Your organization owns and manages a small group of ambulatory practices. You're currently in your office, your staff is working hard taking care of patients and physicians aren't complaining. Right now, life is good.
So why should you care about how well the competition is doing? They're in their sandbox and you're in yours, right?
Wrong!
Managing ambulatory care used to be about taking care of patients while managing your budget. Keep in mind that most organizations use history as the foundation for the next year's budget. Those days will have to change to stay competitive with the new payment model.
Here's how we've evolved from early payment plans.
Remember the days when we used to be a fee-for-service operation? We simply billed for what we did and received some type of negotiated compensation. We made money without too much risk. Then penalties started kicking in for hospital-acquired conditions, which reduced our bottom line when patients returned for care. After that came bundled payments, shared savings and now global payments. What was once a very profitable operation has become a challenge just to stay in business. Every healthcare organization has looked at saving money with cheaper supplies. That's a given. They've also looked at cutting out unnecessary offerings that weakened the bottom line.
Now organizations are starting to look more at their labor pool to reduce costs. Why? Because labor costs make up about 60% or more of the expenses in a healthcare organization.
Pretty soon, healthcare.gov will be posting outcomes and efficiency statistics for all healthcare organizations. Both consumers and insurers will be able to look at a group of healthcare organizations and decide which one will get their business. Insurers will be guiding patient populations to the most efficient operation with the best outcomes.
So you can see it becomes very important to know how you stack up against your competition.
How does competitive benchmarking help?
Competitive benchmarking compares your organization's health and efficiency to that of organizations like yours. It will show you if and where you have labor improvement opportunities and how much of an improvement is needed. Competitive benchmarks are also the standard by which operating budgets should be built.
Not knowing how you compare to your peers will keep you wondering if you are the best performer on your block (or in your region), and whether you will see an increase or decrease in business.
And without metrics, it's impossible to evaluate your progress and performance. Successful organizations constantly assess themselves and improve in all dimensions of their business.
Are you benchmarking at your organization? Let me know how. If not, what are some of the challenges you face?
This post appeared first on Action For Better Healthcare.