient-days	411	509	451
Direct cost per ICU/CCU day*	Public	Direct ICU and CCU Costs/ICU and CCU patient-days	788	862	881
Overhead cost %	Public	Overhead expenses/Total expenses	37	34	34
Capital costs per equivalent discharge*	Public	Capital-related costs/Equivalent discharges	768	469	572
Supply and drug costs
MS-DRG 247 supply cost	Public	Perc cardiovasc proc w drug-eluting stent w/o MCC	2,895	4,764	3,839
MS-DRG 470 supply cost	Public	Major joint replacement or reattachment of lower extremity w/o MCC	4,668	6,346	5,667
MS-DRG 194 pharmacy cost	Public	Simple pneumonia & pleurisy w CC	1,166	585	787
MS-DRG 603 pharmacy cost	Public	Cellulitis w/o MCC	1,337	852	820
Service intensity
Medicare LOS (CMI = 1.0)	Public	Medicare inpatient-days/(Medicare discharges CMI)	2.7	2.5	3.0
Ancillary cost per Medicare discharge (CMI = 1.0)*	Public	Medicare ancillary costs/(Medicare discharges CMI)	5,360	3,906	3,635
Nonoperating income
Days cash on hand	Audit	(Cash and cash equivalents + Long-term investments)/[(Total expenses Depreciation)/365]	236	220	33
Investment income/investment%	Audit	Investment income/Total investments	5.9	0.0	0.7
Portfolio in equities %	Audit	Equity investments/Total investments	58.7	N/A	50.0
Investment efficiency
Days in accounts receivable	Audit	Net accounts receivable/(Net patient revenue/365)	30.8	72.0	53.0
Inventory/Net patient revenue %	Audit	Inventory/Net patient revenue	0.9	2.9	2.0
Revenue/Net fixed assets	Audit	Operating revenue/Net fixed assets	1.4	2.9	2.5
Plant obsolescence
Average age of plant	Audit	Accumulated depreciation/Depreciation expense	11.1	8.2	11.1
Two-year change in net fixed assets	Audit	[Net fixed assets Net fixed assets (2 yr prior)]/Net fixed assets (2 yr prior)	37.2	44.6	2.4
Capital position
Long-term debt/Equity %	Audit	Long-term debt/Net assets	72.1	37.8	15.0
Average cost of equity %	Public	Risk-free rate on U.S. government obligations + Estimated beta of firm Market risk premium	9.1	7.8	5.7
Debt financing %	Audit	(Total assets Net asets)/Total assets	47.5	31.6	42.1
Cash flow to total debt %	Audit	(Net income + Depreciation)/Total liability	17.1	29.6	10.5
Debt service coverage	Audit	(Net income + Depreciation + Interest)/(Principal payment + Interest)	6.9	N/A	N/A