Benchmarking is a tremendously effective exercise that establishes a baseline for how well an organization is performing in comparison with their competition. Where there are a number of similar operations or functions, a benchmark helps to identify those that are most efficient, and conversely, to recognize which ones can improve. Measures such as costs per patient day (PPD) are useful in this regard, although to obtain a better understanding, other measures such as inventory cost and facility spend should also be evaluated. Once a benchmark has been established, then it's a relatively simple task to monitor performance against that benchmark.The Ins And Outs Of Benchmarking
The fundamental purpose of benchmarking is to be able to compare your performance with that of similar organizations or functions. This may mean other hospice providers in the area, similar organizations within your group or even on a departmental basis. While it may be somewhat difficult to obtain comparisons with hospice programs managed by other organizations, there are still many opportunities for creating helpful benchmarking functions.
The methods adopted may vary, but the key principles of benchmarking entails:
- Measurement of performance
- Identification of those practices that yield the best results
- Adopting a process of continuous improvement.
A critical success factor is that the parameters chosen are representative of what is being compared and that the same method of measurement is being used.
What Needs Monitoring?
Because it is essential that benchmarking comparisons are a realistic indicator of performance, the parameters selected should be those that reflect the overall performance of the hospice provider. Here are some benchmarking ideas:
- PPD: In Hospice care, the cost per patient day is perhaps the single most important measure, especially if it takes into account all factors contributing toward patient cost, including labor, materials and other costs. Naturally PPD will vary depending upon the ratios of patients requiring a high level of care and those who don't.
- Organization spend per patient: This compares the performance of one hospice with another, and ideally takes into account fixed and variable costs.
- Inventory spend per patient: This is subtly different from PPD because it only measures the cost of medical and other supplies, but is still an important measure and is important for inventory control.
It's suggested that the number of key parameters chosen should be between three and six provided that, taken together, these are considered to be a good indicator of overall performance. By keeping the number of parameters to a manageable number, it's easier to gauge overall performance and develop effective action plans.
Concordance Healthcare Solutions is a specialist in the field of healthcare distribution. As a medical supply distributor, we understand the importance of effective control and offer a suite of software solutions that allow you to take control of hospice costs.
Our BeCompliantTM program allows you to manage your inventory, track purchases and monitor costs with standard features that include costs PPD, deviated from formulary notification, budgeting and purchase tracking. Additionally, customized reporting allows you to track important parameters and because of its standardized approach, BeCompliantTM is an ideal tool for benchmarking your hospice organization allowing you to use that information to drive improvement and reduce costs.