Direct Labor NPR - Multi-Pedia

Direct Labor % of Net Revenue = Total Direct Labor / Net Patient Revenue

This is one of the three major categories of cost in Hospice.

Direct Labor - Labor expense that is directly involved with the provision of care such as RNs, LPNs, CNAs, SWs, Chaplains and visiting Physicians. It does NOT include supervisors or managers even if they perform occasional visits. Bereavement, Volunteer, Triage, Admissions and On-Call areas are also considered Direct Labor. The staff of these areas provides direct care. All other labor costs are considered Indirect Labor.

Hospice Homecare:

Cost Category Average Acceptable Excellent
Total Direct Labor 42% 38% 33%

IP Unit:

Cost Category Average Acceptable
Total Direct Labor (includes all unit staff) 74% 59%

MVI encourages the use of Percentages of Net Patient Revenue (NPR %) rather than Patient-Day costs for Hospice financial measurement. This deviates from traditional Hospice practice.

For more detail on what Percentages of Net Patient Revenue is, and why/how a Hospice should use it rather than Patient-Day costs, click here.

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