What Benchmarking Is…and Is Not

Benchmarking is a valuable tool for internal comparison within systems, internal comparison within one lab over time, or external comparison to other labs of similar size and complexity. It is not a precision tool—it provides directional guidance, but it is not an absolute.

After all, there are dozens of factors that come into play: the comparison criteria, the composition of the peer group, the services you offer, the extent of automation, whether phlebotomy is performed by the lab or nursing, whether you have an outreach program, the size of your business. The list can go on for pages because labs are complex. They are anything but homogeneous.

Benchmarking gets its bad rap from inappropriate use. It is meant to be used to help you identify big opportunities. Think of it in the context of the Pareto law. It can help you identify the 80/20 of cost savings: the 20 percent of the opportunities that will give you 80 percent of the savings. Forget about the noise of the 80 percent of the other, smaller opportunities. There are too many, and they are often much harder to do. Use the 20 percent of the big opportunities to drive continuous, incremental improvements. Work on each big opportunity, then the next, etc. Before you know it, you will be in the top quartile!

Small vs Big OpportunitiesMany small opportunities for savings are outweighed by choosing
fewer large ones to drive continuous, incremental improvements.

Kathleen Murphy, PhD
Chief Executive Officer
Chi Solutions, Inc.

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