Benchmarking as a management tool in decision making.

Copyright© 2005, Academy of Managed Care Pharmacy. All rights reserved. Author Efforts to provide optimal care while controlling overall costs have led multiple health care disciplines to invest in outcomes evaluation and monitoring. The comparison of outcomes to internal and external measures is known as benchmarking. Benchmarking, a well-known business tool, is a term used to describe ongoing value measurement in industry-specific best practices. Benchmarking is recognized as an essential technique for achieving continuous improvements in processes, performance measures, and operating efficiencies. These measurements are important for knowing an organization’s current status in comparison with competition or national trends. Additionally, a benchmark serves as a foundation of knowledge about current medical practice patterns that may guide decision making about future endeavors. In a business environment such as managed care that has a fundamental need for controlling cost, benchmarking can identify areas for improvement that can lead to practice innovations necessary to survive. Benchmarking is integral to organizational and management strategies whose ultimate goal is to improve, and not simply measure, performance. Benchmarking data in managed care is usually provided by retrospective evaluation of medical and pharmacy claims. Data collection, data warehousing, and electronic records research are essential activities to the benchmarking process. These, when used in conjunction with evidence-based guidelines, represent important components of efforts to improve patient outcomes and control costs of medical care. Managed care pharmacy has demonstrated an increasing need for evidence-based guidelines to implement best practices in