What is Benchmarking?• Benchmarking is comparing your performance to the performance of others. It facilitates the understanding of performance and how your costs compare to similar facilities.• It relies on measurement, comparison and metrics to facilitate management. Because benchmarking measures performance at different times, it’s an important tool for observing changes in facility activity. Knowing how your compensation levels are compared to your peers can help to persuade administrators, owners, board members and physicians to implement change. Solid data can be provided to make decisions and affect positive change in your facility.• Benchmarking in the ambulatory surgery center industry is the collection of clinical and financial data that shows how one facility is performing compared to other centers. As with any survey, larger sampling typically results in a more accurate picture.
Basics Concepts of Benchmarking1. MEASURE: – Must be done consistently, with the same methodology.2. COMPARE: – Utilize a “best performer” or performance of a relevant group as a comparison.3. ANALYZE PROCESS: – Focus on understanding the relationship of process to results so we will know how to improve.
What are Benefits of Benchmarking?1. A facility may immediately compare itself with the aggregated performance of peers by accessing reports prepared especially for that member facility.2. Benchmarking patient outcomes clearly shows the position of a surgery center among other similar facilities in the industry, and offers a powerful marketing tool distinguishing a center from the competition.3. If your facility is accredited by the AAAHC or JCAHO, performance improvement and benchmarking are required.
Types of BenchmarkingHistory of Benchmarking• The popularity of benchmarking was spearheaded by the Xerox corporation in the 1970’s and 1980’s and is now used in corporations throughout the world including healthcare.Three Types of Benchmarking• There are three types of benchmarking; internal which is focused on the processes of a single company, external which examines processes outside of a company’s direct industry and competitive, which examines processes at firms within the same industry.1. Internal Benchmarking• The internal benchmarking process allows a company with a number of facilities that operate the same supply chain processes to compare and contrast the ways in which the process is performed in those facilities. For example if a company operates five distribution centers, the benchmarking process can examine a number of operations that take place at each of the distribution centers and compare how they are performed and what improvements can be made by comparing the results of the benchmarking. If a company benchmarks the processes around inventory accuracy, shipping accuracy and storage density, the results of the assessments of the facilities can help a company to improve on those processes at all of the facilities.
Types of BenchmarkingTypes of Benchmarking (Continued)2. External Benchmarking• For companies that have performed internal benchmarking and want to investigate new ways in which to improve performance of their internal processes, external benchmarking can produce significant improvements. Many companies believe that their processes are as efficient as possible, but quite often, the efficiencies are limited by the knowledge within the company. The external benchmarking process takes a company outside of its own industry and exposes them to different methods and procedures. For example, a manufacturer and distributor of electrical components have internally benchmarked their warehouses for a number of years and have exhausted ideas on improving efficiencies. They approach a very successful retail company to visit their central warehouse and benchmark the processes that occur there to compare to their own warehouse processes. The external benchmarking allowed the manufacturer of the electrical components to assess the processes seen in the retailer’s warehouse and develop an improvement plan for their own facilities based on the results.3. Competitive Benchmarking• For companies that are not performing as well as their competitors they may want to identify the reasons why their processes are not as efficient. Consulting and research firms can perform competitive benchmarking studies for companies that will identify the strengths and weaknesses of their processes based on those of their competitors. The company can then produce improvement plans based on the results of the competitive benchmarking.
Components of Benchmarking• There are a number of components to a benchmarking study. Not every benchmarking project will incorporate these components, but a combination of these can be used.1. Financial benchmarking – This involves a financial analysis of the operations that are assessed. For example, a company can compare the cost of storing medical supplies in each of its locations.2. Performance benchmarking – This can compare the efficiency of performing a task in one company location to another, or to a competitor’s.3. Product benchmarking – This method compares the product of one company against another, or comparing between facilities in the same company.4. Strategic benchmarking – This method observes how other companies compete. This can be within the same industry or outside of the companies industry.5. Functional benchmarking – This is considered to be traditional benchmarking where a company will benchmark a single process at a location or a number of locations to identify where efficiencies can be made.
Why benchmark?1. Set high standards for performance to meet patients’ and staff’s expectations.2. Prepare for public disclosure/transparency and pay for performance measures.3. Meet accreditation requirements:• Accreditation Association for Ambulatory Health Care (AAAHC) Quality Management and Improvement chapter specifies benchmarking activities.
Why benchmark?4. Develop and sustain a culture of learning and improvement.5. Strategic Planning: To allocate resources wisely, to areas most likely and most important to improve.• Benchmarking gives you tools to assess whether particular areas should be the focus of improvement activities.”• “If you’re performing well and your infection rates, at less than one percent, are better than at the local hospital, then a consumer may want to choose the ASC as opposed to the hospital as a setting for their surgery,” ASC Administrator, Plano
AAAHC & Benchmarking• The Accreditation Association for Ambulatory Health Care (AAAHC) has made benchmarking a priority.• “The AAAHC Institute for Quality Improvement, which is a nonprofit subsidiary of the AAAHC, offers a number of opportunities to participate in studies,” says Naomi Kuznets, director of the AAAHC Institute for Quality Improvement. The AAAHC established the institute in 1999 to provide ambulatory healthcare organizations opportunities to participate in clinical performance measurement studies and educational programs.• “In terms of surgery studies, we have cataracts, colonoscopy, knee arthroscopy, and now we’re just beginning a study on myringotomy, tube insertion,” Kuznets adds. “We usually do those on an annual rotation. We offer education on quality improvement and benchmarking, and we usually do that in coordination with the AAAHC’s educational conferences, ‘Achieving Accreditation.’”• Both AAAHC-accredited and non-accredited ASCs provide the data that is used for benchmarking; they can be single- or multi-specialty, and can be office- based as well as freestanding centers.
Role of Benchmarking in the Performance Improvement Cycle Benchmarking plan, Benchmarking Design and Measure:research, site visits and identify importantanalysis have identified measures, leaders, and critical success factors details of their for improving the successful processes process under study Benchmarking Benchmarking provides the rigorous analysis: provides comparative data to process and measures help you set goals and to “jump-start” your monitor progress improvement project
How can Benchmarking can help us?1. Ensures the facility is working on the right priorities.2. Once priorities have been selected, benchmarking can support improvement to an optimum level.3. Once ASC team members decide to participate in a benchmark survey, they have options which include programs run by the Ambulatory Surgery Center Association, SOIX and the Medical Group Management Association (MGMA) among others.4. It is advantageous to benchmark with more than one group. Not all organizations collect the same data.
How can Benchmarking can help us?Toyota’s Modular Approach• A process borrowed from Toyota was the key to the successful reorganization of a practice’s entire central business office. The goal was to create business processes with fewer errors. Toyota’s manufacturing approach of cross-trained small teams might made sense.• Toyota’s key approach: Teams, Information and Accountability.• By converting a functionally organized (customer service, billing, posting, etc.) office into workgroups. A workgroup has 3 or 4 team members who handle all aspects of a business office for an assigned small group of physicians. The operation is now very modular, like an efficient manufacturer. As new physicians come on board, new workgroups can be created.• The payoff:• Business office staff are more accountable for accuracy; communication between patients and business office staff has improved; and the system redesign has created better working relationships among physicians, clinical and business office staff.
How can Benchmarking can help us?Identifying Emerging Trends• A plethora of trends are proliferating recent data. Knowledge of these trends can prove to be a real asset on the development and future shaping of an ASC.• When a trend develops within your industry, you don’t want to find out after the fact. The rapid growth of ASC development proves that surgery centers do not have the luxury of waiting annually to discover the national average. Your local Joint Commission accredited hospital could have taken your business away.• The following trends were identified in recent benchmarking studies:1. Averaging OR times across six orthopedic procedures, from ACL repair to shoulder arthroscopy, the “average” OR time reported is 73 minutes. The longest time is seen in ACL repairs and the shortest time is seen in carpal tunnel release.2. The average OR time in cataract procedures reported is 34 minutes, and the average OR time for GI endoscopy is 22 minutes (this includes EGDs, 17 minutes and colonoscopy, 27.5 minutes).
What can we Benchmark?High strategic priority • Medicare, JCAHO, State mandates, High-volume Payors • Patient / Customer Satisfaction • High-profile quality and patient-safety advocacy organizations • Private subscription membership data systems • Specific collaborative and consortium efforts • Operational problem areas requiring research and investigationHigh operational priority 15
What can we Benchmark?Benchmarking Example ItemsBenchmark Items Benchmark Items Total Cases Preformed Chart Deficiencies Reported Occurrences History & Physicals Medication Errors Dictations Narcotic Counts Billing delays > 5 days Adverse Drug Reaction Pending Signatures > 30 days Post-Op Complications (48*) QA Program - # of studies Incorrect Site New/Revised Policies Introduced Reported Infection/Complication Peer Review - # Employee Injury/BBP Exposures Patient Surveys Returned Other Positive Response Delays Negative Response Anesthesia - Induction/Emergence Case Cancellation Physician Late Arrival No Show DOS Prior Case Delay/Case Time Insufficient In Pre-Op PACU Beds/Equipment In OR before induction Facility Personnel In OR post induction Hospital Transfers Overnight Stays Sentinel Events
What Financials can we Benchmark?• In addition to the clinical and patient satisfaction, examining means, medians, and standard deviations of financial indicators is of equal importance.• In a pure financial benchmark, we can measure:• Number of cases• Gross billings• Net revenue• Accounts receivable days• Net income• Operating income• Staffing costs• Staffing costs per patient• Supply costs per patient• Gross margin per patient 17
Examining Data• Exercise caution in comparisons, don’t stack a endoscopy center against an orthopedic center. Examine the center’s specialty mix.• Annual operational benchmarks for laundry and linen expenses, office expenses, telephone expenses, and housekeeping expenses can identify outliers.• One center suspected laundry and linen expenses were inflated. After an audit they found they had been inadvertently overcharged nearly $12,000. A credit was issued but if the benchmarking wasn’t performed, this outlier might not have been caught. The numbers pointed to the right direction, started the questioning, and the questions turned into the problem.
Examining Data• While benchmarks often tell ASC administrators what they already know, the data can at other times be a big surprise.• When you find out your supply costs are 32% higher than at another surgery center for the same procedure, you examine supply usage closely and what you are paying for each supply item. Clinical benchmarking studies have surprised some providers who thought their complication rate was low, making them take a hard look at their patient care processes.• Most surprises are usually modest. Maybe a infection rate is at 1.5% vs. the average at 1%. Or cost for supplies is 35% and the average is 28%. While not critical, there’s opportunity for improvement.
Examining Data• If an ASC discovers that they had exceptionally lengthy recovery times, that number might be reflected in man-hours per patient. Is the facility overstaffed or is there an anesthesia problem?• Scrutinizing A/R days can point to many problems. Are they not pre-certifying properly, not getting bills out on time, or are the claims not going out cleanly?• Benchmarking is only a first step and does not provide all the answers. For instance, one ASC may have higher costs than a competitor, but there could be a reasonable explanation. The same goes for clinical benchmarking. It may well be that the 1.5% infection rate is because they have a patient population that’s more at risk.
Implementing Change• ASC’s should know ahead of time that their efforts should translate into valid reports that can lead to change in the surgery center.• Benchmarking should be a continuous process as a function within the performance improvement module of your organization. Surgery centers should not implement benchmarking tools into their organization without a plan to use the data to improve their business.• Many people get benchmark information, but they don’t know how the best performers got to that and how it differs from what they’re doing. You need to look logically at whether what others are doing makes sense for your organization and if it does then try to incorporate that to see if it helps your performance on a particular measure. The numbers alone are not enough. It’s the information behind the numbers that’s really important.• Q: How would you describe how benchmarking has helped you to improve your facility and remain competitive?• A: “Benchmarking gives the center the opportunity to measure both quality and financial outcomes to other facilities and, if warranted, to establish quality improvement projects, which in turn improve the quality of care provided. To be able to measure our center’s results with other like centers can be used as a motivational tool for both the center’s staff and the medical staff to constantly improve our processes. Having outside data available enhances our ability to make sound business decisions.” ASC Administrator, Beaumont
Help with Benchmarking Who are a few resources for help with Benchmarking?
Amerinet & Benchmarking• Amerinet has designed benchmarking solutions to assist in assessing supply chain and workforce efficiencies through data analysis.• Their solution set is comprised of software resources and professionals dedicated to optimizing workforce productivity and reducing clinical and operational expenses.• Amerinet offers resources to help your facility measure performance against national benchmarks and trend performance over time, including:1. Cost studies - Review historical invoice data and compare to current costs.2. Line item comparisons for medical and surgical products. – Identify best price and contract tier maximization.3. Real-time / Daily pricing audits - Examines pharmacy distributors.4. Utilization and Profitability – Data organized by inpatient DRG.5. Comparison Reports - Examine organization, facility and department levels.6. Links to national benchmarks.
ASC Association & Benchmarking• Kathy Bryant president of ASC Association. “The Outcomes Monitoring Project is the industry’s standard and meets AAAHC and JCAHO requirements for benchmarking.”• This quarterly benchmarking tool is used by ASCs to compare their operations to those of more than 400 other ASCs. Twenty-two indicators are used, including initial claims denial rates and days accounts receivable outstanding. “The Outcomes Monitoring Project is an invaluable resource when communicating with federal and state officials, since ASCs can point to positive industry data contained in the reports, such as: more than half of ASCs have less than 1.5 complications and 0 infections per 1,000 procedures,” Bryant adds.• Clinical markers include complication rate, transfer rate and infection rate; financial include days A/R outstanding, claims denial rate and total net charge. Operational markers for staff include paid clinical and non-physician hours; clinical staff turnover rate and non-clinical staff turnover rate; while process markers include on-time rate, OR time per encounter, procedure room time per encounter, OR use rate, procedure room use rate and cancellation rate.• The data is used to compare with other centers across the country to find ways to improve efficiencies and care. And since the reports meet AAAHC and JCAHO requirements for benchmarking, many ASCs participate in order to meet this requirement.
Benchmarking Examples• Benchmarking has proven useful in many settings and industries including healthcare.• The most common indicators are clinical elements of performance and finance.• Let’s explore some examples……
Benchmarking ExamplesPublic Clinical Data about Facilities Hospital X Source: www.cms.gov
Benchmarking ExamplesFall Rates Inpatient Fall Rate Compared to Benchmarks 8 7 6 5 4 3 Falls/1000 days 2 Benchmark Low 1 Benchmark High 0 Q4 Q1 Q2 Q3 Q4• Definition: – Numerator: Reported falls – Denominator: Patient Days/1000• Benchmark Source: AHRQ• Benchmark represents: Average reported inpatient fall rate in acute care hospitals
Benchmarking ExamplesPatient Satisfaction• Definition: Overall satisfaction on • Conclusions: Facility performance validated standardized survey slipped and has improved to about instrument from ASC Vendor the median. We are still well below• Benchmark Source: ASC Vendor 90th percentile in our peer group.• Benchmark represents: 73 organizations in our size, type and region peer group
Benchmarking ExamplesNational Measure of Postoperative DVT/PE PostOperative DVT/PE: Our Data vs. AHRQ Benchmarks16 14.2 13.614 12.6 121210 8 6 4 2 Our Data AHRQ Post Operative DVT or PE UCL LCL 0 Empiric 2003 Empiric 2004 Empiric 2005 Empiric 2006 Source: www.ahrq.gov
Benchmarking ExamplesSetting the right goal Falls/1000 days Benchmark Low Inpatient Fall Rate Compared to Benchmarks Benchmark High 8 Bench Group Low Bench Group High 7 6 Current 5 performance 4 Our target range of performance based on benchmarking similar organizations 3 2 1 0 Q4 Q1 Q2 Q3 Q4 Source: http://www.premierinc.com/safety/topics/falls/
Seven Steps to Effective Competitor Benchmarking• 1. Determine which functional areas within your operation are to be benchmarked -- those that will benefit most from the benchmarking process, based upon the cost, importance and potential of changes following the study.• 2. Identify the key factors and variables with which to measure those functions -- usually in the general form of financial resources and product / process strategy.• 3. Select the best-in-class companies for each area to be benchmarked -- those companies that perform each function at the lowest cost, with the highest degree of customer satisfaction, etc. Best-in-class companies can be your direct competitors, or even companies from a different industry (Parallel competitors with replacement or substitute products or services; latent competitors which might backwards or forwards integrate into your market; or, out-of-industry firms with whom you do not compete, but which have best- in-class areas to be studied such as FedEx or Wal-Mart in logistics).• 4. Measure the performance of the best-in-class companies for each benchmark being considered -- from sources such as the SEC, companies themselves, articles in the press or trade journals, analysts in the market, credit reports, clients and vendors, trade associations, government sites or from interviews with other organizations willing to share their prior research or exchange it with you.
Seven Steps to Effective Competitor Benchmarking• 5. Measure your own performance for each variable and begin comparing the results in an apples-to-apples format to determine the gap between your firm and the best-in-class examples.• 6. Specify those programs and actions to meet and surpass the competition based on a plan developed to enhance those areas that show potential for compliment. The firm can choose from a few different approaches -- from simply improving performance, to emulating the best-in-class, changing the rules of the industry or leapfrogging the competition with innovation or technology from outside the industry.• 7. Implement these programs by setting specific improvement targets and deadlines and by developing a monitoring process to review and update the analysis over time. This will also form the basis for monitoring, revision and recalibration of measurements in future benchmarking studies.• ROI can be measured in documented successes in terms of: – New business and the profitability of that new business – A problem solved – Or costs contained or reduced by the implementation of the benchmarking process.
Five Benchmarking Mistakes to Avoid• Benchmarking has become embedded in most organizations as part of the way to stay competitive. Here are some of the most common mistakes organizations make when benchmarking, and how you can avoid them.• Mistake #1. Confusing benchmarking with participating in a survey.• A survey of organizations in a similar industry to yours is not really benchmarking, whatever it may be called. Such a survey will give you some interesting numbers, but benchmarking is the process of finding out what is behind the numbers. In other words, a benchmarking survey may tell you where you rank, but it wont help you improve your position.• Mistake #2. Forgetting about service delivery and customer satisfaction.• Benchmarking stories abound of organizations that have become so fixated on the cost of providing their product or service that they have failed to take the customer into account. Paring down the costs often rebounds in lesser service delivery, so customers go elsewhere and ultimately you dont have a business. Take a "balanced scorecard" approach when developing your benchmarking metrics.• Mistake #3. The process is too large and complex to be manageable.• A process is a group of tasks. A system is a group of processes. Avoid trying to benchmark a total system - it will be extremely costly, take ages, and be difficult to remain focused. Better to select one or several processes that form a part of the total system, work with it initially and then move on to the next part of the system.• Mistake #4. Misalignment.• Choosing a benchmarking topic that is not aligned with the overall strategy and goals of the business ; or worse, cuts across some other initiative the organization is already taking. A team approach at the strategic level needs to oversee the benchmarking project and make sure that it s in line with what is happening in the business as a whole.• Mistake #5. Picking a topic that is too intangible and difficult to measure.• "Employee communication" is probably the most slippery concept that exists in an organization, but it is often cited as one of the worst problems Many organizations have tried to benchmark it. Encourage your benchmarking team to select instead a part of the topic that can be observed and measured; for instance, the process of distributing memos around the organization.