How to Develop Your Hospital Benchmarking Plan

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Updated August 2020

Understanding and prioritizing areas of improvement can be difficult for hospitals and care facilities. There are financial, clinical, and quality metrics to consider—as well as competing facilities with overlapping patient populations. Once hospital leaders decide on which measures to track, the sheer quantity of data can be overwhelming, making it difficult to create an effective plan of action.

What is hospital benchmarking?

Benchmarking refers specifically to analyzing a facility’s performance and contrasting that data with a common standard, like those set by the Centers for Medicare and Medicaid Services (CMS) and other regulatory agencies. Effective benchmarking can also serve as a marketing tool for high-performing care facilities. This allows administrators to tout their status as the hospital with the lowest readmission rates, shortest wait times, highest patient satisfaction scores, and more.

Despite the difficulties surrounding data collection and utilization, hospital benchmarking is vital for ensuring optimal performance and cost savings.

Below, we’ve compiled the information you need when implementing a hospital benchmarking plan.

Strategic hospital benchmarking

Hospital benchmarking can empower network and facility leaders to better understand their place among competitors and the larger healthcare market. In collecting and comparing data across comparable facilities, providers have the opportunity to improve patient access, care outcomes, and financial performance.

In a 2018 survey from Health Catalyst, 36 percent of respondents said integrating benchmarks into existing analytics would make it easier to collect and evaluate data. Additionally, 18 percent reported that easier access to benchmarking tools and consequent results would improve the usefulness of those benchmarks. This could open a door for IT developers to offer an application for electronic health record (EHR) systems that can streamline the data collection and utilization process for providers.

What are the four types of benchmarking in healthcare?

1. Internal benchmarking

Internal benchmarking is primarily useful for maintaining quality standards across multiple facilities within the same integrated delivery network (IDN). Hospital and care facility administrators can monitor performance in various departments to ensure patients have access to consistent care at each location.

Examples of internal benchmarking

Some of the most common performance metrics facility leaders track include patient satisfaction scores, 30-day readmissions, and rates of hospital-acquired conditions.

2. Competitive benchmarking

Competitive benchmarking is essentially what it sounds like — comparing your own facility or network performance with others. You can contrast your own benchmarks with facilities in your region, of similar size, or serving comparable patient populations.

Examples of competitive benchmarking

This method is a way to learn from other facilities and improve your own workflows. The most effective way to understand the competitive landscape is to access performance data on similar facilities. Data can be analyzed based on hospital size, population demographics, or CBSA region.

3. Functional benchmarking

Functional benchmarking allows you to look outside your own industry to incorporate effective strategies that might be new to your specialty or to healthcare in general. This includes operational data such as building age, financial collections, IT systems and security, and more.

Examples of functional benchmarking

For areas like IT, functional comparisons can be particularly helpful. Because healthcare providers interact with sensitive data, care facilities must be more vigilant than organizations outside the healthcare market. By analyzing the data security measures of entities in other industries, healthcare IT leaders can implement the most effective strategies to reduce instances of hacking and data leakage.

4. Generic Benchmarking

Unlike the three prior benchmarking strategies, the sole purpose of generic benchmarking is to introduce out-of-the-box thinking. Similar to functional benchmarking, generic benchmarking compares healthcare workflows and processes to comparable procedures in other industries.

Examples of generic benchmarking

One example could be how providers collect patient feedback. Survey responses are often incentivized to encourage participation and are delivered via email or patient portals rather than sent in hard copy through the mail.

Tracking hospital performance after COVID-19

Hospital benchmarking will reveal stark differences in performance and priorities in the wake of the COVID-19 pandemic. Competitive benchmarking in particular can help hospital and facility leaders understand how similar providers are addressing population health and treating patients, from drive-through testing to implementing telemedicine.

Internal benchmarking can also empower healthcare leaders to see where their performance has shifted most—whether that means higher readmission rates or lower patient communication scores. In all likelihood, illness severity and comorbidity volumes will rise due to the postponement of essential healthcare.

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