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| Frequently Asked Questions : | |
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Q. What should be the hospital's first consideration when we begin to think about benchmarking? A. The first consideration should be to decide, "What question do we want the benchmarking process to answer?" Q. Why is this important? A. Because hospitals often want benchmarking to tell them how they can (or should) staff their departments. Unfortunately, no matter how carefully the peer group is drawn, external benchmarking alone cannot answer that question directly for a number of reasons, not the least of which is that the numbers are from external sources, not your own hospital. What benchmarking can do is identify the range of observed staffing in departments that are reasonably alike. Determining your relative position within the peer group is the beginning, not the end, of the improvement process. Q. What does "reasonably alike" mean? When we've tried benchmarking in the past, we've always run into "apples to apples" problems. When our department heads talk to managers in the peer group we always find out that the departments we're being compared against differ from ours in significant ways. A. First, it is true that all departments and all hospitals are unique. Pure "apples-to-apples" comparisons are not only impossible, they wouldn't be very helpful as a change tool if you could find them. Peer groups, to be useful, should consist of departments with approximately the same responsibilities and approximately the same workload in hospitals that are generally similar in terms of size, teaching status, setting and case mix. They will differ from one another in how they approach meeting those responsibilities and performing the work. You will find differences in staff mix, scheduling methods, technology choices, supplies used, work processes, physical plant layout, the focus of department managers, and a host of other variables. After all, it is the aggregate effect of those differences that accounts for observed staffing variances among peer group members. That is the value of benchmarking. Q. How often should our benchmarks be updated? A. First, let's make an important distinction between external benchmarks and internal management standards or targets. Performance should be checked against benchmarks at least monthly and against internal management standards each pay period. Although some vendors will be happy to sell you new benchmarks every pay period, there is absolutely no need to obtain a new benchmark with that degree of frequency. "Updating" benchmarks too often is not only a completely unnecessary expense, it is confusing to managers. Benchmarks should be evaluated for currency once or twice a year because the numbers do change over time and, if your department activity volumes change, you may not be using an appropriate benchmark. Q. We want to use benchmarking data to develop department staffing standards. Can we do this? A. It depends upon how you do it. There is nothing wrong with selecting department productivity goals in terms of paid and worked hours per unit of service. Very often significant productivity improvements will occur--often in the range of 10% or so--simply as a result of beginning to pay attention to productivity measures. However, it is usually necessary to make changes both within and outside of the department to achieve more ambitious goals, no matter how badly cost reductions may be needed. What you do not want to do--what should be avoided at all cost--is to arbitrarily mandate budget-driven cuts without first making the changes in staff mix, scheduling methods, technology choices, physical plant layout, etc., that contributed to the staffing variance in the first place. Otherwise, it is almost certain that quality, physician and patient satisfaction, employee relations and community image will be significantly impaired. Q. What are the most important steps leading to a successful benchmarking effort? A. A short list would look something like this:
Q. We need results now. We don't have the time or the budget to launch a massive project that will take years to complete. What can we do? A. Although you can't improve organizational effectiveness until you eliminate performance barriers, benchmarking can be the start of a fast-paced, cost-effective, structured, systematic process to quickly identify the greatest performance limiting factors affecting the hospital. We say "quickly" because the process should not require more than four to six weeks from beginning to end. It should produce immediate action by department heads when issues lie within their span of authority and, when appropriate, a set of specific recommendations for consideration by executive management and governance. Q. What are the keys to successful benchmarking? A. Understanding what the peer group numbers mean--and what managers can do with them--is fundamentally important. No external benchmark can tell us how a particular department should be staffed. Assuming that peer groups are correctly drawn, external data can identify the range of performance for departments with reasonably similar workloads in reasonably similar hospitals. You can then compare yourself against that range of performance and make some judgments. Q. Why is it important to make that comparison? A. There are the obvious financial reasons. Labor costs still amount to about 60% of the typical hospital's operating costs. If your labor costs are significantly higher than the peer group average, it will be very difficult to provide competitively priced services. However, that's not the only reason. Excessive labor costs can serve as a marker to flag quality and other problems. Q. Many department heads are convinced that labor cost cutting always damages quality. You seem to be saying the opposite. How does that work? A. Hospital department managers tend to be "get the job done" type people. Most of them were educated in a technical or professional specialty and most have little formal management training or education. If something is impeding patient care or standing in the way of getting the job done, the most expedient solution is to "staff up" to overpower the problem. However, we know that a lot of things can get in the way of doing the job including not having the right equipment, using bad work processes, rework caused by errors in other departments, etc., etc. The same factors that cause the manager to "staff up" also hurt quality, employee relations and physician and patient satisfaction. That's why a department that has higher than average staffing often has quality, employee relations and "customer" satisfaction issues as well. The benchmarking process will help identify such improvement opportunities. Q. What are some common benchmarking mistakes? A. The most common mistakes during the benchmarking process take place during the peer group selection process. Mistakes of this type result in invalid comparisons and credibility problems in the eyes of managers. For example, some benchmarking efforts use the same group of peer hospitals for all departments, regardless of workload variances within the departments. Others produce reports that are driven more by the software's ability to generate numbers than management utility. It is important that peer groups be selected to answer the right question, which is "what is the range of observed performance in departments with workloads that are reasonably similar to ours?" Q. What are some common mistakes in actually using benchmark comparisons? A. The most common mistake is to pick an arbitrary productivity or staffing target without first determining whether the department is capable of satisfactory performance at the target level. Let's be very clear about this. Sometimes labor costs absolutely must be reduced to meet critical financial goals. However, it is equally necessary to identify and resolve impediments to optimum productivity as part of the cost reduction strategy. If staffing is reduced but existing productivity impediments are not resolved, the overall result of those reductions will be negative and unsustainable. The good news is that hospitals that take the time to identify and resolve performance barriers almost always significantly outperform those that do not, in terms of quality, employee relations, physician and patient satisfaction, and bottom line results. Q. There seems to be a lot confusion about benchmarks. What is a benchmark, really? A. A benchmark is nothing more than a point of reference from which measurements may be made: something that serves as a standard by which others may be measured or judged. Benchmarks don't have any "moral" content. Identifying a benchmark doesn't necessarily mean that you "should" be performing at that level, although an organization may certainly choose to make it a goal to perform at an observed benchmark level. Q. Our department heads want to talk with other managers and learn what they are doing different. Why isn't this helpful? A. There's nothing wrong with it. However, it is unlikely that this approach will be successful because the limits of attainable human productivity in any department are defined by literally hundreds of synergistic factors. They fall into four general categories: factors related to business assumptions and culture; factors related to organization; factors related to resources; and factors related to systems and work processes. Differences in paid and worked hours per unit of service among departments within compare groups are always the result of differences in these factors within hospitals. It is far more useful to identify factors that are impeding performance within your departments and resolve them. Your people know what is working and what is not. The best solutions are apt to be unique to your organization's characteristics. Q. We've tried to use benchmarking to bring about change in the past, but it hasn't been successful. What can we do? A. It is not enough to identify a productivity target and tell department heads to manage to it. While this approach may seem expedient, hospitals that rely on this approach are going to realize only a small fraction of what is potentially available. Significant, lasting performance improvement requires a change in the hospital’s organizational culture and on-going, institution-wide initiatives to optimize performance. It is axiomatic that constructive change cannot be imposed from the top. Constructive change will occur in an organization when (and only when) a positive vision for the future multiplied by dissatisfaction with the status quo (the relationship is not linear) is greater than the natural human resistance to change. The hospital’s culture is defined by the beliefs of its governing body, executives, managers, staff and physicians; the assumptions upon which those beliefs are based (as reinforced by experience); and the behaviors that rest upon those assumptions. Changing that culture requires that people re-evaluate beliefs and assumptions about hospital operations and, when appropriate, modify the behaviors that rest upon those beliefs and assumptions. "We provide the benchmarks you need to manage cost, quality, and change!"
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