Getting a deeper insight in the sphere of finance and accounting in healthcare organizations I have found out much new, interesting and important that will help me become a qualified specialist in the sphere. All central concepts are basically essential for understanding the comprehensive picture of how financial and managerial accounting takes place in healthcare organizations, how financial data is processed and utilized and what way it passes in order to be utilized. However, the concept that became centrally important for me and caught my precise attention became the one of benchmarking.
Benchmarks are commonly recognized as: “An organization’s ratios can be compared to ratios for the same organization from prior years and to ratios of a specific competitor and to ratios for the entire industry” (Finkler and Ward, 2003).
As one can see from the definition, it is clear that the process of benchmarking helps the medical institution keep track with the newest achievements of the whole medical field, observe the best practices in other hospitals and take some improvements into practice in the continuous effort of improving quality of rendering medical services on a multi-level basis. There should be specifically trained professionals in every hospital that should conduct benchmarking activities and submit reports with relevant financial, manufacturing, accounting and other data that may help upgrade the certification level of the hospital, attract more investors and satisfy stakeholders. Benchmarking is widely recognized as a progressive means of an industry’s assessment that is likely to show the sectors needing improvement, weak and strong sides of an institution as well as to outline the ways to eliminate drawbacks and raise the competitive advantage of the medical institution in the field.
In general, the process of benchmarking involves gathering information on certain chosen spheres of the hospital’s functioning for further comparison of received indicators. Appointed representatives come to an institution on receiving the preliminary agreement from the partner they want to benchmark and make observations for further analysis (in some cases there may be no direct contact but the benchmarking specialists may receive increased access to relevant data about the hospital and conduct purely theoretical research). However, in this sphere one should keep an eye open for personal bias as this is the main enemy of high quality benchmarking results:
“True benchmarking requires keeping an open mind as well as working hard to minimize defensive thinking. In far too many cases, supported benchmarking trips result only in ‘feel good’ exercises where a team returns convinced of its own superiority. It is clearly faulty” (Vollman et al., 2005).
The hospital that is going to undertake the benchmarking analysis has to clearly stipulate the number of goals that will be pursued within the process of investigation because benchmarking is a highly complex venture. There are many indicators that appear relevant for the researcher as well as there is a huge number of benchmarking models requiring attention in different spheres of the hospital’s activity. This is why the research should be built up in an efficient, constructive way so that the awaited results were achieved.
According to the opinion of Andersen et al. (1998) benchmarking includes the following elements: measurement, comparison, learning and improvement. Thus, one can see that in general the process does not only involve comparison of the key indicators of one hospital with another one and making relevant inferences. Benchmarks that are taken as the basis for comparison are usually the spheres in which there are doubts – either the quality causes doubts or some aspect of the hospital’s work seeks change and innovation. This is why these research actions are closely bound to empirical results, to actions that yield practical results. The innovation is the logical completion of the benchmarking process, which cannot be neglected in the overall hospital’s functioning process.
Taking everything that has been said in the present report into consideration, one should understand my decision to attribute major attention to the concept of benchmarking in the process of any hospital’s functioning. Nowadays the world is witnessing fierce competition in every sphere of business activities, stakeholders and investors have become the prime authorities hard to satisfy, as well as the whole services sector seeks constant change and improvement that cannot be achieved without particular attention to other hospitals’ practices. Only joint, well thought over action on the way of improvement can earn the hospital good reputation, the growing number of patients and investors. The role and recognition of benchmarking is growing in every sphere of human activity, so the sphere of medical services should not remain aside – more than that, taking into consideration the fact that medical sphere BM has already yielded many evident positive results.
References
Andersen, B. et al. (1998). Benchmarking Supply Chain Management: Finding Best Practices. Web.
Finkler, S.A., and Ward, D.M. (2003). Accounting Fundamentals for Health Care Management. Jones and Bartlett Publishers.
Vollman, T.E. et al. (2005). Manufacturing planning and control systems for supply chain management. McGraw-Hill Professional.