Benchmarking is more than managers realize
By Stephen W. Earnhart, MS
President and CEO
Earnhart & Associates
Dallas
I’m a firm believer in "benchmarking" the costs, services, patient satisfaction, etc., in our facilities. We need to realize that there is more to benchmarking than knowing that the average supply cost is $200 per case for most ambulatory surgery cases. While having that information is great and will go a long way in helping control or identify opportunity, clearly, information is missing.
For example, what if your surgery center does a significant number of gastrointestinal or urology cases? If you compare yourself to the $200 cost, you could be falsely satisfied that your supply cost per case is acceptable. Using this example, you would expect the $200 cost to be significantly lower, perhaps as much as $75 per case. Conversely, what if you are performing many high-end cases such as anterior cruciate ligament repairs or laparoscopic cholecystecomy? Chances are your supply cost will be significantly higher.
Using $200 as a benchmark, are you outside the envelope in supply costs? Maybe not, but how can you be sure? One parameter does not a benchmark make. Try to describe a pencil to someone who has never seen one. It is not enough to say, "It is long." How long? How wide? What is it made of? What is its function? Clearly one parameter won’t cut it. You need more information before you can truly "benchmark."
This may be the time that you throw your hands in the air and say "enough is enough!" Many of us have had it with analysis of cost and reimbursement. But hold on. Benchmarking is actually fun, and you can get immediate results! You also can involve people at your facility that "don’t really do anything but you cannot fire them" to do most of the data collection.
Why is benchmarking fun? Because now you can, with irrefutable proof, go to your physicians or manager and point to the charts and graphs and say, "See, I told you we were (pick one): doing great, about to go under, the most expensive, the least expensive, the best, the worst."
Or you can take the information, clear your throat, and say, "Yes, very good, thank you. I need to study this before I comment on it." (Get rid of any witnesses, and keep it quiet.)
Benchmarks you want to study include more than supply cost. You want to monitor your personnel costs as well. How many personnel do you have on an arthroscopy of the knee? Do you use RN first assistants? Who pays for them? How many items do you have in your packets? What is the cost of them? Do you use critical pathways? What is your pre-incision time? Post-incision time? The list goes on and on.
These are just some of benchmarks you need to audit. Probably one of the best results of the benchmark will be how you compare with your peers and competition. Seek out that information through networking and other opportunities.
The bottom line is you’re probably not doing yourself justice if you narrow your benchmarks to just a few parameters. Be the leader in developing new benchmarking in areas such as average patient waiting time, average days in accounts receivable, and other areas.
Benchmarking for the sake of benchmarking doesn’t make much sense if you don’t use it constructively. We all know that most of us use the information to validate staffing levels, contractual pricing with purchasing agents, bonuses, etc. Share the information with your medical staff, personnel, in your newsletter, or on your Web site to tout your accomplishments. You have worked hard to get the recognition. Now take advantage of it!
How often should you benchmark? I recommend it be done on a rotating but continuous schedule. It doesn’t make much sense to check your supply cost each month, but you might want to check your turnaround time one quarter, your start time the next, etc. The Earnhart Survey Group, in our October 1999 survey, reported that the majority of facilities "benchmark" once a year, and slightly less than that number do it on a six-month basis. How often do you?
(Editor’s note: Earnhart and Associates is an ambulatory surgery consulting firm specializing in all aspects of surgery center development and management. Earnhart can be reached at 5905 Tree Shadow Place, Suite 1200, Dallas, TX 75252. E-mail: surgery @onramp.net. Web: www.earnhart.com.)
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content