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Digg It - Benchmarking Mistakes: The Poisonous 'Apples-to-Apples'
Top executives and managers in other industries know it is not only acceptable, but necessary to benchmark with other industries to obtain process improvements. For example, a major hotel chain desires to improve guest services. This chain not only has other hotel chains to examine for comparisons, but also can and should look at theme parks or retail corporations. Instead of comparing hotels to hotels, the hotel’s guest service policies are compared with the guest service policies of theme park
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
s, restaurants, and others. Valuable lessons are gleaned from this benchmarking process. While the industries may function very differently, their fundamental guest service processes are common and provide learning opportunities for all parties. Similarly, retailers have made major improvements in inventory acquisition, warehousing, distribution and tracking. Hospitals haven’t typically studied these processes, citing the “uniqueness” of the healthcare and hospital operations as the reason.
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
As a result, many hospitals continue to practice outdated and non-integrated supply transactions, as opposed to making supply management a priority. Many,processes are similar enough across industries for healthcare managers to learn and adapt process improvements from others.
Even though healthcare downplays cross-industry benchmarking because of the uniqueness of healthcare, they also believe that healthcare-to-healthcare benchmarks are valid only with those organizations exactly alike in st
Even though healthcare downplays cross-industry benchmarking because of the uniqueness of healthcare, they also believe that healthcare-to-healthcare benchmarks are valid only with those organizations exactly alike in st
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
ructure, size, scope, culture, affiliations, physical layout, etc., etc. For example, an outpatient clinic wants to improve its cardiac rehabilitation services but only wants to be benchmarked against clinics offering cardiac rehabilitation services that use Saturdays to deal with overflow, as they do. Healthcare systems also want to benchmark with other systems as opposed to stand-alone facilities. While it is important to determine the way others handle issues, using practice and environmen
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
tal factors to eliminate potential benchmarking partners reduces the value and learning opportunities for the organizations doing the benchmarking.
Does a Twin Exist?
It is virtually impossible for a hospital to find an identical apple. There are approximately 5,800 hospitals in the United States. Focusing on, for example, only 500-bed, non-profits, can narrow this even further. Simply by adding a few more criteria … academic teaching hospital vs. not; location; managed care penetration; numbe
Does a Twin Exist?
It is virtually impossible for a hospital to find an identical apple. There are approximately 5,800 hospitals in the United States. Focusing on, for example, only 500-bed, non-profits, can narrow this even further. Simply by adding a few more criteria … academic teaching hospital vs. not; location; managed care penetration; numbe
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
r of buildings; outpatient volumes; etc., simple mathematics shows that a hospital can eliminate all potential hospitals as benchmarking partners.
Requiring multiple and non-relevant criteria narrows the list of acceptable benchmarking partners. Hospitals are complex operations. There are an infinite number of differences among hospitals, and there isn’t one exactly like another. Eric Franz, Manager of Financial Services at OSF Saint Francis Medical Center in Peoria, Illinois, agrees. “There is
Requiring multiple and non-relevant criteria narrows the list of acceptable benchmarking partners. Hospitals are complex operations. There are an infinite number of differences among hospitals, and there isn’t one exactly like another. Eric Franz, Manager of Financial Services at OSF Saint Francis Medical Center in Peoria, Illinois, agrees. “There is
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
no twin hospital out there,” says Franz. “It just doesn’t exist. We are unique and we want to be unique.” It makes no sense, then, for hospitals to proclaim their uniqueness while at the same time developing lists of criteria “acceptable” benchmarking partners must meet. For hospitals to use benchmarking effectively, they must accept the fact that their twin doesn’t exist. Then, they can use their resources to learn instead of wasting resources benchmarking their level of uniqueness. Apples-
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
to-Apples
Misconstrued – The Benchmarking Poison
Consider this example of how the value of a benchmark decreases as the hospital attempts to narrowly define acceptable benchmarking partners: Apples-to-Apples: Benchmark the cost of medical transcription functions at hospitals. McIntoshes-to-McIntoshes: Benchmark the cost of medical transcription functions at hospitals with a centralized transcription department that out sources at least 60 percent of their transcriptions.
New England McInto
Misconstrued – The Benchmarking Poison
Consider this example of how the value of a benchmark decreases as the hospital attempts to narrowly define acceptable benchmarking partners: Apples-to-Apples: Benchmark the cost of medical transcription functions at hospitals. McIntoshes-to-McIntoshes: Benchmark the cost of medical transcription functions at hospitals with a centralized transcription department that out sources at least 60 percent of their transcriptions.
New England McInto
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
shes-to-New England McIntoshes: Benchmark the cost of medical transcription functions at a system-wide set of hospitals with a centralized transcription department that out sources at least 60 percent of their transcription, writing at least 40 different types of reports and an average TAT for History & Physicals of 24 hours. There should be at least three but no more than six hospitals in the system, located at least 10 miles apart, but within a radius of 124 miles.
Similar benchmarking “requi
Similar benchmarking “requi
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
rements” surface in many situations.
System-based hospitals only want to be compared to other systems, “preferably one with a similar structure and size”. Why? How will they know if their system structure is a competitive advantage if they don’t compare themselves to different structures or stand-alone hospitals? These highly selective criteria result in a less useful benchmark and less value for the facility that does the benchmarking. Attempting to “benchmark with a similar transcription
System-based hospitals only want to be compared to other systems, “preferably one with a similar structure and size”. Why? How will they know if their system structure is a competitive advantage if they don’t compare themselves to different structures or stand-alone hospitals? These highly selective criteria result in a less useful benchmark and less value for the facility that does the benchmarking. Attempting to “benchmark with a similar transcription
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
epartment” in the above example obscures the impact in-house vs. outsource transcription; centralized vs. decentralized transcription; stand-alone vs. corporate systems has on turn-around time, cost, accuracy, etc., … the exact opposite result expected of a good benchmark.
Mirror, Mirror on the Wall
What do healthcare organizations learn from the search for and ultimately from their “twin” hospital? The search process teaches them that if they add enough criteria, they can reduce their learni
Mirror, Mirror on the Wall
What do healthcare organizations learn from the search for and ultimately from their “twin” hospital? The search process teaches them that if they add enough criteria, they can reduce their learni
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
ng pool and maintain the status quo because “there’s no one out there like me!”. If they happen to find a few “twin hospitals” to compare with, they’ll find that their solutions are similar … again reducing the learning opportunities (what can you learn from someone who’s just like you?). Getting an organization to recognize that the perceived “differences” likely point to improvement opportunities is difficult. How much more comforting is it to believe that “my costs could be lower except I
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
have these corporate allocations, and a non-integrated information system, and a high managed care penetration”, than to come to grips with the fact that your costs are higher because of your choices (stand alone vs. corporate) and practices (allowing departments to purchase information systems that don’t interface).
It’s ridiculous to let truly minor differences eliminate cross-organization learning opportunities. According to Franz, there are enough similarities among hospitals to determine
It’s ridiculous to let truly minor differences eliminate cross-organization learning opportunities. According to Franz, there are enough similarities among hospitals to determine
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
where improvements can be made. “The comparison hospitals we used for benchmarking were 80 to 85 percent similar, which is enough to get a good start on this process,” says Franz.
In addition to searching for twins, hospitals similarly search for best practices … thought by many managers to be the holy grail of process improvement. In the transcription example above, you can almost hear the manager thinking “… if I can find the best practice with respect to transcription, my problems will be s
In addition to searching for twins, hospitals similarly search for best practices … thought by many managers to be the holy grail of process improvement. In the transcription example above, you can almost hear the manager thinking “… if I can find the best practice with respect to transcription, my problems will be s
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
olved”. The problem here is, similar to the twin hospital, there’s not a single “best practice” for most healthcare operations. A recent survey of hospitals found that many hospitals that had previously outsourced transcription were now bringing the function in-house; while in-house operations were looking for transcription vendors.
Why?
Changes in fit with their culture, their work force, and their environment. The “make” vs. “buy” decision is very dependent on the individual organization.
Why?
Changes in fit with their culture, their work force, and their environment. The “make” vs. “buy” decision is very dependent on the individual organization.
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
So, while buying transcription services is a best practice for Hospital A, it might be a miserable failure for Hospital B. That is the job of the managers … to sort through their options, coalesce good ideas from multiple sources and come up with the most effective practice for their organization. One hospital cannot simply implement another hospital’s method without adaptation since the cultures, layouts and environments of each are different. Remember … hospitals claim to be unique and the
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
refore they can’t be compared in a benchmark. Why then, would they willingly presume that someone outside their organization knows what the best practice is for them? Instead, a hospital must take bits and pieces from others’ most effective practices and formulate the most effective practice for their organization.
Who’s the Fairest of Them All?
The hospitals and healthcare systems that will be the “fairest in the land” are those who can avoid the common benchmarking mistakes. They will fig
Who’s the Fairest of Them All?
The hospitals and healthcare systems that will be the “fairest in the land” are those who can avoid the common benchmarking mistakes. They will fig
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
ure out WHAT they want to benchmark. If they want to improve costs, they will benchmark costs and not poison the “apples-to-apples” comparisons with non-relevant criteria such as payer mix, physical layouts, corporate structure, etc., on the way to determining their cost opportunities. The hospitals who use benchmarking as an effective tool will not waste their precious labor resources trying to find a twin hospital because they realize that reduces learning opportunities and encourages manage
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
rs to think that the status quo is acceptable. Winnowing the list of acceptable learning partners narrows the value and usefulness of the benchmarking results.
The healthcare organizations that will benefit from benchmarking are the ones who realize that the relevant points of difference are driven by their own practices, structures and choices; and, they will make changes accordingly.
Hospitals who gather many effective practices and blend them into a strategy that meets the needs of their or
The healthcare organizations that will benefit from benchmarking are the ones who realize that the relevant points of difference are driven by their own practices, structures and choices; and, they will make changes accordingly.
Hospitals who gather many effective practices and blend them into a strategy that meets the needs of their or
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
ganization will benefit. These hospitals know that slavishly mimicking a process without consideration of their own culture, values and needs is managerial malpractice. Rather than comparing New England McIntoshes-to-New England McIntoshes, organizations who understand that the best use of benchmarking is to identify gaps in their performance, will be the ones who will learn from many others in the effort to find the most appropriate apples to improve their own unique processes and performance
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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