The Process of Benchmarking
In order to be competitive in health care markets, organizations must ensure that the services they provide are consistent in pricing and quality with other comparable organizations. In this Discussion, you will examine how the process of benchmarking, or comparing organizations, is important in financial decision making.
To prepare:
Review the information on benchmarking found in this week's Learning Resources.
Search the Walden Library or other reliable resources on the Internet and locate a journal article discussing how a health care organization has used the principle of benchmarking.
How could the concept of benchmarking be used in your own organization (or one with which you are familiar), regardless of size?
Consider how benchmarking could be useful to you in decision making.
Analyze the potential risks of making a faulty comparison.
Post a summary of the article you found (including the APA reference) and explain how it informed your understanding of benchmarking.
Discuss how benchmarking could be used for financial decision making in your own organization (or one with which you are familiar). Also analyze the potential risks of making comparisons with an organization that is not a credible match with your own.
And
Respond to at least two of your colleagues on two different days. Comment on a colleague with different options than your own. Describe what you like about their options and if you agree with their rankings. Justify your answers.
(I will send the responses soon)
Required Readings
Baker, J., & Baker, R. W. (2014). Health care finance: Basic tools for nonfinancial managers (4th ed.). Burlington, MA: Jones and Bartlett Learning.
Chapter 13, "Trend Analysis, Common Sizing, and Forecasted Data" (pp. 143-155)
The focus of this chapter is the use of trend analysis and forecasting to develop future budgets and make financial decisions about capital purchases, programs, and personnel.
Chapter 14, "Using Comparative Data" (pp. 157-169)
In this chapter, you are introduced to the criteria for identifying other health care organizations that are comparable to your own. Data from these organizations can then be used to evaluate your own organizational performance.
Chapter 18, "Estimates, Benchmarking, and Other Measurement Tools" (pp. 215-224)
In this chapter, you continue exploring the concept of financial benchmarking. The chapter focuses on the importance of benchmarking for identifying performance gaps.
Zelman, W., McCue, M., & Glick, N. (2009). Financial management of health care organizations: An introduction to fundamental tools, concepts, and applications (3rd ed.). Hoboken, NJ: Jossey-Bass.
Retrieved from the Walden Library databases.
Chapter 5, "Working Capital Management" (pp. 187-231)
This chapter examines the concept of working capital. The authors explore the specifics of current assets and the management of the working capital cycle.
Chapter 11, "Responsibility Accounting" (pp. 468-497)
Review: This chapter explores the trend toward the decentralization of health care organizations and the challenges this presents. This chapter also describes responsibility centers, or organizational units intended to achieve specific tasks.
Mulva, S., & Dai, J. (2009) Health care facility benchmarking. HERD, 3(1), 28-37.
Reprinted by permission of Sage Publications via the Copyright Clearance Center.
This article describes a national health care facility's benchmarking program. It is designed to compare measures of capital project performance.
Agency for Healthcare Research and Quality. (2013). Measuring and benchmarking clinical performance. Retrieved from www.ahrq.gov
Ettorchi-Tardy, A., Levif, M., & Michel, P. (2012). Benchmarking: A Method for Continuous Quality Improvement in Health. Healthcare Policy, e101-e119. Retrieved fromhttp://www.ncbi.nlm.nih.gov/pmc/articles/PMC3359088/
Document: Week 10 Application Assignment Template (Excell Spreadsheet)
Required Media
Laureate Education (Producer). (2012). Expense forecasting. Baltimore, MD: Author.
Note: The approximate length of this media piece is 5 minutes.
In this video, Dr. William Ward discusses expense forecasting and demonstrates how to perform trend analysis, staff forecasting, comparative data analysis, and capacity forecasting.
Accessible player
Laureate Education (Producer). (2015). Week 10 Application Assignment Tutorial: Benefit Cost Ratio. Baltimore, MD: Author.
Laureate Education (Producer). (2015). Week 10 Application Assignment Tutorial: Breakeven Analysis. Baltimore, MD: Author.
Laureate Education (Producer). (2015). Week 10 Application Assignment Tutorial: Expense Forecasting. Baltimore, MD: Author.
Laureate Education (Producer). (2015). Week 10 Application Assignment Tutorial: Profit and Loss Scenario. Baltimore, MD: Author.
Optional Resources
Hurlock J. (2012). Get to know Excel 2010: Create your first spreadsheet. Retrieved from http://office.microsoft.com/en-us/excel-help/get-to-know-excel-2010-create-your-first-spreadsheet-RZ101773335.aspx
Goodwill Community Foundation, Inc. (n.d.). Excel 2010. Retrieved from http://www.gcflearnfree.org/excel2010.