Purpose - The pupose of this paper is to present an overview of the main conceptual and methodological issues that underlie our current understanding of benchmarking initiatives in the field of health. Design/methodology/approach - The paper is based on a pragmatic review of the literature and policy reports. It outlines some of the major conceptual problems associated with the use of benchmarking indicators and discusses how health policy research and practice is evolving to address the challenges raised, drawing examples from national and international benchmarking initiatives. Findings - Benchmarking has become an intrinsic part of most developed health care systems, yet the impact of benchmarking initiatives on improvements in system performance and their integration within existing policy processes still need to be elucidated. Several methodological challenges remain in the field of benchmarking, many of them related to the selection and quality of indicators used to make comparisons both within and between health care systems. Further research and applications are needed to ensure that benchmarking in health fulfils its objective, namely to further our understanding of where to focus policy efforts in order to improve the performance of health care systems. Originality/value - This paper poses the timely question of whether benchmarking initiatives are in fact guiding health policy towards the improvement of health care system performance. It draws from the policy literature and existing frameworks to offer an outline for the future evaluation of benchmarking initiatives by policy-makers. © Emerald Group Publishing Limited.