Benchmarking isn’t a tough concept to understand. It’s essentially taking a look at how your practice compares to others. Where do you get the data on your own practice? Where can you find benchmarking standards to measure against? Then what do you do with all that data to make a difference?
Finding the answers to those questions comes down to looking at your data, analyzing it and then comparing it against a recognized benchmark to see if you are above or below the average.
Benchmarking allows practices to evaluate their performance and understand their strengths and weaknesses. It can help identify areas for improving operations and the bottom line. It can help you see where your practice has been and predict where it is going. And it can help convince physicians and staff of the need for change.
Here are some tips to get started:
1. Determine your key performance indicators: KPIs should reflect your organization’s goals. Your choice of indicators can change as your goals change. The indicators must be quantifiable or measurable and your definitions and measurement must be constant. Two indicators that matter most to many practices are collections and revenue and patient experience.
Ask these questions: Is your goal to improve patient satisfaction scores when it comes to wait times? Is it to improve your collection rate? Is it to cut your no-show rate?
2. Choose just a few key indicators: A narrow focus is critical to your success. If you want to focus on financials, a medical practice’s profitability is a function of productivity, the ability to collect payment and the ability to manage expenses. Just a handful of key indicators allow a practice to assess the revenue cycle of recording, billing and collecting for services; cost efficiency and the bottom line.
So, if looking at your revenue cycle, for example, you might choose to measure total accounts receivable for each full-time physician in your practice. That provides the volume of accounts receivable that you need to collect. Or looking at accounts receivable over 120 days describes how much of that is old and more difficult to collect.
3. Assess what data you have available on your own practice: Remember the adage: If you don’t measure it, you can’t change it. If you don’t value it, you won’t change it either. Your electronic health record, your practice management system and billing software are likely good sources of data that you can extract into a spreadsheet. Benchmarking helped him gain a better understanding of his large independent urology practice.
4. Find sources of benchmarking standards: Professional organizations are good sources for data to allow you to compare your practice to others. And don’t limit yourself to the healthcare industry. For example, if you want to benchmark your practice in terms of customer service, you might want to compare to Disney, which is a leader in creating happy visitors.
But be careful about comparing apples to oranges. If you are a small, independent practice your data may look very different from a hospital-owned practice with dozens of physicians. Try and compare with organizations as similar to your own as possible. Once you have your data and standards from the industry, you can interpret that information.
5. Use your data to support decision-making in your organization: Data takes the emotion out of the debate. For example, if you are considering buying a new CT-scanner, is it better to buy or lease the machine? Or perhaps not buy it at all? A business case analysis can help you make the right decision whether it’s to buy new equipment or implement a new customer service program.