Benchmarking in Healthcare: What You Can Do Even Better
For one reason or another, the vast majority of healthcare executives blow it when it comes to benchmarking in healthcare. They think they are running great hospital benchmarking practices, but actually, what they are doing is destined to fail. One of the biggest problems with running the wrong benchmarks is that when your benchmarking fails, you become increasingly likely to have your entire strategic planning process fail too. Here is how the typical executive conducts benchmarking in the healthcare arena:
- Choose 10-15 hospitals as a peer group for performance comparisons.
- Pick peer hospitals that are a similar size and complexity.
Why the Standard Benchmarking Does Not WorkThere is a simple logic behind why the above plan tends to be ineffective: Just because a hospital is a similar size and complexity to you does not make them a role model. If you are picking 15 hospitals based solely on size and complexity, then how can you guarantee that any of them are one of the pacesetters for the hospital benchmarking metric selected? You can’t. In fact, you might have unwittingly picked out 15 hospitals that are all at the bottom ranks for that performance metric. Let’s say that is true. You made these peer groups, and unknowingly, you really did pick out some of the worst performers in your field. You now start to measure yourself against these hospitals. What does it really say about you when you outperform your self-selected peers? Only that you are doing a little bit better than the worst performers. However, it does not really give you an adequate picture at whether you are really performing at a competitive level. So under this plan, not only are you not performing at your optimum level, but you are actually giving yourself a false reality.
Benchmarking in Healthcare: IllustrationIt might be easier to examine this with an example: Let’s say that Community Medical Center is conducting a benchmarking in healthcare exercise for surgical site infections. For this metric, lower values are better, with 0% meaning that the organization had no surgical site infections. Community Medical Center, with a surgical site infection rate of 9.6%, selects 10 similar hospitals to compare itself to and discovers that its surgical site infection rate is better than the 10 facilities in the hospital benchmarking group. As such, Community Medical Center feel pretty good about its performance. However, there are 5,000 other hospital in the U.S. and had Community Medical Center evaluated its surgical site infection rate against all U.S. hospitals, it would have discovered that 9.6% falls in the bottom 10% of all facilities. They would have also discovered that the top 10% performing hospitals had an average surgical site infection rate of 1.3%.
The Right Way to BenchmarkWhat many healthcare professionals call benchmarking really isn’t. All it entails is comparing yourself to a self-selected peer group. In order to be really effective, benchmarking in healthcare should be more like benchmarking in any other field. This means that you select comparison hospitals based off their performance levels. Best practice for quality management programs in other industries looks like this:
- Identify the top performers for each particular metric you want to monitor.
- Evaluate your performance against those organizations.