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How to develop your hospital benchmarking plan


This may seem obvious, but hospitals and healthcare providers are constantly striving to improve the quality of the care and services they offer.

Whether it’s implementing a new practice management system to streamline administrative tasks or adopting new diagnosis and examination techniques to reduce complications, there are a dizzying number of metrics a hospital must consider improving.

Identifying which financial, clinical, and quality metrics to prioritize is a discussion worthy of its own blog series. Fortunately, we’ve got you covered! Check out our blogs “Why hospital quality performance is valuable to you,” and “the top 10 hospital performance metrics you need to know,” to learn more about the standards regulatory agencies use to quantify healthcare operations.

Understanding the value of performance metrics and which ones matter most to your facility are the first two steps in creating a hospital benchmarking plan. In this blog, we’ll cover what hospital benchmarking is and the different types of data collection involved, so you can start developing your own hospital benchmarking plan.

What is hospital benchmarking?

Benchmarking is a critical tool used by leaders at care facilities to compare the performance of one provider against similar organizations. Specifically, it refers 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.

Benchmarking relies on the validity and effectiveness of data—and in doing so, leaders can more easily identify areas of improvement, make more strategic decisions, mitigate risk, and create new plans of action.

The four different types of benchmarking

Different types of benchmarking target different aspects of a healthcare organization’s performance. Four of those types are:

  1. Internal benchmarking
  2. External benchmarking
  3. Functional benchmarking
  4. Generic benchmarking

Internal benchmarking

Internal benchmarking is primarily used 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.

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

External benchmarking

Also known as competitive benchmarking, this methodology calls for the hospital to analyze and compare its performance to that of a similar organization. A hospital can contrast its own benchmarks with facilities in its region, of a similar size, or serving comparable patient populations.

This method is a way for hospital leaders to learn from other facilities and improve their 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.

Our HospitalView product, for example, offers in-depth facility profiles on more than 9,000 active hospitals across the U.S., offering an inside look at how they perform across a variety of metrics.

Functional benchmarking

Functional benchmarking takes the analysis and comparison exercise in external benchmarking one step further. This approach calls for hospital leaders to compare their organization to those of a different industry that may have a similar metric or process.

Making functional comparisons in areas like IT, for example, can be particularly useful. 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.

Generic benchmarking

Like functional benchmarking, this approach requires some out-of-the-box thinking as hospital leaders look at how organizations in other industries are performing and incorporate the strategies that make them effective.

For example, a hospital might find similarities in how a hotel checks in patients to how they admit and process patients. Examining these two processes side by side may seem incomprehensible, but when you boil it down, both focus on getting someone from one point to another. Sometimes, however, there might not be a clear comparison. That’s okay. Ultimately, generic benchmarking is used to introduce new thinking and spark change in an organization.

Learn more

One other added benefit of an effective hospital benchmarking plan is that hospitals can use the outcomes of their efforts as a great marking tool. This allows administrators to tout their status as the hospital with the lowest readmission rates, shortest wait times, highest patient satisfaction scores, and more.

Definitive Healthcare makes it easy to analyze and compare facility performance across any number of hospitals and health systems. There are several dashboards, including the financial strength and clinical quality strength, that lay out the essential healthcare commercial intelligence your facility needs to know to develop more strategic plans. Start a free trial today to see how our data can help your organization grow faster.

Ethan Popowitz

About the Author

Ethan Popowitz

Ethan Popowitz is a Senior Content Writer at Definitive Healthcare. He writes data-driven articles about telehealth, AI, the healthcare staffing shortage, and everything in…

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