The power of Benchmarking – a tool for data driven decisions
By Charles Dalton and Raju Narayan
Global Sector Specialists, IFC Healthcare
Healthcare organisations strive to achieve best performance across diverse areas: asset utilisation, costs and health outcomes. But how do they stack up against their peers? Limited data is available, especially in emerging markets.
Data and metrics provide leverage, enabling companies to navigate competitive landscapes and understand their operations, strengths and weaknesses, and customer behaviour better. Benchmarking, when used correctly, allows facilities to measure and assess performance against industry peers to identify areas for improvement, with evident benefits.
In 2021, the IFC launched a benchmarking pilot to collect and examine data from healthcare companies in emerging markets. We recognised that by gathering and analysing performance data, healthcare organisations would be better equipped to provide improved care and control costs. In 2023, we launched the first round of a formal benchmarking programme.
What our research revealed
The study was complex, particularly given the importance of anonymised data. However, the findings have proved valuable to hospital leadership and healthcare investors.
Our most recent report drew from 41 companies and 125 healthcare facilities across 28 countries, covering finance, operations, quality assurance, and clinical practice.
Key findings revealed that facilities showed wide variations in areas from hospital bed utilisation to staff turnover.
It became clear that there’s no such thing as a typical hospital. Instead, hospitals deal with similar issues but at varying levels of maturity and complexity.
We also found that healthcare businesses need time to mature, with few facilities showing stable operations within their first five years, whether in terms of finances or care quality. Business planning needs to take this instability into account.
Interestingly, healthcare businesses in emerging markets demonstrated similar performance margins to listed healthcare companies in developed markets. However, while providers successfully worked with social health insurance, they faced cashflow challenges due to high receivable days on submitted claims.
The data highlighted gaps in adverse incident reporting, likely due to limited capabilities in consistently collecting and analysing incidents. This finding has helped organisations better understand the systems, processes and people needed for improvement.
Why should you engage in healthcare benchmarking?
Healthcare benchmarking allows for global peer comparisons, helping shareholders understand sector nuances and set realistic expectations. It enables decision-makers to understand performance variations between facilities and ask deeper questions about what’s realistic versus problematic.
Hospital leadership can use benchmarking to examine their performance critically: What should we do differently? Where should our business be in five years? What trends are we seeing in our performance?
It’s important to note that benchmarking isn’t a league table or scoreboard. That approach only leads to indiscriminate actions rather than selective improvement measures. Instead, hospitals can use benchmarking to review their KPIs, set realistic targets and implement targeted corrective measures.
For the first time, leaders can step back and compare their facilities’ performance with comparable entities worldwide. This allows them to understand their performance level, set reasonable expectations and prioritise improvements that can be tracked with proven KPIs.
Healthcare providers should remember that performance improvement is a journey, not a destination — but that journey needs to start now.
Looking ahead to HBI 2025 in Paris and the IFC Global Healthcare Conference
The IFC will be addressing HBI 2025, to present detailed results from this benchmarking study, along with other insights and case studies, at HBI in March 2025.
Meanwhile, to learn more about our healthcare benchmarking and its impact, join us at IFC’s Global Healthcare Conference in Bali this February 2025. The conference will feature an optional day focused on performance improvement, showcasing practical insights from our benchmarking findings.
HBI members can receive a 15% discount on the conference registration fee of USD $1,500 by using the code HBI15 before 31st December 2024.
