The Process of Benchmarking Essay
The Process of Benchmarking
In order to be competitive in health care markets, organizations must ensure that the services they provide are consistent in pricing and quality with other comparable organizations. In this Discussion, you will examine how the process of benchmarking, or comparing organizations, is important in financial decision making.
To prepare: Review the information on benchmarking found in this week’s Learning Resources. Search the Walden Library or other reliable resources on the Internet and locate a journal article discussing how a health care organization has used the principle of benchmarking. How could the concept of benchmarking be used in your own organization (or one with which you are familiar), regardless of size? Consider how benchmarking could be useful to you in decision making. Analyze the potential risks of making a faulty comparison.
Post a summary of the article you found (including the APA reference) and explain how it informed your understanding of benchmarking. Discuss how benchmarking could be used for financial decision making in your own organization (or one with which you are familiar). Also analyze the potential risks of making comparisons with an organization that is not a credible match with your own.
Required Readings Baker, J. J., Baker, R. W., & Dworkin, N. R. (2018). Health care finance: Basic tools for nonfinancial managers (5th ed.). Burlington, MA: Jones and Bartlett Learning.
Chapter 14, “Trend Analysis, Common Sizing, and Forecasted Data” (pp. 149-160)
The focus of this chapter is the use of trend analysis and forecasting to develop future budgets and make financial decisions about capital purchases, programs, and personnel.
Chapter 15, “Using Comparative Data” (pp. 161-173)
In this chapter, you are introduced to the criteria for identifying other health care organizations that are comparable to your own. Data from these organizations can then be used to evaluate your own organizational performance.
Chapter 19, “Estimates, Benchmarking, and Other Measurement Tools” (pp. 223-231)
In this chapter, you continue exploring the concept of financial benchmarking. The chapter focuses on the importance of benchmarking for identifying performance gaps. Zelman, W., McCue, M., & Glick, N. (2009). Financial management of health care organizations: An introduction to fundamental tools, concepts, and applications (3rd ed.). Hoboken, NJ: Jossey-Bass.
Retrieved from the Walden Library databases.
Chapter 5, “Working Capital Management” (pp. 187–231)
This chapter examines the concept of working capital. The authors explore the specifics of current assets and the management of the working capital cycle.
Chapter 11, “Responsibility Accounting” (pp. 468–497)
Review: This chapter explores the trend toward the decentralization of health care organizations and the challenges this presents. This chapter also describes responsibility centers, or organizational units intended to achieve specific tasks.