Healthcare Benchmarking – Part 1 of 2

I am an avid sports junkie. I literally wake up and fall asleep watching SportsCenter. Last month, while watching the NBA Finals (Go Spurs!), I concluded that sports and healthcare have a lot in common. Sport, is a “physical activity that is governed by a set of rules or customs and often engaged in competitively¹.” If we simply swap out the words physical activity for medical practice(s) in the aforementioned definition, we would be describing today’s healthcare organization, no?

For me, the parallel of the two industries really lies in their competitive nature-seeking to be the best. The whole premise of sports is to encourage competition, to be the world’s best player, team, or country. Similarly, the healthcare industry encourages competition by seeking the best physician, practice, health system, equipment, outcomes, cost and efficiencies. However, you cannot be the best unless you know what “best” means. What is the threshold you are comparing yourself to in order to be called the best? What are the weaknesses that are holding you back from being the best? What is the benchmark for best?

In sports it is a little easier to identify. For example, after six titles, five Most Valuable Player awards and 10 scoring titles, Michael Jordan is considered to be the best player of all time. He is the benchmark of greatness in the sport of basketball-he is what all other players aspire to be and what they evaluate themselves against. Unfortunately, in healthcare it is not as easy, as these types of statistics are not as readily available. However, in recent years, in an effort to help define and understand “best”, more and more healthcare organizations are finding value in benchmarking as a tool to assess their current thresholds and a way to improve their process and overall performance in an attempt to be the best.

In this blog post, you will be provided a general overview of benchmarking. In the next blog post we will take a closer look at the actual process of benchmarking.

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What is Benchmarking?
Benchmarking has become a dynamic performance tool in the healthcare industry whose main goal is to improve performance. American Society of Quality (ASQ) defines benchmarking as “a technique in which a company measures its performance against that of best in class companies, determines how those companies achieved their performance levels and uses the information to improve its own performance². By identifying the finest performers in the industry, healthcare organizations can determine the areas in which their own operations may be lacking and help them determine their best practices-techniques that will deliver optimum performance and results³.

Types of Benchmarking – Advantages and Disadvantages
There are generally four different types of benchmarking. Depending on your organization’s goal(s), each will provide a specific output. Below is a table of the different types of benchmarks highlighting their advantages and disadvantages and a healthcare example to help put things in perspective.

Consortium	Number of Members	Premier Financial Services Members	Leader(s)	Start Date	Focus/Goal
R3CEV	84	DTCC, American Express, Bank of America Merrill Lynch, Wells Fargo, Citigroup, TD Bank, BBVA, Bank of New York Mellon, Northern Trust, HSBC, Barclays	R3, CEV	2014	General-purpose platform and technology to design and deliver advanced distributed ledger technologies to the financial services market.
Digital Asset Holdings	15	Deutsche Borse, J.P. Morgan, DTCC, ABN AMRO, Goldman Sachs, Santander, Citi, IBM	DAH	2014	Capital markets – post-trade settlement. Building distributed, encrypted straight through processing tools to improve efficiency, security, compliance, and settlement speed.
Hyperledger Project	142	J.P. Morgan, Barclays, Deutsche Bank, Wells Fargo, UBS, BBVA, Bank of New York Mellon	Linux Foundation, IBM, Cisco, Intel, SWIFT, DAH	2015	General purpose blockchain. Open source collaborative effort based on IBM’s Fabric codebase, which was created to advance cross-industry blockchain technologies. It is a global collaboration that includes leaders in finance, banking, the internet of things (IoT), supply chain, manufacturing, and technology. The Linux Foundation hosts Hyperledger as a Collaborative Project under the foundation.
Ethereum	116	J.P. Morgan, Santander, BNY Mellon, BBVA, Bank of New York Mellon	Microsoft, Intel	2017	Considering a more distributed approach to self-management rather than the more traditional leadership structure adopted by competing blockchain consortia like R3CEV and Hyperledger. Offers smart contract features that contain a virtual machine, executing peer-to-peer contracts using a cryptocurrency known as Ether.
Ripple	75	UBS, Standard Chartered, Santander, CIBC, Sumitomo Mitsui Banking Corporation (SMBC), MUFG, Mizuho	Google, IDG Capital Partners	2012	Payments. A real-time gross settlement system (RTGS), currency exchange and remittance network by the company of the same name. The Ripple Transaction Protocol (RTXP) or Ripple protocol is built upon a distributed open-source Internet protocol, consensus ledger and native currency called XRP (ripples).
Kinakuta	35	Ethereum Foundation	Microsoft, ConsenSys	2016	Working group dedicated to improving smart contracts security.

Benefits of Benchmarking
If properly executed, benchmarking offers healthcare organizations many benefits. The Joint Commission Resources (JCR) highlights some of the potential benefits of benchmarking⁵:

• Improving the quality of patient care
• Yielding greater efficiency
• Encouraging accountability among providers
• Helping obtain a clearer understanding of competitors
• Serving as a source for new ideas
• Enhancing marketing opportunities
• Improving productivity
• Understanding what levels of performance are possible and how much improvement can be achieved
• Meeting accreditation requirements
• Highlighting the strengths of a department or unit to leadership
• Helping to build the business case for more resources
• Justifying the continuation of a service
• Identifying opportunities for improvement
• Verifying that improvement initiatives are working or conversely, need to be modified or abandoned

Healthcare benchmarking can provide tremendous value to an organization. It can identify gaps, improve performance and bring about a positive return overall…if properly executed. We will tackle the importance and necessary steps in implementing an effective benchmarking effort/project in the next post. Stay tuned, the “best” is yet to come.

Do you think benchmarking is a meaningful tool to improve outcomes? Does your organization use benchmarking?

Want to learn more about benchmarking? Read part two of this post here.

Resources for this blog post:

1. https://dictionary.search.yahoo.com/search;_ylt=A0LEVz9_CLtT4XcAjDpXNyoA;_ylu=X3oDMTB0c3ZndjI3BHNlYwNzYwRjb2xvA2JmMQR2dGlkA1ZJUDQ0Nl8x?p=sport&.sep=
2. http://www.shsu.edu/~mgt_ves/BenchmarkingArticle.pdf
3. http://www.wisegeek.com/what-is-healthcare-benchmarking.htm
4. http://www.transtutors.com/homework-help/industrial-management/benchmarking/types-of-benchmarking.aspx
5. http://books.google.com/books?id=2mQpVORlulEC&printsec=frontcover&source=gbs_ge_summary_r&cad=0#v=onepage&q&f=false