Episode 17: Do You Even Lift – Looking At The Metrics Used For External Benchmarking with Oscar Santalo and Joanna Longueira

Definitions

1. Benchmarking – Finding and implementing the best practices.  Health-system administrators are turning to benchmarking vendors for help in improving operational performance
2. Efficiency – Avoiding waste or maximizing possible outputs from a set of resource inputs
3. Productivity – defined as the efficient use of resources, labor, capital, land, materials, energy, information, in the production of various goods and services.
4. 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.
5. Diagnose Related Group – DRG- patient classification scheme which provides a means of relating the type of patients a hospital treats (specific to drugs)

Background

1. Goal is to find and implement the best practices of peer organizations
2. Vendors without expertise in pharmacy practice often sell benchmarking metrics that ultimately result in the downsizing of pharmacy departments and services
3. Goal is to find and implement the best practices of peer organizations
4. Vendors without expertise in pharmacy practice often sell benchmarking metrics that ultimately result in the downsizing of pharmacy departments and services

Major End Points

1. 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)
2. Metric examples
   1. Cost-based ratios – Total Cost per adjusted discharge, Labor cost per adjusted discharge
   1. Labor Productivity ratios – Hours worked per CMI discharge, FTEs per order processed
3. Using DRG versus CMI in your weighted scores

1. Pharmacy Intensity Score (PIS) Formula
2. Σ(DRG intensity weights x DRG volumes)/ Total Admissions = Pharmacy Intensity Score
3. PIS uses pharmaceutical resource consumption data to produce DRG-specific drug-use
   1. (0.1 to 100; DRG with highest median drug cost per admission assigned value of 100)

Summary

1. Strategies for selecting a vendor à meaningful peer comparison group and accuracy of financial data
2. 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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