Essential questions you should ask about your benchmarking and performance management tool

Can you remember the last time you evaluated your hospital's benchmarking tool?

Many hospitals and health systems use the same performance management tool for a very long time, trusting that its capabilities adequately meet their organizational needs. And that's just what some of the biggest hospital benchmarking vendors want you to believe, that the size of their database and their longevity in the market cements their value.

With mounting evidence indicating that significant and sustained performance improvement is required within the healthcare industry, how confident are you in your benchmarking tool's capabilities? Are you sure your current tool generates valid, up-to-date results and—delivers what your organization needs? If not, it may be time for you to look for a new performance improvement tool.

These four questions will help you evaluate your current benchmarking tool. Your answers will help you identify if your performance management initiative is driven by the quality, detail and engagement of your organization with the data necessary to be competitive and financially sound.

1. Are you confident that your data is accurately mapped and validated in your current tool?
If you're not sure, you're probably dealing with a black box and you should get the answers to these questions: What's the methodology used to map data? Can the process be conducted collaboratively to ensure higher accuracy?

Your vendor should do all the coding and map each cost center and expense account to tightly defined functional categories. That's how the tools normalize for differences in general ledgers and payroll systems. These tightly defined categories also help avoid misinterpretation of the category. And above all, the process should be transparent and collaborative.

Consider this example: In biomedical engineering, hospitals can make very different decisions on how they account for the expenses from clinical repairs, parts, service contracts, and labor. To get a consistent comparison, your vendor should have a completely transparent cross-mapping process that allows you to see every cost center and expense account that has been included in each function. To support cross-mapping, your vendor must:

• create a functional category for biomedical engineering
• create a code for each of the above expenses, clinical repairs, etc.
• ensure that the same code is used for each clinically-related cost center and aggregated to the Biomedical Engineering functional category

That organization allows for a comparison to the total biomedical device count.

2. Are you able to achieve staff buy-in, data acceptance and engagement? Or do you often hear hospital administrators and stakeholders say, "this data isn't right," or "I don't trust the data"?
Data denial can be a significant hurdle. Having accurate data and clearly communicating the importance of mapping and validation helps create engagement and build the confidence required to drive performance improvement. You can learn more about dealing with data deniers in this blog post.

3. Can you easily and consistently navigate between clinical and operational data in the tool? Can you easily follow the connections between cost, productivity, utilization, and quality?
When you see a functional cost variance, you should be able to seamlessly drill down to a:

• DRG cost variance
• clinician's clinical practice variance
• case-level detail

For example, you should be able to identify any variance within a clinical function, such as Nursing or Ancillaries, and then be able to click on that function for a detailed comparative analysis.

Within that comparative analysis, you should then be able to drill down to:

DRGs that show clinical variance. For instance, you should see the internal variation by physician for each subcomponent of your clinical cost structure.
Procedure codes to see if any of your facility's procedures differ from your peers, or when your procedures differ within your own physician groups.

4. Do you have immediate access to a community of experienced peers who help you determine the best way to tackle improvements?
If you and your team spend a lot of time trying to come up with solutions or making cold calls to other hospitals to see how they've addressed similar challenges—your answer is no.

Within your benchmarking and performance management tool, you should be able to easily search for ideas, insights, and lessons learned—and have the ability to collaborate with others online.

If your answers to any of these questions cause you concern, then you may well need to reevaluate your current solution. Your answers are a signal that your benchmarking and performance management tool isn't meeting the benchmark. In today's challenging environment, with its pressures to reduce costs and improve performance, you need a tool that truly delivers the data that will drive engagement and performance. When you can imagine echoing the quote below, then you'll know you have the right solution for your performance improvement needs:

"Benchmarking and performance improvement have become part of our day-in and day-out mindset. We see comparative analytics as an integral part of our culture. Possessing this type of data gives department managers a new sense of ownership—now they manage their departments like their own money is on the line."

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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