Knowledge Expansion

Statistically Speaking: Benchmark Report II

Insight Article

Risk & Compliance

Operations Management

Health Information Technology



"If you don't measure it, you can't manage it.
If you don't value it, you won't change it."

- Robert Kaplan


Kenneth T. Hertz, FACMPE, principal consultant with MGMA, knows how true these words are. And with 25 years of senior-level and executive management experience, he should know. Essentially, if an organization does not measure its performance, both in terms of reviewing past performance and comparing it to similar organizations, it will have a difficult time governing its own operations. Beyond that, if it ignores the importance of these figures and statistics, it will never be able to improve its own performance.

Hertz warns of five common myths, which may hinder an organization's benchmarking efforts, or prevent them from benchmarking to begin with:

  1. Benchmarking is a one-off project. On the contrary, in order to receive the full benefits of benchmarking the process must be ongoing. Otherwise, there is no way to measure changes or improvements, rendering a one-time measurement essentially useless.

  2. Benchmarking won't improve practice performance. Benchmarking helps reveal deficiencies in a practice's performance that would otherwise go unnoticed. By identifying them and bringing them into the spotlight, a practice can implement ways to eliminate the deficiency and improve performance.

  3. Benchmarking is all about the numbers. While the numbers are an integral part of the method, they do not tell the entire story. Plenty of other factors come into play, from geographical location to ownership model to practice size. A small physician-owned practice in Little Rock may wind up with a skewed perspective if they benchmark against a large hospital-owned organization in Los Angeles.

  4. Benchmarking is the end product. Benchmarking is not an end result. Rather, it is the means of measurement for successes and shortcomings, and a blueprint for future plans and goals. Harkening back to myth #1, it is not a one-and-done endeavor. Benchmarking results should not simply be compiled into a report and filed away. They should be placed in the forefront of strategy and operations.

  5. Benchmarks are truth. Don't take benchmarks as gospel without examining the situation fully. For example, just because an organization may have a higher FTE nurse to FTE physician ratio than the benchmark doesn't mean it is in the wrong. It may conduct more procedures, thus validating the higher ratio. According to Hertz, "Benchmarks are a guide only, not an absolute."

Hertz recommends following a certain groundwork when benchmarking. Following this benchmarking cycle can help a practice replicate the process while maintaining a consistent approach. First, the organization must determine which factors are critical to its success. Second, it must identify which metrics can help measure the critical factors. Next, it should find sources for both internal and external benchmarking data. One such resource is MGMA DataDive, an extensive dataset that allows practices to benchmark against a wealth of organizations with a hyper-targeted level of specificity. The practice's performance should then be measured and compared to the benchmark, which will help indicate whether or not action is required. If so, a plan should be put in place. This plan can be formulated by adopting a similar process to that which has been implemented by similar successful organizations. This could include following their compensations practices, staff ratios, etc.

Once this plan has been implemented, objectives should be reassessed, benchmark standards evaluated and measures recalibrated, so the process can be repeated. Benchmarking is an ongoing process that can help an organization fine-tune its operations to achieve maximum effectiveness.

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MGMA Consulting is the industry leader in creating meaningful change in healthcare, one organization at a time, in the areas of Operations, Strategic Planning and Governance, Financial Management, Staffing and Compensation as well as Practice Transformations. Consultants average more than 30 years of diverse and extensive experience in the business of healthcare, have had extensive careers as practice executives, are deeply connected to the business of care delivery and offer solutions customized for each organization. Consultants within MGMA Consulting have access to MGMA DataDive, a rich and robust set of medical practice survey data gathered by MGMA, the nation's largest premier practice management membership organization. 

 
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