Why Healthcare Providers Need Performance Benchmarking

A benchmark is a measurement that sets the standard for judging performance. In health care a benchmark helps to determine whether a level of quality is meeting, exceeding or falling short.

Benchmarks are increasingly vital for healthcare providers across the spectrum of care as payers continue to emphasize value-based purchasing and standards of quality in their pay for performance schemes.


The biggest single payer, Medicare, has its hospital Value Based Purchasing program with dollar incentives for performance above the benchmarks and dollar disincentives for performance below. On top of this program is the hospital Readmission Reduction penalty with up to 3 percent deducted from total hospital Medicare payments for hospitals that do not meet the readmission benchmarks. These penalties can easily add up to millions of lost dollars. Anthem, United, Aetna and Cigna all have similar quality measurement programs with money tied to them.


How can providers remain on top of these developments? The Medicare and commercial payer quality programs publish provider actual and benchmark results.  Medicare even has a website, www.medicare.gov/hospitalcompare/search.html, that lets you look up actual results and the benchmarks for each hospital in the country.  But these are published years after the care is provided.  Even commercial payers lag in reporting actual results.  As a provider needing to meet these benchmarks to get paid, you need current data and information on how you are doing so you can act on it and improve toward meeting payer expectations before they report your actual results.  Otherwise, it is like practicing medicine while looking in a rearview mirror.


Moreover, managed care companies want to know whether you care about what your outcomes are. How many providers have lost a contract because they cannot report even basic quality results comparing themselves to benchmarks?


The best measures are service line specific or procedure-specific and the benchmarking should be apples to apples. Data measurements should be standardized and comparable to provide confidence in the data.




Here are eight classes of benchmark indicators providers should monitor to benefit their practices.


1. Outcomes benchmarks. In surgery and pain management, outcomes are benchmarked based on the patient-reported pain levels before and after an intervention. Hospitals and procedure centers can benchmark:


  • Perioperative pain
  • Percent of patients reporting worse pain immediately after the procedure
  • Post-discharge pain
  • Percent of patients reporting worse pain after returning home
  • Improved pain scores
  • Increased functionality


For some patients, the treatment can provide short term relief but not long-term relief; other patients experience long term relief but are still in pain immediately after the treatment. There are numerous pain measurement scales, ranging from the less complicated to the more complicated, but the important thing is to have a patient-centered measurement scale, so you are able to compare your results to others.


New Health Analytics maintains a huge database of post-surgical outcomes. Analysis of the database shows that 12 percent of patients report worse pain immediately after a cervical procedure while around 8 percent of patients report worse pain immediately after lumbosacral procedures. The incidence of pain after returning home are similar between the two.


Providers need benchmarks like these to show managed care companies you are good and get favorable results for your patients. If you are better than the benchmark, you can take a tougher negotiating stance with the managed care company. Too often, providers assert they are excellent, but they really stop the managed care negotiator in their tracks when the provider can measure and demonstrate their excellence.


2. Procedure benchmarks. Keeping track of procedure benchmarks is useful to understand the efficiency of your physicians and whether you are receiving the appropriate reimbursement for your work.  Hospital outpatient facilities and ambulatory care centers can benchmark:


  • Procedure time
  • Recovery time
  • Length of stay
  • Medicare/private payor reimbursement
  • Facility fee
  • Non-facility fee


It is an old saying, but it is true.  If you do not measure it, you cannot manage it.  These sorts of indicators can help lower costs and monitor reimbursements.  Found money. 


3. Patient satisfaction benchmarks. Tracking patient satisfaction is essential for all practices, but especially because the ultimate goal is not to conduct a patient visit, but to improve a patient's function, mobility and, ultimately, quality of life. To many people, patient feedback is probably the most important outcome measure you can use in clinical practice.  A happy patient is one that is likely to return.


After a hospital discharge or ambulatory procedure, you can monitor symptoms such as nausea, vomiting, fever, difficulty urinating, bleeding and signs of infection. Hospitals are increasingly contacting patients with a follow-up phone call at the patient’s home. It is easy to turn that call into a quick survey to collect complications data and other patient satisfaction.


When asking about patient satisfaction, it is best to keep the questions short and focused.  Great questions to ask about patient satisfaction include:


  • Overall quality
  • Registration and admission
  • Pre-op care
  • Preadmission testing
  • Recovery


It is useful to break it down by hospital service line, DRG, or procedure in the ambulatory setting so you can see which processes the weakest and which ones are relatively the strongest. This sort of breakdown is not something CMS does with its patient satisfaction surveys.


4. Physician satisfaction. It is also important to measure physician satisfaction, so you can see where your practice is excelling and where you may need improvement. Questions can cover:


  • Scheduling
  • Efficiency of the practice
  • Patient satisfaction from the physician's point of view
  • Anesthesia services
  • Skills of the personnel
  • General appearance of the facility
  • Overall rating


Physician satisfaction surveys can be done online (or through paper surveys) asking a series of questions about their experience at the hospital or the procedure center.


5. Staff satisfaction. You will not have happy patients unless you have happy staff.  Maintaining employees for as long as possible is important because hiring a new staff member is a drain on practice resources. Maintaining a low employee turnover depends on having a high employee satisfaction. Employee satisfaction can be tracked in the following areas:


  • Work and home life
  • Management and communications
  • Work and learning environment
  • Fairness and effectiveness
  • Quality of job design
  • Work pressure
  • Overall job satisfaction
  • Staff exposure to patient safety issues


The benchmarking data uncovers opportunities for improvement which leads to development of action plans to address those deficiencies.


6. Practice management benchmarks. Patient outcomes are the number one priority for many pain physicians, but maintaining practice management norms is a close second. It's important to understand how your practice measures against other practices nationwide to determine whether potential changes to office management are necessary. Basic benchmarking indicators include:


  • Patient volume—number of patients seen per month
  • Total number of patients seen annually
  • Number of days spent doing procedures
  • Number of days spent seeing patients in the clinical office
  • Amount of procedures referred to the facility
  • Volume of procedures performed annually


These management benchmarks help do several things. First, they help project financial performance over the next one to two months. Second, they can be a leading indicator of any problems headed your way. If you see the number of new patients drop off, you could be struggling with cash flow a month or two down the road, for example.


7. Financial benchmarks. Comparing providers to others in your area using financial benchmarks can allow you to make sure you are not getting outside industry standards financially. Straightforward financial benchmarks include:


  • cost per case
  • collection rates
  • personnel expenses
  • profitability per case


The profitability of each case is determined by dividing the reimbursement per treatment to the amount of time the case takes to perform (per hour). If you do that, you'll see that cervical cases actually generate more payment than lumbar cases, for example.


8. Patient drug test benchmarks. One of the biggest issues in medicine today is controlling narcotic use and correcting divergence. Physicians can use benchmarks in this area to understand how their patients and practice fit into the local and national spectrum of drug test results. Taping into the electronic medical record or the hospital laboratory information system can give some important measurements:


  • Averages for results such as no abnormality detected
  • Illicit substances found
  • Unprescribed medication found
  • Prescribed drug not found
  • Drug above expected range
  • Drug under expected range


A report from Quest Diagnostics finds 55-63 percent of patient test results were inconsistent, meaning many patients are misusing prescription drugs and putting their health at risk. Isn’t this good for any practitioner to know about their patients and to protect themselves from overprescribing.