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.

An example of this process can be seen by looking at a 350-bed urban hospital with a Level 1 trauma center. Based off the above plan, this hospital would choose its peer groups based off of hospitals who are a similar size. Those will be the hospitals it compares itself to.

The only problem is that this is very wrong.

If you are currently doing it this way, though, do not despair. Most of your peers are as well. In fact, this type of thinking has become so embedded in the strategic planning model of healthcare organizations that it has become epidemic.

It is not too late to change, though.

Why the Standard Benchmarking Does Not Work

There 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: Illustration

It 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 Benchmark

What 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.

For more information on benchmarks in healthcare, read Harvard Business School’s “Best Practices for Benchmarking.” Or take a look at the 200 hospital benchmarks Becker’s Hospital Review has compiled.

Effective benchmarking is a critical step in the strategic planning process. When your benchmarks are established and your goals are set, the next big challenge you will face is how to successfully execute against them. This is where we can help.

The AchieveIt Execution Management Platform is a cloud-based tool that enables you to effectively manage your goals, track progress, and quickly report results up the chain.  When you are ready to spend less time chasing down stakeholders for updates and preparing reports for the administrators, we’ll be happy to help. #GoAchieveit


Meet the Author  Joseph Krause

Joe is a co-founder of AchieveIt over the past 9 years he's helped our clients execute thousands of strategic, operational, and project plans. Joe is passionate about helping teams drive toward successful business outcomes with a focus on practical, easy to use advice. Joe graduated from Seton Hall University with a Bachelor of Arts in political science and obtained a Masters of Science in Healthcare Communication from Boston University. Joe recently completed his studies at Rutgers University where he obtained a Masters in Business Administration with a concentration in finance.

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