The competitive pressures of managed care are adding one more compelling reason for hospitals to benchmark. Surprisingly, however, marketers are not as involved in this competitive-intelligence-gathering process as they should be.
Marketers often are the last to know about a healthcare organization's decision to assess competitive management ideas for evaluating operations, making cost-saving quality initiatives or launching a new service.
But marketers can and should be the lead research vehicles for developing benchmarking parameters, says Chris Wright, senior business strategies consultant with Frost & Sullivan, a high-tech market research firm in New York.
Sharing Industry Information
One of the biggest benchmarking obstacles is finding healthcare organizations that are willing to play by the same rules in sharing competitive information. Patient confidentiality and divulging problematic operational information top the list of concerns.
"This is a very political situation and there are no standards developed yet for system-wide benchmarking in healthcare," says Wright.
But managed care plans are demanding that providers be armed with more competitive information in key areas of disease management, outcomes management and patient satisfaction.
And, consumers are informally benchmarking hospitals to arrive at their own opinions of how hospitals compare with the local competition.
"Performance levels are being benchmarked by the community, whether the hospital is or not. Marketers need to know what those factors are," says Wright.
To secure a seat at the benchmarking table marketers can:
- Provide key patient perspective throughout the process;
- Help develop the critical success indicators necessary to benchmark such as market position, operating environment and financial issues; and
- Conduct preliminary research on which healthcare organizations would make the best benchmarking partners (both in and outside of the industry); and
- Marketers can spearhead efforts at getting executives to buy-in to benchmarking by identifying potential industry partners and highlighting its benefits.
Benchmarking at Children's Hospitals
Particularly in special niche areas, benchmarking efforts can help to develop best practices that improve internal operations.
In 1992, twelve children's hospitals agreed to participate in a benchmark study to improve emergency room waiting time, diagnostic cardiology and operation room turnaround.
The hospitals identified and agreed on "critical success factors" that included operating environment, market position and financial issues to compare intelligence.
The effort was coordinated by Medical Management Planning, Inc. (MMP), based in Bainbridge Island, Wash., which consults on healthcare benchmarking projects.
Research from the effort presently provides the participating hospitals with a wide range of industry-specific marketing information from white papers on best practices to focus groups and surveys.
Additionally, the hospitals have improved their bottom line through operational cost reductions discovered through benchmarking, according to Sharon Lau, an MMP consultant.
Seeing the big operational picture for participating hospitals has led to reductions in wait times - a huge challenge for Children's hospitals. Additional benefits include:
- reductions in resource consumption (lab tests per adjusted discharge);
- reductions in supply costs;
- job integration and redeployment, as well as reduction of full-time employees (FTEs); and
- reductions in lengths of stay for various patient groups.
Going Outside the Industry
Industries with more benchmarking experience, like manufacturing and retail, go outside of their industries to find superior critical success factors, especially those involving customer service.
The healthcare industry should take note. "Hospitals aren't convinced yet," says Lau, who could only cite a few examples of hospitals that were willing to look outside for effective marketing solutions.
Lau is an advocate of "picking best performers regardless of industry."For example, a radiology department looked to Cadillac for ideas on superior patient care and a hospital billing department borrowed ideas from American Express [AXP] on how to make patient billing simpler.
Patient care and handling complaints are the hot spots that hospitals can improve with marketing ideas from other industries, says Doug Gentry, president of Polaris Consulting, a market research firm based in Piedmont, Calif.
However, he stresses that labor and delivery are key areas where hospitals need to stay within the industry to benchmark because of the unique healthcare issues involved.
Online Benchmarking Opps
The Web is an ideal vehicle for marketers to surf for a benchmarking partner. The Benchmarking Exchange (TBE) provides organizations a centralized, fast-access way of participating in numerous phases of benchmarking-from online forums to industry-specific survey reports.
More than 40 healthcare organizations use the site (http://www.benchnet.com), according to Tom Dolan, TBE's president, who expects these numbers to surge in the next few years.
Quality outcomes are the big draw and online benchmarking allows these organizations to learn what initiatives are most effective by regional market and service specialty.
Using the Web for benchmarking efforts is also ideal for beginners. TBE allows those organizations just getting started to:
- See what organizations have done to launch their benchmarking programs.
- Conduct literature searches for benchmarking studies.
- Learn the benchmarking dos and don'ts.
- Solicit help from TBE members.
- Contact organizations to partner with on a benchmarking study.
- Form a group with member organizations to share in a consortium study.
- Electronically exchange bench-marking questionnaires and agendas with partner organizations.
- Talk to organizations that have benchmarking experience in a particular area.
The Web site provides industry-specific surveys and reports on benchmarking exercises in progress. +TBE memberships are $25/month or $195/year; group rates are available.
Benchmarking Benefits
Benchmarking goes beyond finding out how your organization stacks up against the competition. Instead, it is a well-orchestrated effort for investigating and discovering "best practices" for healthcare delivery - key marketing buzz words for managed care organizations.
For healthcare marketers, benchmarking :
- leads to better understanding of the healthcare organization's processes and how they measure up to the competition;
- helps to establish attainable marketing objectives both internally and externally using best performers and critical success factors;
- provides ideal "lessons learned" case studies that can translate into enhanced quality and increased operational efficiencies.
Source: Medical Management Planning, Inc. (http://www.mmpcorp.com); Sharon Lau, 213/644-0056
Benchmarking Consulting Firms
- Mecon (San Ramon, Calif.) Contact: Eleanor Anderson-Miles, 510/838-1700, ext. 6906 http://www.mecon.com
- Medical Management Planning, Inc. (Bainbridge Island, Wash.) Contact: Sharon Lau, 213/644-0056 http://www.mmpcorp.com
- Comparative Management Associates (Miltion, Mass.) Contact: Jack Arabian, 617/698-0077 http://www.world.std.com
- The Benchmarking Exchange (Aptos, Calif.) Contact: Tom Dolan, 408/662-9855
Healthcare Marketing/Strategic Consultants
- Polaris Consulting (Piedmont, Calif.) Contact: Doug Gentry, 510/654-1837 http://www.polarconsult.com
- Frost & Sullivan (New York) Contact: Chris Wright, 650/961-9000 URL: http://www.frost.com
Source: HPRMN