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THE ART OF
BENCHMARKINGBest practices and bottom line success
Ankur Verma - 40707006
Bhavya Pabby - 40707009
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INTRODUCTION TO BENCHMARKING
A means of comparing performance based on critical
success factors. In medical group practice,
benchmarking activities range from comparing financial
and utilization data to clinical and quality indicators.
A strategy used to quantify existing performance factors
and compare them against competitors practices.
(Raymond Manganelli and Mark Klein,The Reengineering
Handbook, 1994)
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ALSO
A well-defined technique or methodology that,
through experience and research, fosters
performance improvement.
The continuous systematic process for
evaluating the products, services, or work
processes of organizations that are recognized
as representing best practices for purposes of
organizational improvement.
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IMPLEMENTING BENCHMARKING
Total Quality Management (TQM) Reduce variationwithin processes.
Continuous Quality Improvement (CQI) Reduce
variation across processes/systems.
Plan, Do, Check, Act (PDCA) Redefine processesto significantly improve performance whilereducing variation.
Six Sigma: Define, Measure, Analyze, Improve,Control, Replicate Employ a strict methodologyand rigorous statistical analysis to achievebreakthrough performance.
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WHEN TO BENCHMARK?
3 reasons to benchmark performance-
Verification
Negotiation
Performance Improvement
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VERIFICATION
Are our contracts performing as anticipated?
Are our employees performing as expected?
Are we in line with budget?
Are our patients satisfied with our service?
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NEGOTIATION
At what rate should we compensatephysicians?
What productivity expectations should weassociate with compensation?
What third-party reimbursement level is
appropriate?
What value does our partner (e.g., hospital,health center, school) derive from our service?
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PERFORMANCE IMPROVEMENT
How can we improve physician productivity?
How can we improve collections?
How can we reduce expenses?
How can we improve facility utilization?
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AWORD OF CAUTION!! Be cautious in selection of benchmark
How was the benchmark data collected?
What errors might exist in the benchmarks?
How applicable is the benchmark to your
circumstances?
Is the benchmark meaningful?
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EVALUATING DEPARTMENT
PERFORMANCE
The potential objectives are-
Solving operational and management problems.
Ensuring appropriate management controls.
Improving organizational performance.
Setting standards for performance monitoring.
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COMPONENTS OF
EVALUATION PROCESS
Organizational structure.
Operating procedures.
Management considerations.
Financial management.
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ORGANIZATIONAL STRUCTURE
Organization charts Formal versus informalreporting relationships
Job descriptions Span of control
Interviews Efficient grouping of
duties
Surveys Matching duties withjob skills
Review techniques Potential Issues
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Review techniques Potential issues
Work flow analysis Work load backlogs
Internal controls
Time and effortmeasurement
Duplication of effort
Surveys Adequate written
procedures
Work load
throughput
measurement
Adequacy of office
automation
Policy and procedure
analysis
Physical environment
limitations
OPERATING PROCEDURES
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FINANCIAL MANAGEMENTReview techniques Potential issues
Overall organization
financial
environment
of operation
Unstable financial
situation
Evaluation of costs Adequacy of management
reports
Comparative
Analysis
Trend analysis
Trends in operational
performance
Review of
management reports
Reasonableness of cost of
operations
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HOW DO YOU BENCHMARK?
Essential characteristics of a benchmark-
Integrity Consistency
Validity
Measures are meaningful
Sample size is adequate Adequate time period
Similar organizational characteristics
Transferability
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ESSENTIAL OBJECTIVES OF
A BENCHMARK
Discover the inputs (causes) of a poor qualityoutcome
Remove those inputs from the process
Institute controls so the inputs and pooroutcomes do not return
Share knowledge regarding specificimprovements across the organization
Continue the improvement cycle
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KEY STEPS TO BENCHMARKING
DEFINE a serious performance problem or concern
MEASURE the level of performance (outcomes)
COMPARE current outcomes to selected benchmarks
ANALYZE root causes (inputs) of poor performance
IMPROVE by removing root causes through
developing and implementing redesigned
processes/systems
CONTROL by designing and implementing systems toprevent root causes/poor outcomes from returning
CREATE a best practice that fosters ongoing
performance improvement
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BENCHMARKING EXAMPLES
Sources of benchmarks-
Internal
Comparing against internal benchmarks.
Competitive Comparing against competitors practices and/or
performance
Functional
Comparing a specific process with a similar one
within a broad range of your industry or business line
Generic
Comparing a specific process from unrelated
industries or business lines
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ISSUES WITH BENCHMARKING
How do we differ a benchmark from a trade secret?
The case of Shanta Biotech Ltd. and Smithkline Beeclan
Co.
Hepatitis B vaccine-a surface antigen-THE PRODUCT
Genetic Engg- THE PROCESS
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CONTINUED
Parameters of the process are:
Type of yeast
Environmental conditions
Maturation period
India has laws governing process patency, not
product patency
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KEYS TO SUCCESS-WHAT
WEVE LEARNT
Evaluate departmental issues to identify problems or
concerns
Select benchmarks that can be used to guide physician
or employee performance and ensure the data can bemeaningfully translated into action
Translate benchmarking into methodologies and
techniques that create best practice
Change performance is the essential key, not to grade
performance
Monitor the results, and if desired outcomes are not
achieved, intervene
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