The Importance of Financial Benchmarking in Health Care

October 23, 2023

Financial benchmarking is a process of comparing the financial performance and practices of an organization with those of similar or leading organizations in the same or different industry.

If you're not benchmarking your performance against your competitors, you're just playing with yourself. — Allen Paison

Financial benchmarking can help health care organizations identify areas of strength and weakness, set realistic and achievable goals, monitor progress and outcomes, and learn from best practices. Some of the benefits of financial benchmarking in health care include:

• Improving the financial health and sustainability of the organization by reducing costs, increasing revenues, optimizing resource utilization, and enhancing cash flow management.
• Enhancing the quality of care delivery by aligning financial incentives with clinical outcomes, improving patient satisfaction, and reducing errors.
• Fostering a culture of continuous improvement and innovation by encouraging learning from peers, adopting evidence-based practices, and implementing changes based on data and feedback.
• Demonstrating value to stakeholders, meeting or exceeding industry standards, and achieving desired performance.

A long-standing frustration for The Hospital and Healthsystem Association of Pennsylvania (HAP) members has been that Pennsylvania hospitals do not have access to statewide financial benchmarking information.

To address this need, HAP has engaged the Center for Healthcare Solutions (CFHS, formerly known as The Healthcare Council of Western PA) as a strategic data partner. The statewide tool developed by CFHS is modeled on the FLASH survey and has been used by more than 60 facilities in the western part of the state since 2003.

We are pleased to report that this collaboration allows for the newly rebranded FLASH Survey i.e. CRAFT Survey (Collaborative Reporting Analytics for Financial Transparency) to be offered at a reasonable cost to all HAP members statewide. Hospitals who participate will have access to statewide data.

Reports are generated quarterly, with data reported by region, peer group, bed size and Medicare category. The reports are currently used by leaders for CRAFT comparisons and in board reports and meetings. The information will also be critical in supporting HAP advocacy on issues facing the hospital community.

For Pricing Overview and more Information:  Please contact me if you have any questions.