Beyond your own walls: Why benchmarking against peers is essential for growth

In the complex and constantly evolving world of healthcare, it's easy to become focused on our own internal processes, metrics and challenges. We meticulously track our data, celebrate our wins and work tirelessly to solve problems within our own walls. While this internal focus is vital, it can also create a silo. Without looking outward, how do we truly know how we're performing? Are our goals ambitious enough? Are there opportunities we're missing?

This is where the power of benchmarking comes in. For revenue cycle departments, benchmarking isn't just a "nice-to-have" analytics exercise; it's an essential strategy for survival, growth and achieving excellence in a value-based care environment.

What is benchmarking in the revenue cycle?

At its core, benchmarking is a systematic process of comparing your organization's performance metrics against those of other, similar organizations. It’s about looking "over the fence" to see how your peers are doing, not for the sake of simple comparison, but to gain valuable context, identify best practices and uncover opportunities for strategic improvement.

For clinical documentation integrity (CDI) and coding, this means looking at key performance indicators (KPIs) like:

• Case mix index (CMI): Is your CMI in line with, above or below that of hospitals with a similar patient population and service lines?
• CC/MCC (Complication or comorbidity and major complication or comorbidity) capture rates: How effectively are your physicians documenting and capturing the full severity of your patients’ illness?
• Length of stay (LOS): How does your observed geometric mean length of stay (GMLOS) compare to the expected LOS for your DRGs (diagnosis related groups)? Are there variances that point to documentation opportunities?
• Query rates and types: Are you querying at an appropriate rate, and are your queries leading to improved documentation?
• Coding efficiency: How efficient is your coding team compared to industry standards?

Why looking beyond your walls is non-negotiable

Relying solely on internal data is like navigating with only one landmark in sight. You know where you are relative to that single point, but you have no idea what the broader landscape looks like. Benchmarking provides a complete map by:

1. Providing crucial context: You might be proud of a 5% increase in your CMI over the last year, but what if your peers, with a similar patient mix, saw a 10% increase? Benchmarking provides the context to understand whether your improvements are keeping pace with the industry or if there's a larger opportunity you're not capturing. It helps you distinguish between good performance and great performance.
2. Identifying gaps and opportunities: Benchmarking data is a powerful diagnostic tool. A lower-than-average capture rate compared to your peers might highlight a need for more targeted physician education. A consistent variance between your observed and expected LOS for a specific DRG could signal a documentation gap, a comorbidity that isn't being captured, or a post-acute care coordination issue that other hospitals have successfully addressed. These insights allow you to focus your resources where they will have the most impact.
3. Helping set realistic and ambitious goals: How do you set your department's goals for the upcoming year? Are they based on incremental improvements over last year's performance, or are they informed by what the top-performing organizations are achieving? Benchmarking allows you to set data-driven goals that are both challenging and attainable, pushing your team toward excellence.
4. Driving financial performance and integrity: Accurate documentation and coding are the bedrock of a healthy revenue cycle. Benchmarking ensures your CMI accurately reflects your patient population’s acuity, which directly impacts reimbursement. By identifying and closing documentation gaps highlighted by peer comparisons, you not only improve revenue integrity but also reduce compliance risk.
5. Enhancing quality of care: At the end of the day, CDI is about ensuring the clinical record tells the complete and accurate story of the patient's journey. When documentation is precise, it improves communication among care teams, supports quality metrics and leads to better patient outcomes. Benchmarking against top performers helps you adopt the best practices that underpin this level of clinical accuracy.

Taking the first step

Getting started with benchmarking doesn't have to be an overwhelming process. It begins with a commitment to looking outward and asking the tough questions.

• Identify your peers: Who are you competing with? Look for peer groups of a similar size, teaching status and with comparable service lines.
• Gather your data: Start with the core KPIs. What is your CMI, CC/MCC capture rate and LOS performance?
• Seek comparative data: Utilize data and partner with others to gain access to anonymized, aggregated peer data.
• Analyze and act: Develop targeted education, refine workflows and set new goals based on what you've learned.

In today's healthcare environment, we can no longer afford to operate in a vacuum. The challenges of value-based care, reimbursement pressures and the drive for higher quality demand that we learn from one another. By looking beyond your own walls, you can leverage the collective wisdom of your peers to elevate your performance, drive meaningful change, and ultimately, build a stronger, more resilient organization.

Jannifer Owens, MSA, BSHA, CCS, is an analytics content manager with Solventum.