The analytical approach to benchmarking is more valuable than ever to your practice.

At some point in history someone was curious enough to ask, “I wonder how my business compares to others?” And with that question came the development of benchmarking, a method for comparing, measuring and creating a standard to help improve performance. Using benchmarking to identify opportunities to enhance performance is reason enough for owners and administrators to regularly use and review benchmark reports. Now, however, there is added benefit to benchmarking.

Undoubtedly, many have heard the term “big data.” This term describes a large dataset that can reveal patterns and trends; the user then attempts to correlate this information to predict behavior. Insurers and governmental agencies — such as CMS — use their datasets in this way. As many practices are experiencing implementation of the Merit-based Incentive Payment System (MIPS), such datasets are the basis for future payment methodology. Presently, we are in the early phases of the analytics approach, so many debates are going on about the right metrics to track, the correct formulas to use, and the understanding of cause and effect. Providers are already beginning to feel the impact of insurers’ efforts in this arena, and those with analytics experience through benchmarking can better position their practices with payers.

CASE STUDY: A LESSON IN BENCHMARKING BEYOND INTERNAL MEASURES

Several years ago, I worked with an ambulatory surgery center that received a “quality rating” of five (the worst) from a payer that published these ratings on a table on its website. The table listed ratings of the region’s ophthalmology surgery centers. In a nonconfrontational manner, we contacted the insurer to learn how the rating was determined, and to ask if we could review the center’s scoring methodology so we could improve. We discovered the rating was based on nothing more than total-claims-paid divided by members.

There are many flaws in a one-dimensional rating, not the least of which is the term “quality” when it only is a measure of resource use. Since the ASC executive director was familiar with benchmarking and analytical concepts, he was able to use his ASC information to educate the payer on clinical and business benchmarks. The center shared patient satisfaction ratings, readmission rates, clinical incidents and other measures. As a result of educating the insurer about a quantitative approach and the use of multiple measures to develop a quality rating, the insurer removed the (published rating table ) poor rating from the site and worked with the ASC to develop a report card of surgery centers.

EXPECT ERRORS AND PROTECT YOUR PRACTICE

In 2015, Medicare began releasing payment information by provider (data from 2012). One take-away: Retinal physicians performing intravitreal injections were spotlighted as potential excessive billers. Because the CMS payment information included the injectable drug reimbursement without consideration of the cost of such drugs, the conclusion being drawn from the information was faulty. Physicians can expect that there will be similar assumption errors as datasets and ratings are released. As a result, they must be ever vigilant in their review of payer activities, especially as it relates to their reputations.

It is critical for practices and ASCs to gain experience with statistics and analytical review to reach success. Not only is benchmarking the fundamental element in continuous improvement, it helps better acquaint managers and physicians with analytical data, formulas and the impact of results — all of which enable leaders to educate and work with payers, as demonstrated in the above ASC case study.

The next step is reporting into national benchmarking databases to ensure comparable industry data so everyone can better understand industry trends.

GETTING STARTED

To someone who has never completed a benchmarking exercise, the initial task may seem daunting. To begin, I recommend that a practice simplifies the process by selecting only a few measures. Once a subset of benchmarks is mastered, you can expand reporting to include a new subset. Probably the easiest and most commonly measured benchmarks relate to operating efficiency and use of a practice’s standard income statement. To the right is a table of efficiency measures and industry standards that represent the 25^th to 75^th percentile of all comprehensive ophthalmic practices.

In analyzing the information in this table, you can see how important definitions and formulas become in comparing one practice to another. This simple exercise usually results in financial managers realizing how to better build financial statements so they can easily monitor these benchmarks each month.

RESOURCES

Fortunately, both new and experienced managers just learning benchmarking have many resources (from articles and books to industry databases) available to them. Below is a description of the industry databases available.

• AcadeMetrics offers both general and salary benchmarks to AAO and AAOE members. The benchmarking survey is conducted during a specific period each year and members report on a full year’s worth of data.
• OOSSMark is offered through membership in the outpatient Ophthalmic Outpatient Surgery Society (OOSS). In addition to business and salary benchmarking information, this ASC benchmarking tool includes clinical data that may be useful in Quality Assurance and Performance Improvement programs as well as a center’s accreditation survey.
• ASOAnalytics offers business and salary benchmarks. Launched at this year’s annual American Society of Ophthalmic Administrators (ASOA) meeting in Los Angeles, the biggest difference in this web application is that the topical surveys are short, can be updated at any time, and the reports are immediately available online once enough participants have completed surveys.

DATA-DRIVEN FUTURE

Benchmarking has always been valuable in the improvement process, but now it is even more helpful in understanding how payers perceive providers. Sharpening one’s analytical skills will help leaders to best position their practices and ASCs for future success. OM

REFERENCE

1. Benchmark ranges are the standards established by BSM Consulting, working with ophthalmic practices throughout the country, and corroborated with industry databases.

Maureen Waddle is a senior consultant with BSM Consulting, an internationally recognized health-care consulting firm headquartered in Incline Village, Nev. and Scottsdale, Ariz. For more information about the author, BSM Consulting, or content/resources discussed in this article, please visit www.BSMconsulting.com