How to Use Benchmarking to Boost Performance

In our March feature, we discussed what makes a good benchmark and the elements that influence a benchmark’s relevancy to your business. This month, we show that a benchmark must be relatable to the factors your organization can affect. After all, the point of benchmarking is to give information that helps you make positive changes in your business.

There are several key financial indicators that are typically used to evaluate a hospice’s performance. Your first step is to determine these indicators and understand how they impact your business. Then, the next step is to identify the most relevant benchmarks that can help show you specific ways to improve your agency’s performance. Here we use non-cancer hospice admissions as an example of how benchmarks can be used to affect positive change.

Benchmarking Non-Cancer Hospice Admissions

Increasing hospice admissions is a top priority for many hospice administrators. Because non-cancer admissions are often an important way to expand the reach of the hospice benefit, using the non-cancer death rate on hospice as a benchmark can help you determine:

  • How much opportunity is present in your market
  • Where to focus your efforts.

To help you better understand your market’s maturity, as well as discover your market opportunities, compare your hospice’s non-cancer death rate to relevant benchmarks. In Figure 1, for example, we demonstrate the 2006 non-cancer hospice death rates at a state level. With a national average of 60.6%, there’s a significant variation in non-cancer hospice death rates between states in the lowest quartile (54.7%) compared to states in the highest quartile (66.5%).

Graph showing the 2006 non-cancer hospice death rates at a state level

Compare your organization’s non-cancer hospice death rate to this state-level benchmark. If your rate is below the benchmark, there are potentially patients in your market who are not getting the hospice benefit. Thus, there is opportunity for your agency to grow admissions of non-cancer patients. Because this difference could be even greater at the local level, you may also want to look at local mortality data – including the percentage of deaths on hospice – to better define your market penetration.

Using Benchmarks to Uncover Your Opportunities

Determining if your hospice is different or in line with your market’s norms is a critical piece of information.  Next, it’s important to understand what factors are affecting both the market and your position in the market. For instance, can you do more within your market to promote hospice? Or are there internal barriers preventing you from increasing admissions? Looking at the factors that influence the benchmark will help you pinpoint the answers to these questions.

So ask yourself:

  • What types of physicians do we market to beyond oncologists?
  • What settings do we actively market to – hospitals or assisted living or skilled nursing facilities?
  • How does our access policy define patients for treatment and transition?
  • Do we have the resources to handle increased volume?
  • What other factors play a role in my market?  Presence of a major academic cancer center?

Although each of these factors can affect a hospice’s performance, the weight of influence may be market specific. You may only be marketing to oncologists, or you may have a number of non-cancer marketing programs reaching out across clinical specialties. Does your agency need a specialty program? If so, which one is most appropriate for your service area? Another possible influence is the local teaching hospital. Is it draining referrals for their clinical trials?  Is there an aggressive palliative care program at your local hospital?

Benchmarking can help you see how these factors may be influencing your agency’s performance. The key is to take a closer look at your market and its potential, and evaluate where the opportunities are. In this way, you can focus your agency’s resources and efforts in the areas you’re most likely to achieve the desired results.

Benchmarking is valuable tool; however, it’s important to understand what makes a benchmark relevant to your business. Click here or give us a call at 215-657-7373 for more information about how Healthcare Market Resources can help your agency find and use the most effective benchmarks for assessing performance and identifying new opportunities for growth.