JOHN R. LEWIS: HMC BENCHMARKS BASIS OF COST REPORTING

Q: What has been your involvement with HMC?

A: I am currently in my second year serving as Program Coordinator for Rex Healthcare. We use the benchmarks extensively for a variety of internal reports and analyses. The benchmarks form the bases of our cost reporting for our service lines, and we also try to work with the network to fill in the gaps with qualitative analysis.

Q: In what types of reports and analysis have you utilized benchmark data received-to-date?

A: Rex uses HMC benchmarks for quarterly cost reports which we provide each service line. We also use the benchmarks to highlight opportunities in functional areas and in individual DRGs. We then developed numerous action teams to look for ways to reduce clinical excess. In addition, we've adapted the Clinical Service Review to use as an element of a newly developed Physician Practice Pattern Report which compares individual physician resource utilization with the benchmark targets.

Q: What hospital initiatives have you started as a result of your benchmark reports?

A: In addition to the initiatives I have already mentioned, we are using the Span of Control as a guideline for reorganizing our management structure.

Q: What are your goals for these hospital initiatives?

A: Our overall goal is to close the gap between our costs and the targets. Over the long run, we would like to tie our budgets to the benchmarks and cost improvement goals.

Q: Given your current initiatives and goals, are there any areas you would like to explore with Partners reading this newsletter?

A: I would like to explore ways of pinpointing differences between our cost structure and the target hospitals. It is helpful to separate excess into ancillary and floor, but it would be even better to isolate the excess to particular functional areas. As a separate goal, the inefficiencies in functional areas inflate clinical costs. I would like to be able to separate ancillary excess into excessive utilization versus inefficient service delivery. After all, if a department cannot deliver its services efficiently to the service lines, the department should be held accountable, not the service line.