A major part of the work being done, for the health care system I work in, to improve operationally relies heavily on benchmarking. I am not going to try and explain the detailed process but it definitely consumes a lot of the time I spend at work in some fashion. Dating back a decade or so, the organization decided that in order to compete with other hospitals across the country it would be necessary to compare operating statistics, focusing primarily on productivity. The goal was simple enough: improve your productivity numbers and your costs would decrease. Productivity in this case referred to worked hours per unit of service, which was a ratio that determined in essence the amount of work that was paid for to complete a volume of service that represented roughly 80% of the value added work they did. For example on nursing units the service is patient days.
This system has been in place for at least a better part of the last decade and has evolved over time to accommodate more departments and different services. However, as health care is changing at an ever rapid pace, is benchmarking to a national database the best way to continually improve an organization to keep up with the changing landscape? I will go on record as to say it is not the best practice and improvements can be made without comparing nationally. There are several issues that I would like to address.
Issue Number 1. Substantial Time Involved in Creating Benchmarks.
- Without going into details into what benchmarking entails where I work, it involves substantial man hours to update and maintain the benchmarks. It at a high level requires obtaining data, submitting it, finding the appropriate compare groups in the database, and then setting targets for hundreds of hospital departments. The targets are then used to drive improvement, however the sheer volume of time for the task of creating and maintaining these benchmarks puts limits on the time that can be spent actually improving a department.
Issue Number 2. Substantial Time Involved Defending the Benchmarks
- With the ownership of creating and maintaining the organizational benchmarks in the hands of nonclinical experts, there is never a good enough reason for staff as to why the number determined as their target is legitimate. These issues include my unit is too unique to be benchmarked, my services are not all being counted, the others I am being compared to do their work a differently, or why should my departments target be set tighter than someone else's to name a couple. Now, these questions do have some merit since creation of benchmarks is not an exact science, however the amount of time nit picking a relatively arbitrary number is substantial. Instead, the mindset is supposed to be more towards seeing that target, accepting it was made fairly, and making improvements in the direction of it
Issue Number 3. Gaming of the System
- Benchmark targets are not always standard for similar units organizationally because each hospital has its own unique characteristics so each unit while they may be similar, treats a different patient population to an extent. Over time some units within the organization have been allowed to count certain services differently. For example in imaging departments units of service are based on RVU's or relative value units since they do a wide variety of procedures. What procedures all count for their unit of service can vary, and over time each facility has been able to add or subtract out different procedures in favor of higher counting procedures which skew their units of service. It is easy to get lost in the variety of procedures they do and managers are able to adjust accordingly to give them more wiggle room in labor targets. The benchmarks are not being used correctly to improve, but rather to hide inefficiencies and avoid making change in these departments.
Issue Number 4. Cost to gain Access to Service
- Simple case against here, the cost to obtain a license is $250,000 for the length of the contract which to my knowledge is a few years. What this cost gets you is access to other hospitals data so that you can contact them to share improvement ideas, provided you submit your data yearly. In that sense this cost is great, but per issue numbers 2 and 3 more time is spent questioning and not believing the peers. For a hospital system this cost is per facility as well so it can get pretty expensive. With the data hospitals can now track with the emergence of electronic health records is it really beneficial to pay for this when opportunity for improvement can be set internally, for basically no cost? Also organizationally the idea is to cut cost wherever possible everywhere and these licenses would be low hanging fruit.
Issue Number 5. Not Compared with the Top Organizations
- Not all hospitals in this country are subscribers to these benchmarking firms who hold the data. The reasons for not benchmarking are not important, but for a system who wants to compete with the best operationally, a few of the biggest players are left out. When speaking in terms of profitability, the best of the best are the for profit hospitals and they are not present in the benchmarking database. They have their own benchmarking internally that is usually much more robust and strict in terms of labor and other operating costs. Yet, the hospitals in the benchmarking database are trying to improve to the top quartile nationally without really considering the top departments operationally in the country. This creates problems of setting possibly unreachable targets that are not even getting departments to the best of the best performance.
Operational Benchmarking is not the end all be all for hospital success. There are quality benchmarks as well and patient satisfaction to consider and are arguably more important. However, money in health care is a big issue and keeping that in check requires management of resources. The issues I have gone through are not all that can be said against benchmarking nationally in the databases that currently exist, but are rather just points to maybe turn the tide of what improvement can and should be.
It is my belief that if benchmarks became internal, several of these issues would subside. Cost to gaining access to service would not be as substantial and would be internal resources managing their own information to instigate change. Comparing with a database would not be occurring either, but rather the focus would shift on the actual improvement itself. The numbers presented to each department would be their numbers and the goal would be to improve their costs a determined amount, or maintain current operating performance. These numbers would be much easier to run and update reducing the time involved, and the defense of these benchmarks would not be necessary as they are just each units true operating numbers instead of comparing with other similar hospitals which causes all the complaints. Gaming the system will most likely always occur as pressure to produce positive operating margin is paramount, however by giving them the numbers for their units and not comparing to other hospitals outside the organization would hopefully minimize this issue as well.
Benchmarking is important when used correctly. As it stands for my job it could be useful if the numbers did not take a large amount of time to gather, analyze, and defend. If they were accepted up front change could happen. The shift needs to be towards change and constantly striving to do better. Reach this operating cost, great, but now eliminate inefficiencies and do even better. This involves everyone doing the work and not just outside sources telling you your numbers. Collaboration between finance, managers, administration, and front line staff is necessary to succeed in controlling costs. Placing the benchmarking data at the source, internally can help this transition. Then the focus can be on change within and always wanting to do better.
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