Benchmarking in Endoscopy

Benchmarking is the process of identifying, measuring, and understanding data from similar organizations, and comparing your own data against this to improve your own product or service.

Benchmarking can be done both formally and informally. However, healthcare facilities that do not participate in a formal process are missing out on a tremendous opportunity to improve their business, patient satisfaction, and staff fulfillment.

Informal benchmarking — judging one’s facility against its own performance in past years or months, or against a peer’s facility — can provide a general idea of how the facility is improving over time, but this process lacks the formality and accuracy provided by national organizations or large management and consultant companies.

The informal method can be done by simple word of mouth, which has no real credible evidence base. You can join an email networking group, which is extremely helpful to get questions answered in a timely manner, but has no scientific statistical evidence base. The third option is utilizing companies designed to assist in collecting data and comparing like units and centers with each other across the country.

There are a number of companies that offer benchmarking services including Olympus, Solucient and InforMed (in conjunction with VMG Health). I have found that you must read the data carefully and know what you are looking at. Determine what the data report means clinically and assess how that compares to your own area of practice.

If you do not know how your center compares to other, similar centers, you cannot gauge how to improve. As reimbursement decreases for gastroenterology procedures, endoscopy departments and freestanding facilities will need to improve their bottom lines by understanding what’s going on in the industry and adjusting their procedures appropriately.

Benchmarking can provide you with a number of helpful pieces of data:

• Who has a process that is adaptable to your own?
• Who is the most compatible for you to benchmark against?
• What is the best way for you to benchmark — is it through the telephone, email, or an electronic survey?

Nowadays, we all collect quality data every day and report it monthly and yearly for the hospitals or centers that we work for, and healthcare facilities are often considered data-rich and information-poor. Turning your data into useful information is key to the effective management of your gastrointestinal (GI) lab. By comparing our data with that of others across the country and sharing ideas with others through our vast networking opportunities, we create the best areas of care for our patients.

Benchmarking data can be an incredibly powerful tool when used correctly, but at the same time can be very confusing to the average person when they are not comparing “apples to apples.” You need to be able to assure that you are using the same data from one unit to another.

The units that are comparing with each other need to have the same characteristics, such as number of procedure rooms, billing practices, staffing guidelines, staffing mix, etc. This approach can help identify specific areas that are operating smoothly, as well as areas needing improvement.

Some of the items to determine when benchmarking include the following:

• number of cases 
• gross billings 
• net revenue 
• accounts receivable days 
• net income 
• operating income 
• staffing costs per patient 
• supply costs per patient 
• gross margin per patient 
• laundry and linen expenses 
• office expenses 
• telephone expenses 
• housekeeping expenses 

By breaking down the numbers into these subcategories, a center can determine, for example, if it is taking too long to bill patients and insurers, and if it is taking too long to receive reimbursement. The center can determine if it is overspending on staffing per patient, or on supplies. These indicators can guide the facility to change specific practices — joining a group purchasing organization to save money on supplies, or adjusting the flow of pre-procedure, procedure, and recovery to utilize fewer staffing hours.

Even if the center is profitable, there are always ways to improve the bottom line, and benchmarking is the best way to indicate the areas ripe for improvement. Reviewing static information from a single reporting period is helpful and a great first step. Evaluating the information period-to-period is also helpful in understanding trends and getting a clearer view of how the business is performing. However, the picture is not complete without putting it into a comparative context: How does this facility perform compared to other similar facilities?

Going Outside

“Benchmarking is a business management tool that enables effective users to understand how their operations compare to other similar facilities,” says Chad Coben, president of Informed Healthcare. “It is a comparable analysis. By benchmarking, or comparing the center’s numbers to other comparable entities, users can quickly identify areas where they are outperforming the market and areas where they might be underperforming.”

In fall 2006, InforMed released a comprehensive study of the financial and operating performance of outpatient endoscopy centers. The “Endoscopy Intellimarker” report is a comprehensive study containing financial and operational benchmarking metrics, comparable performance data, and other information related to the economics of single-specialty endoscopy centers.

The report covers a full year of performance, Coben points out. The current version includes data from 2005, and a report based on 2006 data became available in June 2007.

It’s easy to compare apples to apples, he adds, by grouping facilities based on size (based on the number of procedure rooms), by size based on case volume, by size based on net revenue, and other factors.

Ultimately, benchmarking publications serve as tools and resources for administrators and owners to use on their own, Coben points out.

“We think of it as a Level I analysis. We also can provide an array of consulting services that range from doing the analysis of their center for them, identifying the issues, and offering recommendations to bring them in line with industry, to more detailed operational consulting.”

What Data to Use

“Data collection should cover all clinical, operational and financial aspects of the GI enterprise, i.e., infection/morbidity/mortality rates; staff mix and retention, room turnaround, scope utilization, patient satisfaction; and average/ staff/supply cost per case,” observes Nancy Schlossberg, BSN, RN, CGRN, business development specialist, EndoSite Consulting Services, a division of Olympus America.

For example, view the difference in 2007 staff costs per procedure per facility type in the following chart, comparing an ambulatory surgery center (ASC) to an endoscopy-specific ASC and two hospitals.

“In the above example, multi-specialty ASC staff salaries likely aggregate more labor-intensive surgical procedures. The multi-specialty ASC should break out GI endoscopy cost per case to arrive at a true apples-to-apples comparison,” Schlossberg says.

“Greater procedure volume spreads out fixed costs, as illustrated in the above sample. Based on this example, a 9,000 case per year facility that has $300 in operating expense per case has great opportunities to implement a successful cost-savings program,” she adds. “Decreasing operating expense per case by even $25 in an effort toward meeting the $232 benchmark yields $6,000 in cost savings ($25 x 240 days).”

There is not a set number of centers to compare yours against. “The value of the input is in direct proportion to its accuracy and industry appropriateness. Centers should compare themselves to as many ‘like kind’ facilities as possible. Data remains just data, unless and until it is translated into useful information that relates to your facility and is within the context of GIindustry norms,” Schlossberg says.

Once you have the data, you need to interpret it in a way that will be useful. “The results can prove highly beneficial when evaluating your day-to-day operational activities or making strategic business and financial decisions. For example, how often should a facility replace endoscopes? Hang on to a scope too long and repair expenditures start to climb while your technology edge plummets,” she points out. “Olympus benchmarking 2006 comparative data revealed that the replacement timeframe for workhorse scopes varied from 5.5 years (colonoscopes) to 6.5 years (ERCP scopes). The average age of all scopes combined within a facility was 3.4 years. So, for example, if data showed an endoscope average age of seven years, the facility would want to compare the relationship between its repair expenditures and procedural volumes against a peer group to determine what impact the extended scope aging had on other aspects of operations.”

The modern healthcare industry focuses on pay-for-performance, best practices, evidence-based outcomes and similar measurements of success. Benchmarking serves as a “score card” and is the best method to litmus-test the efficiency and effectiveness of a facility’s operations, she adds. “Learning from others can help guide us in our decision-making and identify areas warranting improvements in quality, efficiency and productivity of physicians, staff, and overall clinical and financial operations. Benchmarking data challenges a facility to rethink preexisting assumptions.”

One example offered by Schlossberg is facilities that believe only a small number of GI facilities actually lease their equipment, or that nearly all of them lease their equipment. However, Olympus 2006 benchmarking results reveal a split almost down the middle, with about 54 percent of 2006 respondents purchasing their endoscopes, and the balance acquiring them under some sort of leasing arrangement. Not only that, but 55 percent acquired used equipment. By comparing this peer-level data, a facility can examine each strategy without bias for which has the best financial advantage.

A second example is using benchmark data to determine the proper scope mix for the facility. “Too many scopes and you have locked up excessive capital; too few and your scopes become over-utilized and your procedural volume is compromised,” Schlossberg observes. “Over the last few years, Olympus benchmarking results have demonstrated a migration toward increasing the number of workhorse scopes per procedure room. Specialty scope numbers remained unchanged. This data can help you evaluate your own scope mix, ensuring you get the most mileage out of your capital equipment budget.”

Simply finding the time to properly enter data often presents the greatest hurdle to the nurse manager, Schlossberg comments. To make data entry easier, it is important to select a benchmarking service that can maximize your convenience. “Here are 10 things to consider when evaluating a benchmarking supplier,” she says.

1. “What is the vendor’s privacy policy? You’ll be revealing highly sensitive financial, clinical and operational data and need to ensure your information is guarded with the utmost confidentiality.
2. Does the vendor provide GI-specific benchmarking services?
3. What type of GI data is collected? Data collection should cover all clinical, operational and financial aspects of the GI enterprise (infection/morbidity/mortality rates; staff retention, room turnaround, scope utilization, patient satisfaction; and average/staff/ supply cost per case, for example).
4. What is the size of the data pool, and how does it compare to other competitors?
5. Can the data be segregated and reported by facility type and size?
6. How long has the vendor been in the benchmarking business, and what is their expertise in the GI industry?
7. Does the vendor provide professional assistance to interpret the benchmarking findings relative to your facility? If so, what are the qualifications of their consultants?
8. How frequent are the benchmarking reports, and what are your participation responsibilities?
9. Are the reports customized for your facility (i.e., your data as compared to peer facilities)?
10. Does the vendor’s service include historical benchmarking, so that you can track your facility’s performance over time?”

With the ever-changing world of endoscopy and outpatient endoscopy centers popping up in more communities throughout the country, there will be a continuing need for these centers to have the ability to benchmark their facilities and make sure that they are comparing what they are doing with each other. We need to work together to provide the best care to our patient populations, no matter where they are served.

Catherine Collins, RN, BS, CGRN, is a nurse manager at Pitt County Memorial Hospital in Greenville, N.C

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