Chapter 09

Chapter 9.
Productivity
Chapter 9: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
Outline
Trends in Healthcare Productivity: Consequences of PPS

Productivity Definitions and Measurements
Productivity Benchmarking
Multifactor Productivity
Commonly Used Productivity Ratios
Hours per Patient Day or Visit
Adjustment for Inputs
Skill-Mix Adjustment to Worked Hours
Cost of Labor
Adjustments for Output Measures
Service/Case-Mix Adjustments
Productivity Measures Using Direct Care Hours
Productivity Quality Relationship
Productivity Dilemmas
Multiple Dimensions of Productivity: New Methods
Data Envelopment Analysis (DEA)
Productivity Improvement
Management
Yasar A. Ozcan
Trends in Productivity: Consequences of PPS
The recent decades changes in reimbursement

strategies aimed to end waste and promote
innovative and cost-efficient delivery systems.
productivity gains from PPS have not materialized

to the extent predicted.
Hospitals now employ more people to treat fewer

patients, and the increase is not accounted for by
the greater severity of patient illness in the late
1980s and in1990s.
Although employers, insurers and public are

spending less on inpatient care, the rising use of
outpatient procedures has simply increased costs
in that area which counters the savings (Altman,
Goldberger, and Crane, 1990).
Management
Yasar A. Ozcan
Trends in Productivity: Consequences of PPS
The constraints that force healthcare institutions

into the role of cost centers, coupled with shifting
patterns of inpatient acuity, tight healthcare labor
markets, and society's expectations of high quality
of care are leading healthcare organizations to a
"productivity wall." When the wall is reached, it
is quality of care that inevitably is sacrificed for
the sake of productivity and profit (Kirk, 1990).
It must be recognized that there are limits to

ratcheting up productivity.
It is not always possible to do more with less.
Management
Yasar A. Ozcan

Productivity is one measure of the effective
use of resources within an organization,
industry, or nation.
The classical productivity definition
measures outputs relative to the inputs
needed to produce them. That is,
productivity is defined as the number of
output units per unit of input
Output
Pr oductivity
Input
Management
Yasar A. Ozcan

Sometimes, an inverse calculation is used
that measures inputs per unit of output. Care
must be taken to interpret this inverse
calculation appropriately; the greater the
number of units of input per unit of output,
the lower the productivity.
For example, traditionally productivity in
hospital nursing units has been measured by
hours per patient day (HPPD). That requires
an inversion of the typical calculations:
meaning total hours are divided by total
patient days.
Total Hours
HPPD
Patient Days
Management
Yasar A. Ozcan
Example 9.1
Nurses in Unit A worked collectively a total of 25 hours to
treat a patient who stayed 5 days, and nurses in Unit B
worked a total of 16 hours to treat a patient who stayed 4
days. Calculate which of the two similar hospital nursing
units is more productive.
Solution:
First, define the inputs and the outputs for the analysis. Is
the proper measure of inputs the number of nurses or of
hours worked? In this case the definition of the input would
be total nursing hours. When the total number of nursing
hours worked per nurse is used as the input measure, then
the productivity measures for the two units are:
Total Hours
25
HPPD A
5
Patient Days
5
Total Hours 16
HPPD B
4
Patient Days
4
Management
Yasar A. Ozcan

Productivity Benchmarking. Productivity must be considered
as a relative measure; the calculated ratio should be either
compared to a similar unit, or compared to the productivity
ratio of the same unit in previous years. Such comparisons
characterize benchmarking. Many organizations use
benchmarking to help set the direction for change.
Historical Benchmarking is monitoring an operational units
own productivity or performance over the last few years.
Another way of benchmarking is to identify the best practices
(best productivity ratios of similar units) across health
organizations and incorporate them in ones own.
Management
Yasar A. Ozcan

Multifactor Productivity. Example 9.1 demonstrated a
measure of labor productivity. Because it looks at only
one input, nursing hours, it is example of a partial
productivity measure. Looking only at labor
productivity may not yield an accurate picture.
Newer productivity measures tend to include not only
labor inputs, but the other operating costs for the product
or service as well.
Service Item * Pr ice

Multifactor Pr oductivity
Labor Material Overhead
Management
Yasar A. Ozcan
Example 9.2
A specialty laboratory performs lab tests for the area
hospitals. During its first two years of operation the
following measurements were gathered:
Measurement
Year 1
Price per test ($)
50
Annual tests
10,000
Total labor costs($) 150,000
Material costs ($)
8,000
Overhead ($)
12,000
Year 2
50
10,700
158,000
8,400
12,200
Determine and compare the multifactor productivity for

historical benchmarking.
Solution:
Multifacto r Pr oductivity Year 1
Multifacto r Pr oductivity Year 2
Management
10,000 * 50
2.9
150,000 8,000 12,000
10,700 * 50
3.0
158,000 8,400 12,200
Yasar A. Ozcan
10

Hours Per Patient Day (or Visit)
Hours Worked
Hours per Patient Day
Patients Days
inpatient
Hours Worked
Hours per Patient Visit
Patient Visits
outpatient
Management
Yasar A. Ozcan
11

Example 9.3:
Annual statistical data for two nursing units in Memorial Hospital are
as follows:
Measurements
Unit A
Unit B
Annual Patient Days
14,000
10,000
Annual Hours Worked
210,000
180,000
Calculate and compare hours per patient day for two units of this
hospital.
Solution:
Hours per Patient Day Unit A
210 ,000
15 hours
14 ,000
Hours per Patient Day Unit B
180 ,000
18 hours
10 ,000
Management
Yasar A. Ozcan
12

Example 9.4:
Performsbetter Associates a two-site group practice,
requires productivity monitoring. The following initial data
are provided for both sites of the practice:
Measurements
Annual Visits
Annual Paid Hours
Suburban
135,000
115,000
Downtown
97,000
112,000
Calculate and compare the hours per patient visit for the
suburban and the downtown locations of this practice.
Solution:
Hours per Patient Visit Suburb
115 ,000
.85 hours or 51 minutes.
135 ,000
Hours per Patient Visit Downtown
112 ,000
1.15 hours or 69 minutes.
97 ,000
Management
Yasar A. Ozcan
13
Adjustments for Inputs

Skill-Mix Adjustment weigh the hours of personnel of different
.
skill levels by their economic valuation.
One approach is to calculate weights based on the average
wage or salary of each skill class. To do that, a given skill
class wage/salary would be divided into the top class skill
salary.
If RNs, LPNs and Aides are earning $35.00, $28.00, and
$17.50 an hour, respectively;
Then, one hour of a nurse aides time is economically
equivalent to 0.5 hours of a RN's time; and one hour of a LPN's
time is equal to 0.8 hours of a RN's time.
Management
Yasar A. Ozcan
14
Adjusted Hours
w * X
i
Adjusted Hours = 1.0*(RN hours) + 0.8*(LPN hours) + 0.5*(Aide hours)
Adjusted Hours
Adjusted Hours per patient day
Patients Days
Management
Yasar A. Ozcan
15
Adjusted Hours
w * X
i
Adjusted Hours = 1.0*(RN hours) + 0.8*(LPN hours) + 0.5*(Aide hours)
Adjusted Hours
Adjusted Hours per patient day
Patients Days
Management
Yasar A. Ozcan
16

Similarly, in outpatient settings, if one hour of a nurse
.
practitioner's
(NP) time is economically equivalent to 0.6 hours
of a specialist's (SP) time, and if one hour of a general
practitioners (GP) time is equal to 0.85 hours of a specialists
time, adjusted hours would be calculated as:
Adjusted Hours = 1.0 (SP hours) + 0.85 (GP hours) + 0.6 (NP hours)
Adjusted Hours
Adjusted Hours per Visit
Patient Visits
Management
Yasar A. Ozcan
17
Example 9.5: Using data from Example 9.3, and economic

equivalencies of 0.5 Aide = RN, 0.8 LPN = RN, calculate the
adjusted hours per patient day for Unit A and Unit B.
Unit A at Memorial Hospital employs 100% RNs.
The current skill mix distribution of Unit B is 45% RNs, 30%
LPNs, and 25% nursing aides (NAs).
Compare unadjusted and adjusted productivity scores.
Management
Yasar A. Ozcan
18

Solution:
The first step is to calculate adjusted hours for each unit.
For Unit A, since it employs 100% RNs, there is no need for adjustment. For Unit B:
Adjusted Hours (Unit B) = 1.0 (180,000*.45) + 0.80 (180,000*.30) + 0.50 (180,000*.25).

Adjusted Hours (Unit B) = 1.0 (81,000) + 0.80 (54,000) + 0.50 (45,000).
Adjusted Hours (Unit B) = 146,700.
In this way, using the economic
equivalencies
of the
Standardized
Cost
of skill-mix,
Labor. the number of hours is
standardized as 146,700 instead of 180,000.
210 ,000
15 .0 hours.
14 ,000
146 ,700
14 .7 hours.
10 ,000
Adjusted Hours per Patient Day Unit A

Adjusted Hours per Patient Day Unit B
Using adjusted hours, Unit A, which appeared productive according

to the first measure (see example 9.3), no longer appears as productive.
Management
Yasar A. Ozcan
19

Standardized Cost of Labor. Total labor cost comprises the
.
payments
to various professionals at varying skills. To
account for differences in salary structure across hospitals or
group practices, cost calculations can be standardized using a
standard salary per hour for each of the skill levels
Labor Cost ci * X i
Labor Cost = RN wages (RN hours) +
LPN wages (LPN hours) +
NA wages (Aide hours).
Labor Cost of Care

Labor Cost Patient Day
Patient Days
Labor Cost of Care

Labor Cost per Visit
Patient Visits
Management
Yasar A. Ozcan
20

Example 9.6:
Performsbetter Associates in Example 9.4 pays $110, $85, and
$45 per hour, respectively, to its SPs, GPs and NPs in both
locations.
Currently, the suburban location staff comprises of 50% SPs,
30% GPs, and 20% NPs.
The downtown location, on the other hand, comprises 30%
SPs, 50% GPs, and 20% NPs.
Calculate and compare the labor cost of care, and labor cost
per visit for both locations.
Management
Yasar A. Ozcan
21

Solution:
First, calculate Labor Cost of Care for each location.

Labor Cost = SP wages (SP hours) + GP wages (GP hours) + NP wages (NP hours),
Labor CostSuburban = $110 (115,000*0.50) + $85 (115,000*0.30) + $45 (115,000*0.20).
Labor CostSuburban = $110 (57,500) + $85 (34,500) + $45 (23,000).
Labor CostSuburban = $10,292,500.
Labor CostDowntown = $110 (112,000*.30) + $85 (112,000*0.50) + $45 (112,000*0.20).
Labor CostDowntown = $110 (33,600) + $85 (56,000) + $45 (22,400).
Labor CostDowntown = $9,464,000.
10,292,500
Labor Cost per Visit Suburban
$76.24
135,000
9,464 ,000
Labor Cost per Visit Downtown
$97 .57
97 ,000
Management
Yasar A. Ozcan
22
Adjustments for Outputs

Service-Mix
Adjustments. Service-mix adjustment is useful
.
tool for comparison of, for instance, two community hospitals
that provide different services or have significantly different
distributions of patients among their services. The servicemix adjusted volume is weighted by a normalized serviceintensity factor.
Hi
Wi
Hi n
Adjusted Volume Wi * X i
Management
Yasar A. Ozcan
23

Service-Mix Adjustments
.
Example
9.7:
Two hospitals, each with unadjusted volume of 10,000 patient

days per month, provide only two services, S1 and S2,
requiring respectively 3 and 7 hours of nursing time per
patient day.
Hospital A has a service-mix distribution of 2000 patient days
for S1 and 8000 patient days for S2.
Hospital B has 8000 days for S1 and 2000 days for S2.
Calculate adjusted patient days for both hospitals.
Management
Yasar A. Ozcan
24

Service-Mix Adjustments
Solution:
In this case, total unadjusted volume is simply the sum of the volume for each service
in each hospital, or Unadjusted Volume = X1 + X2.
W1
Hospital-A
Hospital-B
Service S1 (3 hours/patient day)
X1=2000
X1=8000
Service S2 (7 hours/patient day)
X2=8000
X2=2000
Total Unadjusted Volume
10,000
10,000
H1
3
3
3
0. 6
H i n (3 7) 2 10 2 5
W2
H2
7
7
7
1.4
H i n (3 7) 2 10 2 5
Adjusted Volume = W1X1 + W2X2.

Adjusted volume for Hospital-A = 0.6*2,000+1.4*8,000 = 12,400.
Adjusted volume for Hospital-B = 0.6*8,000+1.4*2,000 = 7,600.
Management
Yasar A. Ozcan
25

Case-Mix Adjustments. The methodology for case-mix
adjustment is similar to that for service-mix adjustment.
Although most hospitals rely on advanced acuity systems,
each system is based on the weight factors for the different
acuity categories.
Patients in each category require similar amounts of nursing
care over a given 24 hour time period; however, across
categories the care requirements differ significantly.
For acuity, the focus is on patients direct care requirements.
The ratio of the hours of direct care provided to the total hours
worked is another measure of productivity.
Case Mix Indexj

Management
Yasar A. Ozcan
W * P
i
ij
26

Case-Mix Adjustments
Example 9.8:
Unit A and Unit B (from Example 9.3), a medical care unit in
Memorial Hospital, classify patients into four acuity categories
(Type I through Type IV), with direct care requirements per
patient day being respectively, 0.5, 1.5, 4.5, and 6.0 hours.
Annual distributions of patients in these four acuity categories in
Unit A were 0.15, 0.25, 0.35, and 0.25.
Annual distributions of patients in Unit B were 0.15, 0.30, 0.40,
and 0.15.
Calculate the case mix for these two units, and determine which
unit has been serving more severe patients.
Management
Yasar A. Ozcan
27

Solution:
W1
H1
0.5
0.5 0.5
0.17
H
n
(
0
.
5
1
.
5
4
.
0
6
.
0
)
4
12
4
3
i
W2
H2
1.5
1.5 1.5
0.5
H i n (0.5 1.5 4.0 6.0) 4 12 4 3
W3
H3
4.0
4.0 4.0
1.33
H
n
(
0
.
5
1
.
5
4
.
0
6
.
0
)
4
12
4
3
i
W4
H4
6.0
6.0 6.0
2.00
H
n
(
0
.
5
1
.
5
4
.
0
6
.
0
)
4
12
4
3
i
Case mix IndexA
W * P
(0.17 * 0.15) (0.5 * 0.25) (1.33 * 0.35) (2.00 * 0.25) 1.12.
Case mix IndexB
W * P
(0.17 * 0.15) (0.5 * 0.30) (1.33 * 0.40) (2.00 * 0.15) 1.01.
Management
iA
iB
Yasar A. Ozcan
28

Once the case-mix is determined, the output side of the productivity

ratios can be adjusted by simply multiplying volume (patient days,
discharges, visits) by case-mix index as:
Adjusted Patient Days = Patient Days * Case-mix index.
Adjusted Discharges = Discharges * Case-mix index.
Adjusted Visits = Visits * Case-mix index.
Management
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29

Hours of Direct Care. Hours of direct care is an
important component of productivity ratios. It serves as
a building block for other ratios.
To illustrate its development, let us assume that
patients are categorized into acuity groupings requiring
H1, H2, H3, ., Hm hours of direct nursing care per
patient day.
Further, assume that there are N1, N2, N3, ., Nm
annual patient days in units 1 through m.
The total amount of direct nursing care in nursing unit j
would be calculated as:
Hours of Direct Care j
* Pij * N j
i 1
Management
Yasar A. Ozcan
30

Percentage of Hours in Direct Care. This is an
additional measure can be derived from the Hours of
Direct Care calculation, as the ratio of direct care
hours to total care hours.
Hours in Direct Care

Percent of Hours in Direct Care
Hours Worked
Percentage of Adjusted Hours in Direct Care. We also
can determine the percentage of adjusted nursing hours
as adjusted for skill-mix in direct patient care.

Percentage of Adjusted Hours in Direct Care
Adjusted Hours
Management
Yasar A. Ozcan
31

Example 9.9:
Using information from Examples 9.3 and 9.8

calculate:
a) hours of direct care
b) percentage of hours in direct care, and
c) percentage of adjusted hours in direct care
for Units A and B of Memorial Hospital.
Compare these results in terms of percentage of
adjusted hours in direct care.
Management
Yasar A. Ozcan
32

Solution:
Memorial Hospital uses an acuity classification system with 4 categories
of direct hours of care per patient day: 0.5, 1.5, 4.0, and 6.0 hours.
The annual distributions of patients in these four acuity categories in Unit
A were 0.15, 0.25, 0.35, and 0.25.
The annual distributions of patients in Unit B were 0.15, 0.30, 0.40, and
0.15.
Annual patient days for Unit A were 14,000, and for unit B 10,000.
Annual hours worked were 115,000 and 112,000, respectively.
Management
Yasar A. Ozcan
33

Solution:
Hours of Direct Care A
(H
* PiA * N A ).
i 1
Hours of Direct Care A (0.5 * .15 *14,000) (1.5 * .25 *14,000) (4.0 * .35 *14,000) (6.0 * .25 *14,000)
Hours of Direct Care A 46,900

.
Hours of Direct Care B
(H
* PiB * N B ).
i 1
Hours of Direct Care B (0.5 * .15 *10,000) (1.5 * .30 *10,000) (4.0 * .40 *10,000) (6.0 * .15 *10,000)
Hours of Direct Care B 30,250

Management
Yasar A. Ozcan
34

Solution:
Percentage of Hours in Direct Care A

46,900
0.223 or 22.3%
Hours Worked
210,000
Percentage of Hours in Direct Care B
Hours in Direct Care 30,250
0.168 or 16.8%
Hours Worked
180,000
Percentage of Adjusted Hours in Direct Care A

46900
0.223 or 22.3%.
Adjusted Hours
210,000
Percentage of Adjusted Hours in Direct Care B

30250
0.206 or 20.6%.
Adjusted Hours
146,700
Management
Yasar A. Ozcan
35
Figure 9.1 Productivity and Quality Tradeoff
Quality of Output
QA
QA
QB
Hospital A
A
Hospital B
I2
Quantity of Inputs
(Staffing Level)
IA I1
Source: Shukla, R.K. Theories and Strategies of Healthcare: Technology-Strategy-Performance,

Chapter 4, Unpublished Manuscript, 1991. Printed with permission.
Management
Yasar A. Ozcan
36
Productivity Wall?
Management
Quality is difficult to measure, and

its definition is ambiguous
The relationships between quantity
of care provided and quality are
often uncertain
Yasar A. Ozcan
37
Many people confuse. . .

The concepts of
productivity, efficiency,
and effectiveness.
Management
Yasar A. Ozcan
38
Its quite simple really!

Efficiency--
using the minimum

number of inputs for a given
number of outputs
Effectiveness-- refers to outputs;
are the proper inputs being used
to produce the appropriate
outcomes?
Productivity-- a broader concept
than efficiency; refers to effective
use of a given set of resources
Management
Yasar A. Ozcan
39
But efficiency has varying dimensions..

Technical
Efficiency-- relationship
between various inputs and related
outputs; use minimum combination
of resources for a given level of
quantity or level of care.
Allocative (Economic) efficiency- adds cost to the measure of
technical efficiency.
Management
Yasar A. Ozcan
40
Graphically,
Iso-cost
MDs
Isoquant
Nurse
Practitioners
(NPs)
Assume NPs and MDs can

be substituted. The hospital
can either use 3 MDs and
2 NPs (pt. A), or 1 MD and
5 NPs (pt. B). Both result
in the same level of quality
and can produce the same
quantity of output.
Are points A and B both technically efficient?

Is point C technically efficient, why or why not?
Remember what an isoquant is? Are all points on an
isoquant technically efficient? economically efficient?
Management
Yasar A. Ozcan
41
Lets expand our discussion. . .

Data
envelopment analysis is a
recently developed technique that
can be used to measure the
multiple dimensions of
productivity.
It allows multiple inputs and
outputs to be used in a linear
programming model that develops
a score of technical efficiency.
Management
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42
Data Envelopment Analysis (DEA)

DEA can be used to measure
productivity of hospitals, physicians,
group practices, or any other unit of
analysis, referred to as the decision
making unit (DMU)
The technical efficiency score of
optimally producing DMUs equals 1
(and lies on the isoquant). All other
DMUs are measured against these
technically efficient DMUs, and have a
score of between 0 and 1.
Management
Yasar A. Ozcan
43
DEA-- A Simple Example

Inputs
P1
Visits
2
Medications 1
Physicians
P2
P3
1
3
4
1
P4
2
3
Physicians P1, P2, and P3 are

Supplies
technically efficient, ceteris
4
paribus, and would receive an
efficiency score of 1. Physician 4,
3
however is inefficient and must
reduce either visits and or use of
2
medications to become as efficient as
his/her peers. The amount of the
reduction necessary is called inefficiency. 1
0
Management
Yasar A. Ozcan
Inefficiency
P2
P4
P1
P3
LOS
44
DEA-- An Application
Ozcan and Luke (1993), A National Study of the Efficiency
of Hospitals in Urban Markets
The study examines the contribution of various hospital

characteristics to hospital technical efficiency
Outputs included:
Treated cases
Outpatient visits
Teaching FTEs
Inputs included:
Capital
Plant complexity
Labor
Supplies
Management
Yasar A. Ozcan
45
DEA Applications, cont.

Slack values allow the manager to
determine just how much the
input/output mix must be changed for
inefficient DMUs to reach efficiency
DEA is also useful for benchmarking or
development of report cards, making it
particularly useful in a managed care
environment
Management
Yasar A. Ozcan
46
Improving Healthcare Productivity

1. Develop productivity measures for all
operations in their organization,
2. Look at the system as a whole (do not suboptimize) in deciding on which
operations/procedures to focus productivity
improvements.
3. Develop methods for achieving productivity
improvements, and especially benchmarking
by studying peer healthcare providers that
have increased productivity; and reengineer
care delivery and business processes.
4. Establish reasonable and attainable standards
and improvement goals.
5. Consider incentives to reward workers for
contributions and to demonstrate
managements support of productivity
improvements.
6. Measure and publicize improvements.
Management
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47
The End
Management
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48

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Chapter 09

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Chapter 9.

Trends in Healthcare Productivity: Consequences of PPS

Trends in Productivity: Consequences of PPS

The recent decades changes in reimbursement

productivity gains from PPS have not materialized

Hospitals now employ more people to treat fewer

Although employers, insurers and public are

Trends in Productivity: Consequences of PPS

The constraints that force healthcare institutions

It must be recognized that there are limits to

It is not always possible to do more with less.

Productivity Definitions and Measurements

Productivity Definitions and Measurements

Productivity Definitions and Measurements

Productivity Definitions and Measurements

Service Item * Pr ice

Determine and compare the multifactor productivity for

Commonly Used Productivity Ratios

Commonly Used Productivity Ratios

Hours per Patient Day Unit A

Hours per Patient Day Unit B

Commonly Used Productivity Ratios

Hours per Patient Visit Suburb

Hours per Patient Visit Downtown

Adjustments for Inputs

Adjustments for Inputs

Adjusted Hours = 1.0*(RN hours) + 0.8*(LPN hours) + 0.5*(Aide hours)

Adjustments for Inputs

Adjusted Hours = 1.0*(RN hours) + 0.8*(LPN hours) + 0.5*(Aide hours)

Adjustments for Inputs

Adjustments for Inputs

Example 9.5: Using data from Example 9.3, and economic

Compare unadjusted and adjusted productivity scores.

Adjustments for Inputs

Adjusted Hours (Unit B) = 1.0 (180,000*.45) + 0.80 (180,000*.30) + 0.50 (180,000*.25).

Adjusted Hours per Patient Day Unit A

Using adjusted hours, Unit A, which appeared productive according

Adjustments for Inputs

Labor Cost of Care

Labor Cost of Care

Adjustments for Inputs

Adjustments for Inputs

First, calculate Labor Cost of Care for each location.

Adjustments for Outputs

Adjustments for Outputs

Two hospitals, each with unadjusted volume of 10,000 patient

Adjustments for Outputs

Service S1 (3 hours/patient day)

Service S2 (7 hours/patient day)

Total Unadjusted Volume

Adjusted Volume = W1X1 + W2X2.

Adjustments for Outputs

Case Mix Indexj

Adjustments for Outputs

Adjustments for Outputs

Case mix IndexA

(0.17 * 0.15) (0.5 * 0.25) (1.33 * 0.35) (2.00 * 0.25) 1.12.

Case mix IndexB

(0.17 * 0.15) (0.5 * 0.30) (1.33 * 0.40) (2.00 * 0.15) 1.01.

Adjustments for Outputs

Once the case-mix is determined, the output side of the productivity

Productivity Measures Using Direct Care Hours

Adjusted Hours = 1.0(RN hours) + 0.8(LPN hours) + 0.5*(Aide hours)

Adjusted Hours = 1.0(RN hours) + 0.8(LPN hours) + 0.5*(Aide hours)

Adjusted Hours (Unit B) = 1.0 (180,000.45) + 0.80 (180,000.30) + 0.50 (180,000*.25).