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The whole point of collecting business and clinical data is to gauge progress and areas for improvement. But for a true measure of how you’re doing, the data must be compared to what others in the industry are doing. Getting such a benchmark in home infusion has been impossible, but not anymore.
"By definition, unless you are a multisite organization, you really can’t do benchmarking," says L. Rad Dillon, RPh, national pharmacy manager for Apria Healthcare in Louisville, KY. "What do you benchmark against? People say, I will use industry standards,’ but in home infusion there aren’t any."
Thanks to B. Braun/McGaw of Bethlehem, PA, and the National Home Infusion Association (NHIA) in Alexandria, VA, home infusion providers now have somewhere to turn through the Inter-company Operational Benchmarking Project.
Having just completed its first round of data collection from participants for the fourth quarter of 1998, Dillon says the project is attempting to do several unique things.
First, it will provide participants with information that will allow comparison with not only the average but also with individual providers.
"The important thing about this is that in benchmarking, you don’t want aggregate numbers. You want to see how each individual entity performs, and that is what we are attempting to establish," says Dillon. "It’s also important to note that we’re simply interested that the mean inventory turn is this, and the mean payroll as a percent of net revenue is this. We want to show people what the best practices are."
Insight into old issues
This will be accomplished through scattergraph and regression analysis. A scattergraph plots the data from each individual provider so you can see where each and every participant falls. "You then put in a best-fit line on the scattergraph and throw in a standard deviation above and below that line," explains Dillon. "The bracket above the best-fit line is the presumed best practice consisting of providers that are doing better than average. And below the best-fit line to the first standard deviation below is what you call providers with the opportunity to improve.’"
Regression analysis allows even deeper insight into similar issues.
"You take some parameter that is an index of how you are doing, such as inventory turns or payroll as a percent of revenue," says Dillon. "Theoretically, inventory turns should be high. You look to see if the small providers have the same inventory turns as the large providers, and you might find that a large company with a certain net revenue can expect a specific inventory turn; yet a small provider expects a different figure. Until now, we could not prove if such economies of scale existed in home infusion or not."
There are currently 90 respondent sites, with Apria turning in data for about 30 of those, which are then mixed with results from many regional and single-location providers. The participants who provided fourth-quarter data from 1998 will receive very detailed information. And for those who are worried about giving up too many company secrets, the project has taken confidentiality into consideration.
Participants are given a random identification code by the University of Texas College of Pharmacy under which they anonymously submit data. Organizations that choose not to participate despite the safeguard and expect the project to release specific data will be out of luck.
"You can’t get the milk free," says Dillon. "It is critical that we get more participants to make the data better and better, and if we just go and publish all of our results, then people will not participate. The more participants we get, the more confident we can be that this is a reasonable expectation we have arrived at from our data."
The project is currently collecting data for five areas:
• Cost of goods sold.
• Inventory value.
• Net revenue.
• Net receivables.
• Core pharmacy payroll.
Dillon is quick to note that the data in and of itself does little for a provider without follow-up.
"It becomes your own responsibility to mine all this data and use it for all it’s worth; and some people will do better at this than others."
Organizations interested in participating in this free project should contact NHIA at (703) 549-3740.