ASC Benchmarking - R Bays

Benchmarking for ASC’s

Richard Bays RN, MBA, CPHQ, CLNC

TASCS 2009 Annual Conference

What is Benchmarking?

• Benchmarking is comparing your performance to the performance of

others. It facilitates the understanding of performance and how your

costs compare to similar facilities.

• It relies on measurement, comparison and metrics to facilitate

management. Because benchmarking measures performance at

different times, it’s an important tool for observing changes in facility

activity. Knowing how your compensation levels are compared to your

peers can help to persuade administrators, owners, board members

and physicians to implement change. Solid data can be provided to

make decisions and affect positive change in your facility.

• Benchmarking in the ambulatory surgery center industry is the

collection of clinical and financial data that shows how one facility is

performing compared to other centers. As with any survey, larger

sampling typically results in a more accurate picture.

Basics Concepts of Benchmarking

1. MEASURE:

– Must be done consistently, with the same methodology.

2. COMPARE:

– Utilize a “best performer” or performance of a relevant

group as a comparison.

3. ANALYZE PROCESS:

– Focus on understanding the relationship of process

to results so we will know how to improve.

What are Benefits of Benchmarking?

1. A facility may immediately compare itself with the

aggregated performance of peers by accessing

reports prepared especially for that member facility.

2. Benchmarking patient outcomes clearly shows the

position of a surgery center among other similar

facilities in the industry, and offers a powerful

marketing tool distinguishing a center from the

competition.

3. If your facility is accredited by the AAAHC or

JCAHO, performance improvement and

benchmarking are required.

Types of Benchmarking

History of Benchmarking

• The popularity of benchmarking was spearheaded by the Xerox corporation in the 1970’s

and 1980’s and is now used in corporations throughout the world including healthcare.

Three Types of Benchmarking

• There are three types of benchmarking; internal which is focused on the processes of a

single company, external which examines processes outside of a company’s direct industry

and competitive, which examines processes at firms within the same industry.

1. Internal Benchmarking

• The internal benchmarking process allows a company with a number of facilities that

operate the same supply chain processes to compare and contrast the ways in which the

process is performed in those facilities. For example if a company operates five distribution

centers, the benchmarking process can examine a number of operations that take place at

each of the distribution centers and compare how they are performed and what

improvements can be made by comparing the results of the benchmarking. If a company

benchmarks the processes around inventory accuracy, shipping accuracy and storage

density, the results of the assessments of the facilities can help a company to improve on

those processes at all of the facilities.

Types of Benchmarking

Types of Benchmarking (Continued)

2. External Benchmarking

• For companies that have performed internal benchmarking and want to investigate new ways

in which to improve performance of their internal processes, external benchmarking can

produce significant improvements. Many companies believe that their processes are as

efficient as possible, but quite often, the efficiencies are limited by the knowledge within the

company. The external benchmarking process takes a company outside of its own industry and

exposes them to different methods and procedures. For example, a manufacturer and

distributor of electrical components have internally benchmarked their warehouses for a

number of years and have exhausted ideas on improving efficiencies. They approach a very

successful retail company to visit their central warehouse and benchmark the processes that

occur there to compare to their own warehouse processes. The external benchmarking allowed

the manufacturer of the electrical components to assess the processes seen in the retailer’s

warehouse and develop an improvement plan for their own facilities based on the results.

3. Competitive Benchmarking

• For companies that are not performing as well as their competitors they may want to identify

the reasons why their processes are not as efficient. Consulting and research firms can

perform competitive benchmarking studies for companies that will identify the strengths and

weaknesses of their processes based on those of their competitors. The company can then

produce improvement plans based on the results of the competitive benchmarking.

Components of Benchmarking

• There are a number of components to a benchmarking study. Not every benchmarking

project will incorporate these components, but a combination of these can be used.

1. Financial benchmarking – This involves a financial analysis of the operations that

are assessed. For example, a company can compare the cost of storing medical

supplies in each of its locations.

2. Performance benchmarking – This can compare the efficiency of performing a task

in one company location to another, or to a competitor’s.

3. Product benchmarking – This method compares the product of one company

against another, or comparing between facilities in the same company.

4. Strategic benchmarking – This method observes how other companies compete.

This can be within the same industry or outside of the companies industry.

5. Functional benchmarking – This is considered to be traditional benchmarking where

a company will benchmark a single process at a location or a number of locations to

identify where efficiencies can be made.

Why benchmark?

1. Set high standards for performance to meet patients’ and staff’s expectations.

2. Prepare for public disclosure/transparency and pay for performance measures.

3. Meet accreditation requirements:

• Accreditation Association for Ambulatory Health Care (AAAHC) Quality Management and Improvement chapter specifies benchmarking activities.

Why benchmark?

4. Develop and sustain a culture of learning and improvement.

5. Strategic Planning: To allocate resources wisely, to areas most likely and most important to improve.

• Benchmarking gives you tools to assess whether particular

areas should be the focus of improvement activities.”

• “If you’re performing well and your infection rates, at less than

one percent, are better than at the local hospital, then a

consumer may want to choose the ASC as opposed to the

hospital as a setting for their surgery,” ASC Administrator, Plano

AAAHC & Benchmarking

• The Accreditation Association for Ambulatory Health Care (AAAHC) has made

benchmarking a priority.

• “The AAAHC Institute for Quality Improvement, which is a nonprofit subsidiary

of the AAAHC, offers a number of opportunities to participate in studies,” says

Naomi Kuznets, director of the AAAHC Institute for Quality Improvement. The

AAAHC established the institute in 1999 to provide ambulatory healthcare

organizations opportunities to participate in clinical performance measurement

studies and educational programs.

• “In terms of surgery studies, we have cataracts, colonoscopy, knee

arthroscopy, and now we’re just beginning a study on myringotomy, tube

insertion,” Kuznets adds. “We usually do those on an annual rotation. We offer

education on quality improvement and benchmarking, and we usually do that in

coordination with the AAAHC’s educational conferences, ‘Achieving

Accreditation.’”

• Both AAAHC-accredited and non-accredited ASCs provide the data that is used

for benchmarking; they can be single- or multi-specialty, and can be office-

based as well as freestanding centers.

Role of Benchmarking in the

Performance Improvement Cycle

Benchmarking plan,

Design and Measure:

identify important

measures, leaders, and

details of their

successful processes

Benchmarking

analysis: provides

process and measures

to “jump-start” your

improvement project

Benchmarking

provides the rigorous

comparative data to

help you set goals and

monitor progress

Benchmarking

research, site visits and

analysis have identified

critical success factors

for improving the

process under study

How can Benchmarking can help us?

1. Ensures the facility is working on the right priorities.

2. Once priorities have been selected, benchmarking can support

improvement to an optimum level.

3. Once ASC team members decide to participate in a

benchmark survey, they have options which include programs

run by the Ambulatory Surgery Center Association, SOIX and

the Medical Group Management Association (MGMA) among

others.

4. It is advantageous to benchmark with more than one group.

Not all organizations collect the same data.

How can Benchmarking can help us? Toyota’s Modular Approach

• A process borrowed from Toyota was the key to the successful reorganization

of a practice’s entire central business office. The goal was to create business

processes with fewer errors. Toyota’s manufacturing approach of cross-trained

small teams might made sense.

• Toyota’s key approach: Teams, Information and Accountability.

• By converting a functionally organized (customer service, billing, posting, etc.)

office into workgroups. A workgroup has 3 or 4 team members who handle all

aspects of a business office for an assigned small group of physicians. The

operation is now very modular, like an efficient manufacturer. As new physicians

come on board, new workgroups can be created.

• The payoff:

• Business office staff are more accountable for accuracy; communication

between patients and business office staff has improved; and the system

redesign has created better working relationships among physicians, clinical

and business office staff.

How can Benchmarking can help us? Identifying Emerging Trends

• A plethora of trends are proliferating recent data. Knowledge of these trends

can prove to be a real asset on the development and future shaping of an ASC.

• When a trend develops within your industry, you don’t want to find out after the

fact. The rapid growth of ASC development proves that surgery centers do not

have the luxury of waiting annually to discover the national average. Your local

Joint Commission accredited hospital could have taken your business away.

• The following trends were identified in recent benchmarking studies:

1. Averaging OR times across six orthopedic procedures, from ACL repair to

shoulder arthroscopy, the “average” OR time reported is 73 minutes. The

longest time is seen in ACL repairs and the shortest time is seen in carpal

tunnel release.

2. The average OR time in cataract procedures reported is 34 minutes, and the

average OR time for GI endoscopy is 22 minutes (this includes EGDs, 17

minutes and colonoscopy, 27.5 minutes).

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What can we Benchmark?

High strategic priority

• Medicare, JCAHO, State mandates, High-volume Payors

• Patient / Customer Satisfaction

• High-profile quality and patient-safety advocacy organizations

• Private subscription membership data systems

• Specific collaborative and consortium efforts

• Operational problem areas requiring research and investigation

High operational priority

What can we Benchmark? Benchmarking Example Items

Benchmark Items

Total Cases Preformed

Reported Occurrences

Medication Errors

Narcotic Counts

Adverse Drug Reaction

Post-Op Complications (48*)

Incorrect Site

Reported Infection/Complication

Employee Injury/BBP Exposures

Other

Delays

Anesthesia - Induction/Emergence

Physician Late Arrival

Prior Case Delay/Case Time Insufficient

PACU Beds/Equipment

Facility Personnel

Hospital Transfers

Overnight Stays

Sentinel Events

Benchmark Items

Chart Deficiencies

History & Physicals

Dictations

Billing delays > 5 days

Pending Signatures > 30 days

QA Program - # of studies

New/Revised Policies Introduced

Peer Review - #

Patient Surveys Returned

Positive Response

Negative Response

Case Cancellation

No Show DOS

In Pre-Op

In OR before induction

In OR post induction

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What Financials can we Benchmark?

• In addition to the clinical and patient satisfaction, examining means, medians,

and standard deviations of financial indicators is of equal importance.

• In a pure financial benchmark, we can measure:

• Number of cases

• Gross billings

• Net revenue

• Accounts receivable days

• Net income

• Operating income

• Staffing costs

• Staffing costs per patient

• Supply costs per patient

• Gross margin per patient

Benchmarking Multiple Systems

Examining Data

• Exercise caution in comparisons, don’t stack a endoscopy center

against an orthopedic center. Examine the center’s specialty mix.

• Annual operational benchmarks for laundry and linen expenses, office

expenses, telephone expenses, and housekeeping expenses can

identify outliers.

• One center suspected laundry and linen expenses were inflated. After

an audit they found they had been inadvertently overcharged nearly

$12,000. A credit was issued but if the benchmarking wasn’t

performed, this outlier might not have been caught. The numbers

pointed to the right direction, started the questioning, and the

questions turned into the problem.

Examining Data

• While benchmarks often tell ASC administrators what they already know, the

data can at other times be a big surprise.

• When you find out your supply costs are 32% higher than at another surgery

center for the same procedure, you examine supply usage closely and what

you are paying for each supply item. Clinical benchmarking studies have

surprised some providers who thought their complication rate was low, making

them take a hard look at their patient care processes.

• Most surprises are usually modest. Maybe a infection rate is at 1.5% vs. the

average at 1%. Or cost for supplies is 35% and the average is 28%. While not

critical, there’s opportunity for improvement.

Examining Data

• If an ASC discovers that they had exceptionally lengthy recovery times, that

number might be reflected in man-hours per patient. Is the facility overstaffed or

is there an anesthesia problem?

• Scrutinizing A/R days can point to many problems. Are they not pre-certifying

properly, not getting bills out on time, or are the claims not going out cleanly?

• Benchmarking is only a first step and does not provide all the answers. For

instance, one ASC may have higher costs than a competitor, but there could be

a reasonable explanation. The same goes for clinical benchmarking. It may well

be that the 1.5% infection rate is because they have a patient population that’s

more at risk.

Implementing Change

• ASC’s should know ahead of time that their efforts should translate into valid reports that

can lead to change in the surgery center.

• Benchmarking should be a continuous process as a function within the performance

improvement module of your organization. Surgery centers should not implement

benchmarking tools into their organization without a plan to use the data to improve their

business.

• Many people get benchmark information, but they don’t know how the best performers got

to that and how it differs from what they’re doing. You need to look logically at whether

what others are doing makes sense for your organization and if it does then try to

incorporate that to see if it helps your performance on a particular measure. The numbers

alone are not enough. It’s the information behind the numbers that’s really important.

• Q: How would you describe how benchmarking has helped you to improve your

facility and remain competitive?

• A: “Benchmarking gives the center the opportunity to measure both quality and

financial outcomes to other facilities and, if warranted, to establish quality

improvement projects, which in turn improve the quality of care provided. To be able

to measure our center’s results with other like centers can be used as a motivational

tool for both the center’s staff and the medical staff to constantly improve our

processes. Having outside data available enhances our ability to make sound

business decisions.” ASC Administrator, Beaumont

Help with Benchmarking

Who are a few resources for help with

Benchmarking?

Amerinet & Benchmarking

• Amerinet has designed benchmarking solutions to assist in assessing supply

chain and workforce efficiencies through data analysis.

• Their solution set is comprised of software resources and professionals

dedicated to optimizing workforce productivity and reducing clinical and

operational expenses.

• Amerinet offers resources to help your facility measure performance against

national benchmarks and trend performance over time, including:

1. Cost studies - Review historical invoice data and compare to current costs.

2. Line item comparisons for medical and surgical products. – Identify best price and contract tier maximization.

3. Real-time / Daily pricing audits - Examines pharmacy distributors.

4. Utilization and Profitability – Data organized by inpatient DRG.

5. Comparison Reports - Examine organization, facility and department levels.

6. Links to national benchmarks.

ASC Association & Benchmarking

• Kathy Bryant president of ASC Association. “The Outcomes Monitoring Project is the

industry’s standard and meets AAAHC and JCAHO requirements for benchmarking.”

• This quarterly benchmarking tool is used by ASCs to compare their operations to those of

more than 400 other ASCs. Twenty-two indicators are used, including initial claims denial

rates and days accounts receivable outstanding. “The Outcomes Monitoring Project is an

invaluable resource when communicating with federal and state officials, since ASCs can

point to positive industry data contained in the reports, such as: more than half of ASCs

have less than 1.5 complications and 0 infections per 1,000 procedures,” Bryant adds.

• Clinical markers include complication rate, transfer rate and infection rate; financial include

days A/R outstanding, claims denial rate and total net charge. Operational markers for staff

include paid clinical and non-physician hours; clinical staff turnover rate and non-clinical

staff turnover rate; while process markers include on-time rate, OR time per encounter,

procedure room time per encounter, OR use rate, procedure room use rate and

cancellation rate.

• The data is used to compare with other centers across the country to find ways to improve

efficiencies and care. And since the reports meet AAAHC and JCAHO requirements for

benchmarking, many ASCs participate in order to meet this requirement.

Benchmarking Examples

• Benchmarking has proven useful in many settings

and industries including healthcare.

• The most common indicators are clinical elements of

performance and finance.

• Let’s explore some examples……

Benchmarking Examples Public Clinical Data about Facilities

Hospital X

Source: www.cms.gov

• Definition:

– Numerator: Reported falls

– Denominator: Patient Days/1000

• Benchmark Source: AHRQ

• Benchmark represents: Average reported inpatient fall rate in acute care hospitals

Inpatient Fall Rate Compared to Benchmarks

0

1

2

3

4

5

6

7

8

Q4 Q1 Q2 Q3 Q4

Falls/1000 days

Benchmark Low

Benchmark High

Benchmarking Examples Fall Rates

Benchmarking Examples Patient Satisfaction

• Definition: Overall satisfaction on validated standardized survey instrument from ASC Vendor

• Benchmark Source: ASC Vendor

• Benchmark represents: 73 organizations in our size, type and region peer group

• Conclusions: Facility performance

slipped and has improved to about

the median. We are still well below

90th percentile in our peer group.

Benchmarking Examples

National Measure of Postoperative DVT/PE

PostOperative DVT/PE: Our Data vs. AHRQ Benchmarks

12.6

14.213.6

12

0

2

4

6

8

10

12

14

16

Empiric 2003 Empiric 2004 Empiric 2005 Empiric 2006

Our Data AHRQ Post Operative DVT or PE UCL LCL

Source: www.ahrq.gov

Benchmarking Examples Setting the right goal

Source: http://www.premierinc.com/safety/topics/falls/

Inpatient Fall Rate Compared to Benchmarks

0

1

2

3

4

5

6

7

8

Q4 Q1 Q2 Q3 Q4

Falls/1000 days

Benchmark Low

Benchmark High

Bench Group Low

Bench Group High

Our target range of performance based on benchmarking similar organizations

Current

performance

Benchmarking Examples Energy Efficiency

Benchmarking Examples Preventive Maintenance Cost

Benchmarking Examples Houston Burglary Rates

Benchmarking Examples NAEP Reading Scores

Benchmarking Examples ASC Monthly Cases Performed

Benchmarking Examples ASC Measures

Benchmarking Examples

Seven Steps to Effective Competitor Benchmarking

• 1. Determine which functional areas within your operation are to be benchmarked -- those

that will benefit most from the benchmarking process, based upon the cost, importance and

potential of changes following the study.

• 2. Identify the key factors and variables with which to measure those functions -- usually in

the general form of financial resources and product / process strategy.

• 3. Select the best-in-class companies for each area to be benchmarked -- those companies

that perform each function at the lowest cost, with the highest degree of customer

satisfaction, etc. Best-in-class companies can be your direct competitors, or even

companies from a different industry (Parallel competitors with replacement or substitute

products or services; latent competitors which might backwards or forwards integrate into

your market; or, out-of-industry firms with whom you do not compete, but which have best-

in-class areas to be studied such as FedEx or Wal-Mart in logistics).

• 4. Measure the performance of the best-in-class companies for each benchmark being

considered -- from sources such as the SEC, companies themselves, articles in the press

or trade journals, analysts in the market, credit reports, clients and vendors, trade

associations, government sites or from interviews with other organizations willing to share

their prior research or exchange it with you.

Seven Steps to Effective Competitor Benchmarking

• 5. Measure your own performance for each variable and begin comparing the results in an

apples-to-apples format to determine the gap between your firm and the best-in-class

examples.

• 6. Specify those programs and actions to meet and surpass the competition based on a

plan developed to enhance those areas that show potential for compliment. The firm can

choose from a few different approaches -- from simply improving performance, to emulating

the best-in-class, changing the rules of the industry or leapfrogging the competition with

innovation or technology from outside the industry.

• 7. Implement these programs by setting specific improvement targets and deadlines and by

developing a monitoring process to review and update the analysis over time. This will also

form the basis for monitoring, revision and recalibration of measurements in future

benchmarking studies.

• ROI can be measured in documented successes in terms of:

– New business and the profitability of that new business

– A problem solved

– Or costs contained or reduced by the implementation of the benchmarking process.

Five Benchmarking Mistakes to Avoid

• Benchmarking has become embedded in most organizations as part of the way to stay competitive. Here are some of the

most common mistakes organizations make when benchmarking, and how you can avoid them.

• Mistake #1. Confusing benchmarking with participating in a survey.

• A survey of organizations in a similar industry to yours is not really benchmarking, whatever it may be called. Such a

survey will give you some interesting numbers, but benchmarking is the process of finding out what is behind the

numbers. In other words, a benchmarking survey may tell you where you rank, but it won't help you improve your

position.

• Mistake #2. Forgetting about service delivery and customer satisfaction.

• Benchmarking stories abound of organizations that have become so fixated on the cost of providing their product or

service that they have failed to take the customer into account. Paring down the costs often rebounds in lesser service

delivery, so customers go elsewhere and ultimately you don't have a business. Take a "balanced scorecard" approach

when developing your benchmarking metrics.

• Mistake #3. The process is too large and complex to be manageable.

• A process is a group of tasks. A system is a group of processes. Avoid trying to benchmark a total system - it will be

extremely costly, take ages, and be difficult to remain focused. Better to select one or several processes that form a part

of the total system, work with it initially and then move on to the next part of the system.

• Mistake #4. Misalignment.

• Choosing a benchmarking topic that is not aligned with the overall strategy and goals of the business ; or worse, cuts

across some other initiative the organization is already taking. A team approach at the strategic level needs to oversee

the benchmarking project and make sure that it s in line with what is happening in the business as a whole.

• Mistake #5. Picking a topic that is too intangible and difficult to measure.

• "Employee communication" is probably the most slippery concept that exists in an organization, but it is often cited as

one of the worst problems Many organizations have tried to benchmark it. Encourage your benchmarking team to select

instead a part of the topic that can be observed and measured; for instance, the process of distributing memos around

the organization.

Contact Information

Richard Bays, RN, MBA, CPHQ, CLNC

[email protected]

Phone (832) 316-2701