Definitions
- Benchmarking – Finding and implementing the best practices. Health-system administrators are turning to benchmarking vendors for help in improving operational performance
- Efficiency – Avoiding waste or maximizing possible outputs from a set of resource inputs
- Productivity – defined as the efficient use of resources, labor, capital, land, materials, energy, information, in the production of various goods and services.
- Case Mix Index – is the average relative DRG weight of a hospital’s inpatient discharges, calculated by summing the Medicare Severity-Diagnosis Related Group (MS-DRG) weight for each discharge and dividing the total by the number of discharges.
- Diagnose Related Group – DRG- patient classification scheme which provides a means of relating the type of patients a hospital treats (specific to drugs)
Background
- Goal is to find and implement the best practices of peer organizations
- Vendors without expertise in pharmacy practice often sell benchmarking metrics that ultimately result in the downsizing of pharmacy departments and services
- Goal is to find and implement the best practices of peer organizations
- Vendors without expertise in pharmacy practice often sell benchmarking metrics that ultimately result in the downsizing of pharmacy departments and services
Major End Points
- Selecting an external benchmarking system: Select a meaningful peer comparison group, select the most meaningful key indicator metrics for comparing performance with that of peers, Understand the limitations of commercially available systems (see complete list in article)
- Metric examples
- Cost-based ratios – Total Cost per adjusted discharge, Labor cost per adjusted discharge
- Labor Productivity ratios – Hours worked per CMI discharge, FTEs per order processed
- Using DRG versus CMI in your weighted scores

- Pharmacy Intensity Score (PIS) Formula
- Σ(DRG intensity weights x DRG volumes)/ Total Admissions = Pharmacy Intensity Score
- PIS uses pharmaceutical resource consumption data to produce DRG-specific drug-use
- (0.1 to 100; DRG with highest median drug cost per admission assigned value of 100)
Summary
- Strategies for selecting a vendor à meaningful peer comparison group and accuracy of financial data
- Vendors may use different formulas and knowing which formulas to avoid
Reference
Steve S. Rough, Michael McDaniel, James R. Rinehart, Effective use of workload and productivity monitoring tools in health-system pharmacy, part 1, American Journal of Health-System Pharmacy, Volume 67, Issue 4, 15 February 2010, Pages 300–311, https://doi.org/10.2146/ajhp090217.p1
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