The Concept of "benchmarking"

Bus Strategy & Policy

6/3/13

The concept of "Benchmarking"

Benchmarking is an excellent tool for companies who wish to improve their Product Innovation performance. It enables companies to zero in on specific problems, isolate high value improvement opportunities, and identify strengths that should be preserved. The process of benchmarking itself engages key stakeholders in consensus building.

An example of benchmarking can be seen in health care. In determining which practice is best, one is faced with decisions such as whether or not a practice that reduces cost while maintaining quality and speed is preferable to a practice that increases quality while maintaining cost and speed. Similar decisions confront anyone who attempts to benchmark health care practices, in which the quality of patient care and the cost of services are both important but may often appear to be in conflict.

Another example of benchmarking in health care would be practices leading to the shortest length of stay and the lowest mortality rate for patients with pneumonia, to reduced costs and improved outcomes for patients with congestive heart failure, and to reduce costs and length of stay for patients undergoing coronary artery bypass grafting. Studies are frequently initiated by hospitals and third-party payers to discover the most cost-effective way of delivering health care to the patient while improving or at least maintaining a standard of quality for patient care and outcomes. Other areas related to drug utilization have also been the focus of pharmacy benchmarking efforts, including prescribing patterns and the cost of therapy by diagnosis related group, reporting of adverse drug reactions, and drug-use-evaluation practices. In a broad sense, benchmarking encourages pharmacists to evaluate their performance on a variety of levels by providing them with a set of measures for making comparisons with peer hospitals and hospitals identified as leaders in the field, or benchmark hospitals. Using these set of data can help compare to other hospitals and see where they stand year to year. Promotes changes and delivers improvements in quality, productivity and efficiency; which in turn bring innovation and competitive advantage. Is a cost effective and time efficient way of establishing a pool of innovative ideas from which the most applicable practical examples can be utilized.