Benchmarking

Background

Benchmarking originated in industries outside of healthcare to improve product quality, service, delivery, and practices. Benchmarking has its historical roots in kaizen, or the Japanese philosophy of continuous improvement and competitive advantage. This technique can enable industries to achieve superior performance and practices by investigating and comparing their practices and outcomes with those of similar organizations. Benchmarking provides the opportunity to identify best practices for an industry and promotes the adoption of universal standards that the organization and industry strive toward. A central part of benchmarking are the performance measures that establish the benchmark and the benchmark partners, which can be allies or competitor organizations against which comparisons are made. The core components of the benchmarking process include understanding one's own organizational performance, analyzing the performance and outcomes of competitors or sister organizations with superior performance, and implementing the practices that improve performance and outcomes. Benchmarking can instruct an organization about what can be achieved and how superior results can be attained.

Benchmarking can be useful for healthcare organizations to determine their core competencies and how they compare against their competitors. It can also be used to identify top performers relative to selected outcomes or care processes, determine where an organization is in relationship to those outcomes, and position it to understand how to improve its own care processes through identification and implementation of best practices to achieve better outcomes. Through the use of benchmarking, healthcare organizations can also gain a better understanding of their business performance, including its strengths and weaknesses. This process allows an organization to develop strategies that facilitate better management and performance improvement on a continual basis. Benchmarking can be used as a management tool to overcome paradigm blindness, or thinking that the way processes are currently done is the best. [Page 96]Additionally, it can also lead to improved organizational effectiveness.

The concept of benchmarking has grown in healthcare since costs have been escalating and payers have been demanding that healthcare organizations deliver the highest quality of care for their money. In addition, the widespread use of performance measures by accrediting bodies such as the Joint Commission, the National Committee for Quality Assurance (NCQA), and governmental agencies including the Centers for Medicare and Medicaid Services (CMS) to monitor healthcare organization performance has allowed benchmarking to become more prevalent by allowing individual organizations to compare their performance and outcomes with similar organizations. This permits an organization to develop innovative strategies and techniques that will enable it to improve its performance. Benchmarking has become essential for healthcare organizations to survive in a competitive marketplace where performance and outcomes are measured. Thus, benchmarking allows organizations to learn from their competitors or sister organizations how to address similar issues that they are confronting.

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