The Best and Worst Ways to Use Benchmarks

With a sharpened focus on efficiency, quality of care and lower cost, hospital benchmarking is gaining momentum and becoming an effective measurement tool. Becker's Hospital Review recently published 40 Hospital Benchmarks on hospital operations, finances, quality and patient satisfaction. Once your hospital has seen the benchmarks and knows the averages, what's the next step?

Shawna O'Neill, RN, MHA, and Eric Dam, MHA, are co-authors of the study, "Using Benchmarks: The Good, The Bad and The Ugly." Ms. O'Neill and Mr. Dam explain how a hospital should successfully implement benchmarks to avoid resentment and embrace a culture of productivity.

Q: The report recommends using benchmarks as guidelines, not mandates. Can you distinguish how this may be done? What are the effects of mandating hospital staff meet benchmarks?

Shawna O'Neill: When used as guidelines, benchmarks are considered tools and are more likely to be accepted. When they're mandated, whether they are presented as benchmarks or budget cuts, they generate resistance. They are more likely to be viewed as impositions. If people view benchmarks as threats, resistance may take the form of increased backlogs or overtime — tactics designed to demonstrate the department is understaffed.

Eric Dam: An example of using a benchmark as a mandate would be, "Everybody needs to reduce five FTEs or every department must be at the 50th percentile." An example of using it as a guideline would be, "What would you have to change in your department to achieve a 5 percent increase in productivity?" That's more of a guideline.

Q: Rules without reasons breed resentment, as any parent of teenagers knows. How can hospitals avoid this problem with benchmark implementation and help staff members understand the importance of meeting these goals?

SO: Demonstrate that the benchmarks are reasonable. To encourage departments to adopt productivity benchmarks, you have to understand each department's reality. We interview each department manager and understand the operational realities of each department. Our recommended benchmarks tend to be accepted because the manager can see the reasoning behind the recommendations.

ED: We also emphasize process change to meet those benchmarks, not simple slash and burn tactics such as layoffs. If a hospital doesn't change the process in the department, it will result in quality and satisfaction issues in addition to change that cannot be sustained. We focus on using attrition, realignment and reassignment of employees.  

Q: Let's say a hospital is beginning to work off of new benchmarks. Should they break them down into a series of smaller, doable goals to make it less overwhelming? Or should they just establish the new guideline as-is from the start?

SO: I think so many times it becomes overwhelming to accomplish a big, giant undertaking. If you're trying to increase ED throughput, well, there are so many components to that. You need to put timeframes around these goals. Plan the changes and establish priorities.  Analyze all the components of an ED visit, take one and start fixing that first. Separately measure the duration of arrival to triage, triage to registration, registration to room, room to doctor and doctor to discharge.

ED: If these changes aren't made incrementally, it will damage hospital quality and patient satisfaction. Another thing we see happen a lot is when hospitals look at national benchmark ranges, and they have a goal for everybody to fall in at least midrange. Some departments may fall in the high-end, and they're expected to jump into mid-range. Well, that's nearly impossible. Incrementally, departments can slowly grow closer to that benchmark by making meaningful process changes.

Q: What are the drawbacks of hospitals comparing themselves to the "national average?"

SO: Hospitals need to compare apples to apples when looking at averages. Comparison to national average benchmarks can be helpful to those that are truly average in terms of bed size, adjusted case mix, ED and OR volume, outpatient-inpatient mix and scope of service. But national averages will be less relevant to hospitals that significantly depart from the average of these key variables. Even individual departments vary. Some radiology departments include transporters, schedulers and transcriptionists while, in another radiology department, these functions may be found in other departments.

Q: What other tools/workflow changes should hospitals introduce or implement to help hospitals meet benchmarks?

SO: Among the tools we frequently use when consulting with hospitals on productivity, some are:

• Reforming staffing and scheduling practices, aligning them with productivity targets,
• performing payroll audits,
• updating OR block time scheduling practices and the enforcement of existing policies,
• modifying outpatient scheduling intervals,
• eliminating outmoded pay practices,
• and reducing unnecessary length of stay.

Q: Benchmarks can be broken down into a few different ways. Some are quartiled, some are based on size, others on non-profit/for-profit status. What variables should a hospital consider when looking over benchmarks?

SO: While quartiled productivity benchmarks do have value, it would be inappropriate to expect all departments in a given hospital to meet any given percentile. We were commissioned to recommend productivity targets throughout each hospital in a 25-hospital system. After assuring that labor inputs were standardized throughout the system and workload units were measured in the same way, we recommended different productivity targets unique to each hospital's individual circumstance and operational reality.

Several fundamental factors should be considered when benchmarking:

• Scope of service. Does the hospital have a robust, broad scope of service or is it relatively bare-boned?
• Unit configuration. Is the department configured in the typical way or does it have people or functions not normally associated with its core purpose?
• Intrinsic functionality. Does the department have technological advancements, good information systems, solid managerial experience and leadership and sound scheduling practices? Or is it lacking in some of these attributes?
• Extrinsic functionality. Does the department have the support of other departments or is it left to fend for itself?

Q: Are there any other common problems or examples you can provide of how not to use benchmarks?

SO: Benchmarks have to be relevant. They are less relevant if labor inputs are not appropriately defined, workload units are not appropriately measured, benchmark targets are not fair and reasonable or department managers have not fully bought into the targets.

ED: We once worked with a hospital and discovered they employed twice as many pharmacists we would typically see in hospitals of its size. The director insisted that his department was meeting nationally recognized productivity benchmarks for billed doses. The problem was he was double counting billed doses. This was a very expensive misuse of benchmarks.

Q: Now, to round it out and end on a positive note, if you were to tell a hospital, "You know you've successfully used benchmarks in your hospital when…" What are a few ways to end this sentence?

Managers are recognized and rewarded for meeting productivity benchmarks. When productivity performance in each department is measured and reported to all departments.
When employees at the staff level are engaged in efforts to eliminate waste and streamline processes.

ED: When departments achieve balance with safety, quality and satisfaction benchmarks in addition to productivity benchmarks. When the hospital truly embraces a culture of productivity, and benchmarking is not seen as a "flavor of the month" scheme.

Read "Using Benchmarks: The Good, The Bad and The Ugly."

Read more on hospital and business:

- 6 Tips to Reach the Benchmark for Hospital Staffing & Labor Costs

- Patient-Reported Outcomes: How Collecting and Benchmarking These Data Can Prepare Your Facility for Healthcare Reform, Improve Business

- Reducing Labor Expenses by Benchmarking, Process Improvement: How Frederick Memorial Saved $5.1 Million

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