Benchmarks Help Agencies Understand Key Metrics
Posted On: June 26th, 2014
Former Vice President, Product Marketing and Strategy, McKesson (Retired)
Regardless of whether your agency is seeking to grow revenue, control costs, find new referral partners or something else, benchmarking is a critical consideration, says David Berman from Simione Healthcare Consultants.
But benchmarking should be a group effort with buy-in from executives and clinicians that focuses on metrics important to your agency and to your market, says Berman, principal at the consulting firm dedicated to the home care industry. “Benchmarks hold people accountable,” Berman says. “You should give people the responsibility to manage the data they are responsible for.”
Set Realistic Goals – Make Accurate Comparisons
Goals should be realistic, but understand that benchmarks are an average. And what agency wants to be average? Look for guidance from the top 10% of agencies and look at your baseline performance before setting goals. Berman suggests trying to exceed home health benchmarks by 5%-10%.
The particular metrics your agency tracks likely will differ from other agencies, but common revenue metrics in home health include census, case mix weight and payer mix, while costs include productivity, staffing, visits and days. For hospice, revenue metrics include census, length of stay and level of care. Cash metrics include intake, documentation, billing and investments.
In order to get apples-to-apples comparisons for the benchmark data you use, your data must be calculated in the same way the benchmark data is calculated. One person should be in charge of benchmarking – working with management to define the objectives and goals and with staff to develop baselines and understand possible time constraints.
Benchmarks Should Address 4 Critical Factors
Overall, home health benchmarks should address four critical factors: revenue, cash, cost and quality, Berman says. But at the same time, agencies should not get bogged down in data. Instead, pick metrics that highlight each of the factors and then manage those.
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“You need to understand your agency and how it might differ from the benchmark,” Berman says. “But at the end of the day, your agency probably isn’t much different from the aggregate. You just need to calculate the benchmark, get buy-in and do it.”