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Chapter 43 : Laboratory Benchmarking

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Abstract:

Benchmarking is necessary if your laboratory is licensed or accredited by an accrediting organization. This chapter discusses the reasons for undertaking benchmarking. It reviews the types of benchmarking activities and where to find benchmarks. The chapter discusses the general approach to the most common type of benchmarking-financial benchmarking for productivity and cost. It also discusses the specific approaches to internal and external benchmarking. The chapter talks about the interpretation of internal and external benchmarking data. There are several possible approaches to financial benchmarking. There are two types of formal external benchmarking approaches. A focus on a global goal, rather than on multiple smaller departmental goals, allows the reader the opportunity to make an upfront investment in one area with the aim of achieving eventually much lower overall costs. Networking and membership in leading laboratory organizations is an excellent way to find relevant benchmarks. A number of the programs for laboratory managers at the 2003 Clinical Laboratory Management Association (CLMA) national meeting included the word “benchmark” in their title, and many other programs referenced benchmarks even though the word was not in the title of the program.

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43

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Figures

Image of Figure 43.1
Figure 43.1

Control chart for internal benchmarking. The parameter depicted is billable tests, followed over time. Upper and lower control limits are statistical parameters that can be set at any desired value (e.g., ± 1, 2, or 3 standard deviations around the mean). The data are plotted by quarter over a period of 3 years. Note that the laboratory has achieved a steady increase in billable tests beginning in the first quarter of 1995. The trend is going in the desired direction, but it is important to understand the reason(s) for the change. Compare with Fig. 43.2 and 43.3 . Data adapted from a report provided to a participant in the LMIP of the CAP.

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
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Image of Figure 43.2
Figure 43.2

Control chart for internal benchmarking. The parameter depicted in this chart is paid hours, followed over time. Note that a dramatic increase in paid hours was recorded in the first quarter of 1995, after which the number of employees stabilized. Such a large increase in personnel might appear undesirable, but it must be understood in the context of other changes in the operations of the laboratory. Compare with Fig. 43.1 and 43.3 . Data adapted from a report provided to a participant in the LMIP of the CAP.

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
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Image of Figure 43.3
Figure 43.3

Control chart for internal benchmarking. The parameter depicted in this chart, billable tests per FTE, is the product of the changes depicted in Fig. 43.1 and 43.2 . Despite the dramatic increase in FTE in the first quarter of 1995, the productivity of the laboratory steadily increased. Plotting the ratio tells a more complete picture than viewing only the components would allow. Data adapted from a report provided to a participant in the LMIP of the CAP.

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
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Image of Figure 43.4
Figure 43.4

Percentile graph of billable tests for an institution for a single time period. The results of the participant laboratory can be compared with (i) all the laboratories in the database, (ii) all participating laboratories in the same region, (iii) a group of laboratories selected (from a list of participating laboratories) by the participant, (iv) a “fingerprint cluster” of laboratories that were closest to the participant by statistical analysis (performed by the program), and (v) the two closest matches to the participant. Notice that the participant laboratory is an outlier when compared to other laboratories in the program as a whole and in the region, but it falls into a similar range with more closely matched laboratories, whether they were self-selected or chosen by the program. There are obvious advantages to having multiple comparison groups from which to draw conclusions. Data adapted from a report provided to a participant in the LMIP of the CAP

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
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Image of Figure 43.5
Figure 43.5

Percentile graph of blood expense for an institution for a single time period. Comparisons are as described in Fig. 43.4 . The expenses for the participant institution are considerably higher than those for the program as a whole and for the laboratories in the region, but they are in line with the laboratories in the comparison groups that are better matched. The importance of multiple comparisons and valid comparison groups are, once again, demonstrated. Data adapted from a report provided to a participant in the LMIP of the CAP.

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
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Image of Figure 43.6
Figure 43.6

Graphical depiction of laboratory performance. Cost is plotted on the -axis (manageable expense per billable test); productivity is plotted on the -axis (billable test per FTE). The position of the “best performing” laboratory in the group is in the lower right corner (greatest productivity and lowest cost). The upper left corner (lowest productivity and highest cost) is the least desirable position. The center of the graph is “middle of the road.” The participant laboratory is represented by a black diamond, which is positioned in the lower right quadrant but relatively close to the center point. Thus, the performance is respectable, but there is room for improvement. Such a graphical depiction of complex data takes a morass of data that are potentially confusing and makes it much easier to see the big picture. Data adapted from a report provided to a participant in the LMIP of the CAP.

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
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References

/content/book/10.1128/9781555817695.chap43
1.American Medical Association. 2003. Current Procedural Terminology. CPT 2003. AMA Press, Chicago, Ill.
2. Galloway, M.,, and L. Nadin. 2001. Benchmarking and the laboratory. J. Clin. Pathol. 54:590597.
3. Heatherley, S. S. 1997. Key performance indicators to assess laboratory operations. Benchmarking for survival. Clin. Lab Manage. Rev. 11:164170.
4. Lawson, N. S.,, and P. J. Howanitz. 1997. The College of American Pathologists, 1946-1996. Quality Assurance Service. Arch. Pathol. Lab.Med. 121:10001008.
5. Nevalainen, D.,, L. Berte,, C. Kraft,, E. Leigh,, L. Picaso,, and T. Morgan. 2000. Evaluating laboratory performance on quality indicators with the six sigma scale. Arch. Pathol. Lab.Med. 124:516519.
6. Portugal, B. 1993. Benchmarking hospital laboratory financial and operational performance. Hosp. Technol. Ser. 12:121.
7. Wilkinson, D. S.,, and D. D. Reynolds. 2003.Using benchmarking to manage your laboratory. Clin. Leadersh.Manage. Rev. 17:58.
8. Zarbo, R. J.,, B. A. Jones,, R. C. Friedberg,, P. N. Valenstein,, S. W. Renner,, R. B. Schifman,, M. K. Walsh,, and P. J. Howanitz. 2002. Q-tracks: a College of American Pathologists program of continuous laboratory monitoring and longitudinal tracking. Arch. Pathol. Lab.Med. 126:10361044.

Tables

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Table 43.1

Variables that are frequently assessed in benchmarking programs

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
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Table 43.2

Commonly used ratios in benchmarking

Items in parentheses are other, similar parameters.

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
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Table 43.3

Approaches to financial benchmarking

These activities involve external comparisons, but they are performed at the local level. They are discussed in the text under internal benchmarking.

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
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Table 43.4

Internal benchmarking with “homemade” standard by reference to published information on publicly traded commercial laboratories

Data courtesy of Thomas Wadsworth.

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
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APPENDIX 43.1a Internal Benchmarking by Monitoring Financial and Productivity Data on a Sequential Basis, Using Ratiosa

The spreadsheet illustrates the data from a microbiology laboratory for a portion of a fiscal year (October 2002 through June 2003).

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
Generic image for table
APPENDIX 43.1b Internal Benchmarking by Monitoring Financial and Productivity Data on a Sequential Basis, Using Ratiosa

The spreadsheet illustrates the data from a microbiology laboratory for a portion of a fiscal year (October 2002 through June 2003).

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43
Generic image for table
APPENDIX 43.2 Performance Characteristics of Four Laboratories

Citation: Wells L, Winn W. 2004. Laboratory Benchmarking, p 723-742. In Garcia L, Baselski V, Burke M, Schwab D, Sewell D, Steele J, Weissfeld A, Wilkinson D, Winn W (ed), Clinical Laboratory Management. ASM Press, Washington, DC. doi: 10.1128/9781555817695.ch43

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