ViewPoints Blog

Wednesday, June 14, 2017 – 3 pm EDT

I recently had an opportunity to present to HFMA members in Tennessee on the topic of benchmarking and shared how one of our clients leveraged it to drive meaningful performance improvement for hospitals and health systems. To achieve that level of improvement, many variables must be in place.

Can you remember the last time you evaluated your hospital’s benchmarking tool? Many hospitals and health systems use the same performance management tool for a very long time, trusting that its capabilities adequately meet their organizational needs. And that’s just what some of the biggest hospital benchmarking vendors want you to believe, that the size of their database and their longevity in the market cements their value.

When it comes to strategic planning and marketing there’s an awful lot on the line for hospitals and health systems. And not a lot of wiggle room to miss the mark.

The statistics on hospital-owned physician practices are staggering. Between 2012 and 2015, hospitals and health systems acquired 31,000 physician practices. According to research published by the Physician Advocacy Institute, one in four physician practices is now hospital owned.

Increasing pressure on hospital finances, coupled with the unknown future of reimbursement, is driving many healthcare facilities to aggressively focus on identifying cost-savings opportunities. To stay ahead of those pressures and address challenges head on, organizations are looking at new ways to pursue performance improvement (PI) and find efficiencies throughout their systems. 

For hospital strategic planners, the notion of competition isn't limited to hospitals within close proximity. The push to build broader, diverse networks has coincided with the emergence of convenient care providers (e.g. retailers, urgent care centers, free-standing ED’s, etc.) and growth in the number of ambulatory surgery centers. These factors have all converged to redefine how strategic planners think about their market.

As the healthcare industry faces an uncertain future, most providers will tackle a reinforced imperative for efficient and effective performance as they prepare for an overall tightening of operating margins. As the industry works to address the realities and the uncertainties of the regulatory and market changes ahead, the success of their performance initiatives is ever more critical.