Analyze This
Regional information and well-adapted data from national surveys guide James Gardner, MD, chief medical executive for Pro Health Care Inc., a two-hospital system just west of Milwaukee, when he’s hiring new hospitalists at 300-bed Waukesha Memorial Hospital or launching a new HM program at the system’s smaller, rural facility. In fact, Dr. Gardner currently is weighing options to expand the HM service at 80-bed Oconomowoc Hospital, less than a year after the program started.
“We like to look at a number of sources of data. The MGMA and SHM survey data, historically, have been two of our preferred sources,” Dr. Gardner says. “I think we tend to look at more regional data from the Midwest because the national data varies so much.
“We try to get a sense as to what our local market is.”
Dr. Gardner says he’d like to see a “couple years” to confirm the validity of the new SHM-MGMA report. That said, he says he knows how useful the data can be in regard to benchmarking hospitalist productivity.
“It’s been very helpful; it helps us know where we are at,” Dr. Gardner explains. “It’s one of the guideposts to decide when we are approaching the need for additional resources, whether that is midlevel providers or full-time hospitalists.”
Advice From a Numbers Guy
A self-described “numbers” guy, Dr. Ahlstrom agrees regional data is just as important as, if not more important than, the national numbers. He stresses knowing your market, your competitors, your hospital culture—and using that information along with the benchmarking data to formulate expectations for your group.
“Oftentimes you are measured against the guy next door,” Dr. Ahlstrom says. “You have to know the numbers, because [administrators] are going to know the numbers.”
Dr. Ahlstrom offers these tips for incorporating benchmarking data into your practice:
- Know your local market. “If you keep in mind your local needs, then you can look at the data and start to evaluate what parts are going to help you better formulate a practice that brings on the right people, does the right work, and continues to produce the amount of workload and compensation that makes sure they are happy in the future,” he says.
- Evaluate how applicable the data is. Pay attention to the total number of survey respondents in each category, and the standard deviation around the mean. “In other words, what is the central tendency of the data? You might find data in subsections that you find interesting, but it might not be data that has a central tendency,” he says. “Find data sets that are most applicable to your practice while assessing variations from the larger data sets. Consider how and why your practice might vary from the report as part of your evaluation.”
- Pick out trends and look at them in total. The key is to avoid looking at data points in isolation. “It’s important to look at trends in the data over time, and pick out where those trends are going to go,” he says.
- Involve your people. “I think that this data being available from the [provider] side and management side is a good thing,” Dr. Ahlstrom explains. “The more we are involved in understanding the trends in HM, the better we are going to plan where we are going in the future.” TH
Jason Carris is editor of The Hospitalist.
Benchmarking Basics
By Jeffrey B. Milburn, MBA, CPME
Benchmarking brings perspective and relevancy to practice issues and can serve as a guide to making effective business decisions. Along with looking at financial trends and ratios, benchmarking is one of the most important techniques well-managed practices use.
What is benchmarking? Whether you are measuring physician productivity or a practice’s financial performance, benchmarking is essentially the comparison of your data to a select peer group.
Why should my practice benchmark? Practice administrators and physician leaders frequently utilize national surveys to “benchmark” hospitalist compensation and production. A practice wants to pay market-level compensation in order to recruit and retain physicians, and also set reasonable production goals for the physicians. For legal and regulatory reasons, hospital executives want to ensure that compensation does not exceed “fair market value.”
How do I benchmark my practice? Benchmarking generally falls into two broad categories: internal and external. Internal benchmarking in a hospitalist practice might be the comparison of the number of patients seen by individual physicians during the standard weekday shift. In addition to developing your own internal data, outside sources include such surveys as the State of Hospital Medicine: 2010 Report Based on 2009 Data published by SHM and MGMA. External benchmarking would be the comparison of patients seen by practice physicians on an annual basis to their hospitalist peers across the nation, as reported in surveys.
What about hospitalist production? Depending on the physician compensation plan, there usually is a strong relationship between the level of compensation and production. When benchmarking hospitalist production, it is important to select the appropriate benchmark for comparative purposes.
Comparing gross charges from practice to practice has little value, since there is no standard methodology for setting charges. On the other hand, work RVUs is a fairly standard metric for measuring physician productivity internally and externally. The work RVUs data are generally reported in the major surveys.
Some hospitalist practices use survey benchmark data adjusted annually to determine how much physicians are paid per unit of productivity. For example, if median survey compensation is $225,000 per year and median work RVUs are 4,000 per year, the practice would pay $56.25 per work RVU to the physician. In this case, the practice has benchmarked both compensation and productivity to arrive at a value per work unit.
What does benchmarking mean for my practice? Benchmarking is a critical component to operating a successful medical practice. Use care in utilizing benchmarks, however. Rather than assuming that your practice’s variance from survey norms means you need to change, evaluate the underlying data to determine if there is a logical reason for the variance related to your practice’s specific circumstances.
Practices that utilize peer group data to benchmark often identify operational concerns and work to make their practices more effective. It has been said you can’t manage what you can’t measure, and benchmarking brings perspective and relevancy to what you measure.
