What’s driving cost and quality variations in your healthcare organization? Axiom™ Enterprise Decision Support monitors and analyzes your data to identify unfavorable trends, so you can take action to improve quality and cost outcomes in your organization.
In this example of a hip replacement cost analysis, see the seven steps to performance improvement with Axiom Enterprise Decision Support:
Healthcare benchmarking is the process of comparing one hospital, department, service line, provider group, or other dimension with another for the purpose of quality improvement. By understanding the hospital benchmarking data for one particular measure, a hospital can determine where it stands in relation to peer organizations and undertake an improvement initiative, if necessary.
Quality improvement projects could result in higher profits, lower hospital readmissions or hospital-acquired infections, higher physician productivity, or lower labor or supply costs per adjusted discharge. Every hospital has its unique strengths and weaknesses, so the types of improvement efforts will vary by facility.
Benchmarking in healthcare allows hospitals to compare themselves to best-in-class facilities, hospitals with similar attributes such as bed size, and hospitals in their local or regional area. It also allows hospitals to determine how they stack up against other providers on standards set by the Centers for Medicare and Medicaid Services (CMS) and other regulatory agencies.
Healthcare benchmarking datasets include:
Benchmarking is a critical tool to help organizational leaders make the right strategic choices, remove risk from decision-making, and defend the validity of actions/inactions through the effective use of data. Ultimately, the purpose of healthcare benchmarking is to improve efficiency, quality of care, outcomes, and the patient experience. To do this, financial, operational, and clinical benchmarks should be used throughout the organization to help pinpoint sources of concern and opportunities for growth.
Financial benchmarks are important because they paint a picture of the financial health of the organization, such as your ability to leverage cash or credit positions. Operational benchmarks are important because they measure resource utilization. And finally, clinical benchmarks are important because they measure care outcomes. Different type of benchmarks are important for different audiences, but together, financial, operational, and clinical benchmarks give healthcare leaders, clinicians, and physicians a multi-dimensional view of performance that can help reduce costs, improve outcomes, and better serve the community.
Healthcare benchmarking gives leaders the confidence to know the direction the market is moving and their position in relation to best-performing hospitals, peer hospitals, and local and regional competitors. Benchmarking data can identify how far a hospital needs to go to reach a particular goal, where competitors have an advantage, and where a hospital outpaces others.
No hospital can be best in class on every measure, so benchmarking is a balancing act that begins with determining a baseline metric for a particular measure before embarking on any improvement initiative. Savvy hospitals start in areas with the most upside potential, such as cost savings, quality improvement, or revenue increases.
Types of benchmarking include:
The biggest challenges in hospital benchmarking include finding suitable external data sources and ensuring external data can be effectively integrated with internal data to produce meaningful comparisons.
Many hospital leaders believe their organizations are unique and beyond comparison. Within the world of benchmarking, however, the idea is not to find an exact match. Instead, organizations want multiple comparison groups that provide a range of metrics that show performance against internal benchmarks and help identify potential new performance opportunities.
Even hospitals in the top quartile of national or regional benchmarks cannot be complacent. Being at the highest performance level does not mean that the journey is over; it means less distance to travel.
Healthcare leaders should look to the largest data sources — in terms of the number of hospitals, departments, and physicians — that are updated at least monthly. Quarterly data updates are not sufficient to capture true performance against static benchmarks. Also, is this a data source that you trust? Ask peer organizations about their data sources and look to healthcare consulting companies to see where their data comes from.
The power of benchmarking occurs when hospitals study how other organizations achieve top performance levels and then adapt those strategies for their own use.
Every hospital will have different healthcare benchmarking priorities based on its unique strengths and weaknesses. Healthcare benchmarks are determined by deciding which department or service line to focus on, establishing a baseline of performance in that area, and then finding peer information to see where you stand against similar hospitals. The first focus areas should be the ones where an improvement project would have the most significant impact (e.g., the low-hanging fruit).
As hospitals move from benchmarking as a comparison exercise toward benchmarking as a process to take them to best-practice status, keep these strategies in mind:
Hospital benchmarking can incorporate innumerable measures across every department, but at the executive level, these are the top hospital finance and operational benchmarks that should be tracked at different levels, including provider, department, hospital, and health system.
Axiom™ Comparative Analytics features the most robust and complete dataset in the industry, including data from more than 1,000 hospitals, 6,000 benchmarks, 135,000 physicians, 130 physician specialties, 350 departments, and 100 job classes updated each month.
External comparison data is refreshed monthly and available when month-end close concludes, providing healthcare providers with the industry’s most timely access to current financial analytics.
Features include:
Independent analysis from Hobson & Company shows that Axiom Comparative Analytics delivers significant efficiencies and return on investment (ROI). The potential cost savings or revenue enhancements can be substantial. A Midwestern hospital with 200-299 beds saved $1.1 million by improving surgical productivity per equivalent patient day. A similar-sized hospital in the West saved $1.2 million by decreasing ICU spend per equivalent patient day by 12%.
Comparative Analytics uses a uniform classification process to compare data and eliminate the burdens of data normalization and submission, cutting by 50% the time spent on reconciling, loading, and normalizing data
Axiom Comparative Analytics brings actionable intelligence to hospital decision-making
Chicago – August 24, 2021 – The Healthcare Financial Management Association (HFMA) today announced that, following rigorous review, Syntellis Performance Solutions has once again achieved the “Peer Reviewed by HFMA®” designation for its suite of Axiom Healthcare solutions.
Syntellis’ Axiom Healthcare Suite helps streamline and improve traditional finance processes with integrated strategic planning tools built on the company’s deep healthcare expertise.
A healthcare or hospital budget is an estimation of revenue and expenses over a specified timeframe. Through the healthcare budgeting process, health systems come to an understanding of how much funding must be planned in certain areas, including operating costs and capital equipment. A health system may include hospitals, physician groups, skilled nursing facilities, home care services, foundations, and a variety of other business types. During the budgeting process, leaders must account for key components of planning in healthcare, including volume growth assumptions, feedback and input from key stakeholders, and the ability to adjust when inputs and circumstances change. Ultimately, a well-planned budget allows health systems to plan appropriately for the future in order to provide quality care.
There are several types of budgets and planning processes in healthcare:
Healthcare is a rapidly changing industry that must continuously adapt as new patient needs emerge, technologies and techniques are updated, and reimbursement models evolve. A strong healthcare budgeting process allows leaders to plan for the future and establish priorities around care and clinical departments. A healthcare budget is an important tool to understand where funds are best spent and how to allocate capital among various departments and projects. This enables healthcare organizations to be more efficient in delivering effective and efficient patient care.
Healthcare budgeting is critical for decision-making across health systems and organizations. An effective budget process allows healthcare leaders to:
Because of the rapidly changing nature of the healthcare industry, health systems and hospitals face many budget-related challenges, including:
Beyond factors within a health system’s control, a variety of external factors can affect a healthcare budget, including:
The process of healthcare budgeting differs based on your planning approach, be it traditional budgeting or rolling forecasting.
The traditional healthcare budgeting process typically involves budgeting software that incorporates historical data, inputs, and assumptions. Healthcare leadership reviews relevant data in the system from across all clinical services and departments.
The budget is then routed for input, updates, and approval from a variety of stakeholders. Ultimately, this process results in a budget that applies to a static period of time (such as a calendar year, Jan. 1 through Dec. 31).
Rolling forecasting is a planning approach that allows healthcare leaders the flexibility to use historical data to predict future performance. Essentially, it answers the question, “How has the previous month or quarter changed our view of the present and future?”.
Unlike a traditional budget, which is based on static, annual data, rolling forecasts use current data to update near- and long-term projections. Based on rolling forecasts, leaders can quickly adjust strategy as financial conditions change, examine current expenditures and initiatives, and make strategic decisions about future endeavors.
Here’s how the process generally works:
With this process, leaders can create forecasts for six to 12 quarters, rather than only 12 months.
To avoid common budgeting struggles, healthcare organizations can simplify the planning process with these tips:
Axiom™ Budgeting software incorporates best practice budget methodologies designed to support efficient, accurate, and transparent budget development. It integrates with all major enterprise resource planning (ERP) systems and can be incorporated with your existing financial planning and analysis (FP&A) process. With Axiom Budgeting, healthcare leaders can easily model the impacts of volume, rate, and efficiency assumptions across revenue and expense plans with multiple versions or scenarios. Create an accurate and transparent budget utilizing integrated internal and external benchmarking data, as well as information from the general ledger, payroll, hospital/physician billing, and other systems.
Axiom™ Rolling Forecasting allows for the integration of rolling forecasts with long-term financial plans to support strategic and tactical planning success. Multiple configurations and settings support a monthly or quarterly forecast spanning up to 12 quarters or 36 months.
Hobson & Company, a third-party research organization focused on total cost of ownership and ROI studies, found that Axiom FP&A suite delivered:
75% less time reconciling data and creating budgets
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75% faster budget reporting
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