Benchmarking In Healthcare: 4 Different Approaches & Its Benefits

It's often helpful to compare your results to similar organizations. Why? So that you can easily identify how to improve, and incorporate lessons from organizations that are doing things well in your strategic plan. There are several different types of benchmarking in the healthcare space, so we want to take some time to describe what solid benchmarking looks like - and the benefits of each different type.

If you're not sure where to start, check out our healthcare KPIs and measures for some inspiration.

4 Types of Healthcare Benchmarking (& The Benefits Of Each)

#1: Internal Benchmarking

Internal benchmarking takes place between departments, divisions, or offices within the same hospital or clinic. This is particularly important because many healthcare organizations have many locations and want to examine a particular set of measures across those locations.

For example, as a hospital administrator, you may want to know whether your southeast clinic or your northeast clinic scores higher for overall patient satisfaction. Monitoring this measure across all branches of the organization may shed light on issues that need to be addressed and help specific branches improve their processes or practices.

Pro tip: Internal benchmarking is often best tracked using a performance management software solution instead of in a measures library or a benchmarking consortium. This way, you can easily keep track of changes on a regular basis and produce monthly or quarterly reports highlighting the results.

#2: Competitive Benchmarking

You’ll likely want to compare your metrics directly to your competitors’ or peers’—which is known as competitive benchmarking.

You’ll want to be certain you examine your metrics against hospitals and clinics serving in the same geographic area to be sure you’re competitive against those in your market. And you’ll also want to look at hospitals and clinics that serve a different market or are in a different geographic location. Because you aren’t competing against these entities, you can use the data to learn from one another and further improve your processes. Sometimes this information is quite easy to find. In Washington, D.C.  for example, you can see each hospital’s wait times.

#3: Functional Benchmarking

Functional benchmarking is used to compare your organization to those in a different industry that may have a similar metric or process you could learn from. Functional comparisons are great for looking at operational data. Things like average collection time, system availability, and average building age all lend themselves to functional comparisons.

For example, at our yearly Performance Management Summit every year, we see performance managers from a wide variety of industries come together and learn about one another’s processes. For instance, this year, a discussion took place that centered around what a healthcare agency in Canada and a municipality in Florida have in common—they both have IT offices that need to track metrics like internal and external systems availability. In discussing this, they determined several things they could each do in order to improve their IT system processes.

#4: Generic Benchmarking

While they’re a bit more abstract than competitive and functional benchmarks, generic benchmarks can be used to look beyond a data set and focus more on general processes. The idea behind generic benchmarks is to introduce new thinking in your healthcare organization. While you might not chart yourself against the benchmark for an actual comparison, you might use the new dataset to drive change in your organization.

For example, a hospital might compare their admission process rates to the check-in process at a hotel chain. 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. If you’re looking to make significant improvements in your admission process, or are interested in any other metric that can be broken down in a more generic way, looking across a variety of companies or industries is helpful.

Anyone who’s taken part in benchmarking knows that it’s critical but not simple. Internally, it’s important to know that no part of your organization is falling behind the rest. Externally, it’s important to understand how those in the market around you are doing. And from a functional or generic perspective, it’s important to look past the similarities in company or industry to see how you could learn from a particular process.

If you're interested in learning more about how you can approach benchmarking in healthcare, get in touch with us. We’re happy to give you a tour of our software.

FAQ:

What is benchmarking in healthcare?

Benchmarking in healthcare is the process of comparing a healthcare organization's performance metrics, practices, and outcomes against similar organizations or industry standards. The goal is to identify areas for improvement and implement best practices.

How is benchmarking used in healthcare?

Healthcare organizations use benchmarking in various ways:

-Quality improvement: Benchmarking helps identify areas where quality of care can be enhanced, such as reducing hospital readmissions, infections, or medication errors.
- Cost reduction: By comparing costs with similar organizations, hospitals can pinpoint opportunities to lower expenses without sacrificing quality.
- Performance enhancement: Benchmarking can highlight areas where efficiency can be improved, like patient wait times or staff productivity.
- Strategic planning: Benchmarking data helps organizations make informed decisions about resource allocation and strategic initiatives.

What are benchmarking tools in healthcare?

Various tools facilitate benchmarking in healthcare:

- Internal data: Organizations collect and analyze their own performance data.
- External databases: Numerous databases offer comparative data on various metrics, like the Hospital Compare website or specialized registries for specific conditions.
- Surveys and interviews: Healthcare organizations can gather information from peers through surveys or interviews.
- Consulting firms: Some firms specialize in providing benchmarking services and expertise.

Why is benchmarking important in healthcare?

Benchmarking plays a crucial role in healthcare for several reasons:

- Improving patient care: It helps identify and adopt best practices, leading to better patient outcomes and experiences.
- Enhancing efficiency: It helps organizations identify and eliminate inefficiencies, leading to cost savings and improved resource allocation.
- Promoting transparency: Benchmarking data can be shared publicly, fostering transparency and accountability in the healthcare industry.
- Driving innovation: By comparing themselves to top performers, organizations are encouraged to innovate and adopt new approaches.

What are the 4 types of benchmarking in healthcare?

There are four primary types of benchmarking in healthcare:

- Internal benchmarking: Comparing performance across different departments or units within the same organization.
- Competitive benchmarking: Comparing performance against direct competitors or similar organizations in the same market.
- Functional benchmarking: Comparing specific processes or functions (e.g., billing, patient discharge) with organizations in different industries known for excellence in those areas.
- Generic benchmarking: Comparing performance against general industry standards or best practices, regardless of industry or function.