Benchmarking in Healthcare: Steps for Improvement

The online Business Dictionary defines benchmarking as:

A measurement of the quality of an organization’s policies, products, programs, strategies, etc., and their comparison with standard measurements, or similar measurements of its peers. The objectives of benchmarking are (1) to determine what and where improvements are called for, (2) to analyze how other organizations achieve their high-performance levels, and (3) to use this information to improve performance.(1)

Fundamentally, this means that benchmarking is used to evaluate or check by comparing with a standard. One prominent sales management consulting organization, The Alexander Group, simplifies the goals in the Business Dictionary definition as follows: First, to diagnose and solve issues. Second, to define the future of the organization. Third, to continually improve.(2) Another company specifically aimed at helping healthcare organizations, Intalere (formally Amerinet), notes in a white paper on benchmarking that benchmarks are necessary, not just to determine how an organization is doing compared with its goals, but also compared with other healthcare organizations.(3)

In this process, the best way to reach any such goals is to understand the different methods of benchmarking, assure benchmarking of relevant measures, and create action plans.

Benchmarking Methods

When most companies think of comparing their business with others, they think only of comparing it with competitors and peers. This competitive benchmarking—the most widely recognized type of benchmarking—is easily used. Most industry associations have databases that house information on which to base basic company comparisons. For example, in healthcare, the Medical Group Management Association’s DataDive facilitates this type of comparison and allows medical practices to evaluate themselves compared with others within the same specialty, within the geographic region, or generically within the industry.

Other types of benchmarking can be just as valuable. One such type is internal benchmarking. It is done by many businesses, but administrators, owners, and managers often do not realize that this is benchmarking. By monitoring measures within a business from one month or year to the next, administrators can see growth, decline, or anomalies, and much value can be derived from comparing these data. By seeing these changes, recognizing their significance, and planning action accordingly, a business can maintain a healthy schedule, market share, or financial status. Similarly, another form of internal benchmarking involves comparing part of the business to the whole. This allows managers or administrators to see how a location, provider, or specific staff member is performing compared with the business as a whole.

Internal benchmarking typically is done to diagnose problems or determine whether there is an internal workflow issue. Benchmarking also can be used to prove or disprove a theory. For example, staff may report to a manager that a particular member of the team is “always” scheduling appointments incorrectly. Typically, the benchmark for a clinic is that no, or very few, appointments have errors in scheduling. To determine where staff members fall on the scale of this benchmark, each appointment should be reviewed and compared with the goal. When this review is completed, it can be determined how often a staff member makes scheduling errors and whether a corrective action plan must be created. This type of benchmarking can be done over a short period of time, even as little as one or two weeks.

Clinics also can use functional benchmarking, in which a comparison is drawn between two unrelated industries that have similar functions. The benchmarking is then used to show “If they can, why can’t we?” and challenge the status quo. Although it can be hard to see that these comparisons are apples-to-apples, they usually are akin to Granny Smith vs. red delicious apples, bearing some fundamental similarities.

One example of functional benchmarking could be a comparison between hospitals and hotels. Both have client/patient check-in, places for them to stay, and staff who clean up after the clients/patients. As you can see, there are many places for comparisons to be drawn and goals set. This benchmarking might reveal an avenue for improvement in efficiency or challenge the way things have always been done in an organization. Either one allows for the company to improve and grow.

The last type of benchmarking requires thinking outside the box. In generic benchmarking, two unrelated industries are compared on seemingly unrelated processes. This could be described as comparing apples to oranges: although both are fruit, they are distant relatives at best. One widely known example of this comparison is Disney versus healthcare (“If Disney Ran Your Hospital”(4) and the many spinoff articles). The comparison is focused on patient care, patient experience, and how healthcare can use Disney’s approach to visitors’ experiences as a model to improve healthcare. Another generic benchmarking pair would be airlines and healthcare, where the comparisons can range from scheduling(5) to safety.(6)

Determining What to Benchmark

Benchmarking processes, procedures, and metrics within a healthcare organization can be overwhelming. To keep the process from becoming a burden, benchmarking should focus on key performance indicators (KPIs) for the organization. Dave Gerhardt, the Director of Business Development and Communications for Arbill Industries, defines KPIs as “metrics (Indicators) that are directly aligned with your business goals (Key), and measure how successful (Performance) you are at achieving your objectives.”(7 )Thus, KPIs typically are tied to the strategic plan of the clinic. Other benchmarking may occur when specific issues arise.

A sample focused strategic plan for a medical clinic might look like this:

• Operations: Decrease patient wait time in the exam room.

• Marketing: Develop social media marketing strategy to increase patient numbers.

• Human resources: Ensure rightsizing in all departments (e.g., front desk, medical records, billing, clinical).

• Patient care: Lower the number of hypertension patients with uncontrolled blood pressure.

• Finance: Reduce the number of payment denials based on inaccurate coding.

These focused, finite goals then direct the leaders toward which items need to be investigated, which benchmarks have to be set, and which action plans must be created to achieve the desired goals.

Many metrics or measures can be used in determining the current status of the clinic with respect to its goals. A clinic must first measure the current status of the strategic goal before it can determine a benchmark goal. For example, when aiming to “decrease patient wait time in the exam room,” the clinic must first determine what the current wait time is for each provider. Then the clinic can determine whether the benchmark will be internal (e.g., a specific provider setting the goal), competitive (e.g., goal determined based on another clinic in town, or in the same specialty), or perhaps functional or generic (e.g., the workflow at a car repair shop). However, this assumes that the clinic has a method to measure the wait times and patient flow through the clinic.

Finding the measures to monitor KPI depends on the organization’s ability to collect data. The electronic health record or practice management system of the organization typically collects much of the data needed for measuring KPI progress. If the data are not available, a new strategic goal and relevant KPI should be selected and benchmarked for improvement. Because many workflows in a clinic are interconnected, improvement in one area may have an effect in the original area of concern. Without data, however, the improvement cannot be quantified.

There are many areas that clinics usually monitor and thus have the ready ability to benchmark. The main areas of focus can be operations (e.g., product, marketing, services), finance (i.e., income, accounts receivable, accounts payable, revenue), or human resources (i.e., staffing, turnover, wages, benefits). Whichever area is chosen, leaders should remember that, as Intalere(3 )notes in its white paper, it is unwise to use benchmarking if the organization has not already performed an internal analysis or process review.

Action Plan

Once internal data are gathered to determine the current position of the clinic and a benchmark has been set defining the goal, the next step is to perform a gap analysis and create an action plan. A gap analysis is the creative phase of the process, where ideas are generated about why the clinic has not reached the desired benchmark. The analysis should be performed by a team consisting of both leadership and staff who have a stake in the process. For example, in a practice working to improve patient wait time, as discussed earlier, the staff would include front desk, clinical staff, and a provider. The team should be fairly small. A team of more than 10 people will have difficulty achieving consensus; a team of just one or two people and the ideas generated usually reflects the point of view of the most senior person or the one in the leadership position. The team also may benefit from including someone from outside the clinic, such as a marketing account representative, an external IT advisor, or a consultant, who can provide a fresh perspective on the situation.

As the first step in the team gap analysis, everyone reviews the information on where the clinic is currently and where the benchmark has been set. If a benchmark has not been set, team members collaborate to determine what the benchmark should be. Next, the team looks at a variety of ideas for moving the clinic from point A (current position of the clinic based on internal data) to point B (the chosen benchmark or goal). Finally, an action plan is developed.

An effective action plan must include the desired action, who is responsible for that action, and a timeline for completion. These plans typically follow the Plan-Do-Study-Act (PDSA) approach endorsed by the Institute for Healthcare Improvement.(8 )The planning phase is completed during the gap analysis discussed earlier. Once the steps are identified and responsibilities assigned, it is time to implement the actions designed to improve the desired KPI. Only by measuring the progress of the clinic along the line from point A to point B can an organization determine whether the planned improvements are working.

During the gap analysis and planning phase, there can be more than one suggested action for moving a data point toward the selected benchmark. Sometimes not all of the suggested improvements can be implemented at once. By monitoring the relevant KPI in accordance with the action plan, a clinic can quickly determine whether it is moving toward the desired goal, or whether a different improvement action should be implemented.

Once the clinic has determined that an action is achieving the desired results, the clinic must determine how to keep the momentum going. This can be done by putting the new procedure in writing, changing a temporary position to a permanent one , or writing a plan for future use. The decision process (including the PDSA cycle) should be documented for future reference.

Conclusion

In this new age focused on value, organizations must continually look for ways to improve. By evaluating itself against a chosen standard, an organization can determine its health and find ways to ensure continued growth and improvement. Determining the strategic goals of the organization is the first step in finding areas for improvement. Goals then lead to KPIs that can be measured, and benchmarks can be set either from internal or external sources. Creative teams of leadership and staff then perform gap analyses and create action plans to move the organization in the desired direction. By benchmarking the clinic’s KPIs and designing action plans, clinics are able to identify, diagnose, and solve internal issues, set goals for the future, and ensure that improvement is a continuous effort.

References

1. BusinessDictionary.com. www.businessdictionary.com/definition/benchmarking.html. Accessed June 12, 2018.

2. Vinogradov P. Sales benchmarking for all seasons. The Alexander Group. August 6, 2013. www.alexandergroup.com/blog/sales-benchmarking/sales-benchmarking-for-all-seasons . Accessed July 2, 2018.

3. The benefits of healthcare benchmarking: how to measure and beat the competition. Intalere.com . Updated October 13, 2016. www.intalere.com/Amerinet%20Documents/Amerinet-Benchmarking-Whitepaper.pdf. Accessed August 24, 2017.

4. Lee F. If Disney Ran Your Hospital: 9 1/2 Things You Would do Differently. Bozeman, MT: Second River Healthcare Press; 2004.

5. If air travel worked like health care. TheNewAltons. https://youtu.be/5J67xJKpB6c .

6. Kapur N, Parand A, Soukup T, Reader T, Sevdalis N. Aviation and healthcare: a comparative review with implications for patient safety. SAGE Journals. January 2016. doi:10.1177/2054270415616548.

7. Taylor J. Business metrics vs KPIs. What’s the difference? Klipfolio.com . October 27, 2017. www.klipfolio.com/blog/business-metrics-vs-kpis . Accessed May 20, 2018.

8. Plan-Do-Study-Act (PDSA) Worksheet. Institute for Healthcare Improvement. www.ihi.org/resources/pages/tools/plandostudyactworksheet.aspx . Accessed June 18, 2018.