Having been in the healthcare industry working in some aspects of performance improvement, performance measurement and process design for two decades, we have seen significant advances in the application of benchmarking. That being said, our team of staffing and productivity consultants often still have to help clients get past the fact that comparative data benchmarking is not an exact science. We ultimately find ourselves repeating multiple times during our work that “Benchmarks are Directional.”
This image below is one we frequently use to lay the context of how benchmarks are the “tip of the operational iceberg”.
Our team spends ample time (equal to or more than most firms, in our experience) with data normalization – the process by which staff hours and salary dollars are reallocated to better match a benchmark standard. What we really want to do is move as quickly as possible to the part of the process in which the data-related findings are augmented with the observations and interviews conducted by subject-matter experts. This combination of data and domain expertise yields insights that result in higher levels of buy-in to performance improvement ideas and the resulting gains in staffing efficiency.
Here is an example of the insights that can result from the operational review and drilldown. This example comes from a house-wide productivity review for a multi-hospital system and shows Laboratory Services at the largest hospital site. The findings have been scrubbed so as to not provide proprietary client information.
The above table is a great example about benchmarking being directional. When the team initially analyzed the data for the laboratory at the benchmarking layer, the variance was 3.0 FTEs greater than the benchmark percentile selected. Our subject-matter expert conducted interviews and completed observations on multiple shifts to gain a first-hand perspective of the overall operation of the laboratory. We discovered that the initial variance calculated was not feasible without significant changes and that a more appropriate target was in order. After analyzing the operational factors, the subject-matter expert determined that the laboratory could potentially gain efficiencies by 1.0 FTEs if our process improvement recommendations were implemented.
Here is another example, this time from perioperative services. This example also shows how the operational review and drilldown can influence productivity targets initially based on benchmarks.
The above hospital’s perioperative service line benchmarks initially indicated a high variance that warranted more detailed review. We analyzed additional data for staffing to demand analysis by hour of day and day of week, which is shown in this chart.
We also analyzed how the benchmarks and actual staffing compared to AORN guidelines. The perioperative subject-matter expert worked with our productivity analytical team and identified operational inefficiencies as well as staffing mix inefficiencies. In this case, the additional insights gained from the operational drilldown identified greater opportunities for staffing efficiency than the initial benchmark variance suggested.
This particular example and the greater learning around it led to the creation of a benchmarking tool that helps bridge the gap between industry guidelines and productivity benchmarks – for instance, staffing based on AORN guidelines as compared to staffing based on productivity benchmarks. It also led to a presentation that a colleague and I recently gave at the OR Business Management Conference. If you missed seeing us there, you can watch the recorded version of the webinar and download the benchmarking tool by clicking here.
Not every department leader will require this level of review to buy into their benchmark-based (or more precisely, benchmark-influenced) target. However, many managers – for example, those facing major process changes to reach those targets and managers of departments where staffing changes have significant intra-departmental impact, such as nursing units – will benefit greatly from knowing what is beneath the surface of the benchmarks.
So again – benchmarks really are directional and in our opinion they generally should not be used alone to set targets.
By David Murdock, Managing Director, and Rhonda Hodoh, Consultant, Novia Strategies