SOLUTION: Capella University Scheduling System Improvement Process Capstone Proposal

GOVERNANCE
CSIRO PUBLISHING
Australian Health Review, 2014, 38, 208–217
http://dx.doi.org/10.1071/AH13170
Applications of the balanced scorecard for strategic management
and performance measurement in the health sector
Farshad Behrouzi1,3 PhD, Candidate
Awaluddin Mohamed Shaharoun2 PhD, Dean of School
Azanizawati Ma’aram1 PhD, Senior Lecturer
1
Department of Manufacturing and Industrial Engineering, Faculty of Mechanical Engineering,
Universiti Teknologi Malaysia, 81310 UTM, Johor, Malaysia.
2
Razak School, Jalan Semarak, Universiti Teknologi Malaysia (International Campus), Kuala Lumpur, Malaysia.
Email: awaludin@ic.utm.my
3
Corresponding author. Email: farshad.behrouzi@yahoo.com
Abstract. In order to attain a useful balanced scorecard (BSC), appropriate performance perspectives and indicators are
crucial to reflect all strategies of the organisation. The objectives of this survey were to give an insight regarding the situation
of the BSC in the health sector over the past decade, and to afford a generic approach of the BSC development for health
settings with specific focus on performance perspectives, performance indicators and BSC generation. After an extensive
search based on publication date and research content, 29 articles published since 2002 were identified, categorised and
analysed. Four critical attributes of each article were analysed, including BSC generation, performance perspectives,
performance indicators and auxiliary tools. The results showed that ‘internal business process’ was the most notable BSC
perspective as it was included in all reviewed articles. After investigating the literature, it was concluded that its
comprehensiveness is the reason for the importance and high usage of this perspective. The findings showed that 12 cases
out of 29 reviewed articles (41%) exceeded the maximum number of key performance indicators (KPI) suggested in a
previous study. It was found that all 12 cases were large organisations with numerous departments (e.g. national health
organisations). Such organisations require numerous KPI to cover all of their strategic objectives. It was recommended to
utilise the cascaded BSC within such organisations to avoid complexity and difficulty in gathering, analysing and interpreting
performance data. Meanwhile it requires more medical staff to contribute in BSC development, which will result in greater
reliability of the BSC.
What is known about the topic? Although there was initially a low perception of the BSC within the health sector, over the
past decade interest in BSC utilisation has been growing among health service providers around the world in both developed
and developing countries. Some papers have described the development or diffusion of the BSC in health settings. Some
examples of BSC utilisation for private and public hospitals have been presented in the literature. However, the necessity of a
comprehensive review of published articles in the health area is crucial in order to derive the most appropriate way to design
and implement the BSC in the health sector in terms of perspectives and KPI.
What does this paper add? This paper has analysed articles on the BSC in the health sector published over the last 10 years.
The analysis is based on the following items: BSC generations; BSC perspectives; BSC indicators; auxiliary tools. This paper
gives an insight into the situation of the BSC in the health sector over the past decade and affords a generic approach of BSC
development for health settings in terms of the four items above.
What are the implications for practitioners? This paper can be beneficial for managers and decision makers of all
healthcare organisations. It can help them to change their thinking about performance assessment and to have a structural BSC
approach for performance measurement and strategic management in healthcare. It presents an insight on designing BSC to
help managers adopt appropriate performance perspectives and KPI. In addition, it introduces the cascaded BSC, which is
useful for large health settings with too many KPI. It also presents all BSC generations to help healthcare managers utilise
proper BSC based on their own requirements and strategic objectives.
Received 11 October 2013, accepted 4 November 2013, published online 4 March 2014
Introduction
In recent years, there has been an increasing trend toward
designing and implementing the Balanced Scorecard (BSC)
Journal compilation Ó AHHA 2014
as a performance measurement tool in the health sector.
Hospitals have started to utilise performance measurement
systems,1 but they have been tardy to develop and
www.publish.csiro.au/journals/ahr
Uniqueness of the Balanced Scorecard in the health sector
implement formal performance and productivity measurement systems.2
The primary problems that have inhibited hospitals from
making satisfactory progress in the performance and productivity
systems are: culture, organisation and managerial practices; these
are inconsistent with competitive business, including operating
practices that are not cost driven.3 According to Zelman et al.,
some specific reasons why hospitals have not been active or
successful in this area are as follows:4
(1) Members of hospital boards have little experience of competitive environments
(2) Lack of employee participation, particularly among doctors
(3) Provided services are difficult to measure
Among medical staff, staff relations and quality of care are the
most important attributes that contribute to the overall performance of a hospital;3 however, they are difficult to measure,
interpret and compare with other healthcare organisations.4 In line
with the changing demands on business due to many internal and
external changes in healthcare industry, it is argued that the key to
achieving the targeted level of performance is to adopt new
approaches of performance measurement.5 BSC is fundamentally
a customised performance measurement system that looks
beyond the traditional financial measures and is based on organisational strategies. Although the health sector has been implementing performance measurement systems for a long time,6
in recent years application of the BSC as a management and
measurement approach has grown dramatically. According to
Banchieri et al., who considered all of the scientific publications
on the BSC during the past decade, of all the articles that specified
‘sector’ in their abstract or title, 33% applied to the health sector.
This was followed by the public and education sectors, which
accounted for 18 and 11% of the articles respectively.1
Hence, the objective of this survey was to provide an insight
into the present state of the BSC in the health sector and to
identify a tailored approach of BSC development for health
settings with a specific focus on BSC perspectives and key
performance indicators (KPI).
The BSC
In 1992, Dr Robert Kaplan and Dr David Norton introduced the
BSC as a performance measurement tool.5 It is also a strategic
management tool for translating an organisation’s strategies
into operational terms. The BSC is a conceptual tool7 and its
four perspectives can be modified; its flexibility is part of its
attraction.8
Accordingly, the BSC is a performance measurement tool
that can be customised for every organisation and utilised as
a strategic management framework to align an organisation’s
strategies and objectives. Implementing the BSC requires that
executives:9
*
*
Develop coherent strategies in order to achieve the
organisation’s mission
Develop a set of KPI to monitor the organisation’s performance
and strategic alignment
Many organisations use the BSC merely as a performance
measurement tool. For instance, 20 (69%) of the cases we
Australian Health Review
209
reviewed used the BSC first generation which is only able to
measure the performance. However, it is necessary to track
strategic alignment as there is usually deviation between an
organisation’s goals and executive actions; this happens because
executive actions are affected by variable environmental factors
such as politics and economic conditions. By defining long-term
and short-term goals, organisations will be able to measure their
performance and track their strategic alignment. It helps directors
to find out what the organisation’s current situation is, and how
it is supposed to be; subsequently they can adapt appropriate
strategies to meet deviation between the organisation’s goals and
executive actions.
BSC generations
Three different statements of BSC evolution exist in the
literature.10–12 BSC evolution can be divided into three stages
known as three BSC generations. Each generation is distinguished by its method of utilising performance perspectives
and KPI to reflect an organisation’s performance and strategies.
The first generation of BSC combines financial and non-financial
indicators under four traditional perspectives: financial, customer, internal business process and learning and growth.12 The BSC
first generation, also known as traditional BSC, includes KPI that
are only proper for performance measurement. This generation
of the BSC is relatively easy to develop and implement.
The second generation of BSC emphasises cause and effect
relationships among measures and strategic objectives.11 It has
become a strategic management tool, which utilises a strategy
map to reflect the linkage among measures and strategies. In fact
there is a formal linkage of strategic management and performance management that is emphasised by the second generation
of BSC.10
Lawrie and Cobbold argued that the third generation of BSC
is about developing strategic control systems by incorporating
destination statements and optionally two perspective strategic
linkage models.12 They used ‘activity’ and ‘outcome’ perspectives instead of the four traditional perspectives. Speckbacher
et al. defined the third generation of the BSC as a second
generation of the BSC that additionally implements the
organisation’s strategies by defining its objectives, action plans
and results, and by linking incentives to BSC measures.11 Miyake
stated that the third generation of BSC derives from the concept of
the strategy-focussed organisation.10 The view of Speckbacher
et al. is accepted as the dominant view in the literature.11
Cascaded BSC
In order to avoid the complexity and difficulty of performance
measurement using the BSC, Kaplan and Norton suggested that a
standard BSC should not exceed five KPI for each perspective
within a medium-sized organisation.8 However, some organisations are substantially large (e.g. national healthcare organisations) and comprise numerous business units and a large number
of KPI is required in order to measure their total performance.
There are two options in this situation:
(1) Group some of the KPI together into subcategories
(2) Create a new lower-level scorecard
210
Australian Health Review
F. Behrouzi et al.
The first option results in having too many subcategories,
which makes it difficult to analyse and interpret the collected
data. The second option overcomes this weakness as the processes
of collecting, analysing and interpreting of the performance data
will be accomplished separately in different units. In fact, instead
of having one complex BSC for the whole organisation, each
business unit will have its own specific BSC. Accordingly, staff in
different business units will each work with their own BSC. In
order to attain the total performance situation of the organisation,
performance information from all business units should be linked
together. Hence, there will be one top-level BSC, which is linked
to other detailed BSC of different units. Such a structure of the
linked BSC is called ‘cascaded BSC’, which involves more
people in the processes of designing and implementing the BSC.
BSC in the health sector
Although there was initially a low perception of the BSC within
the health sector, over the past decade interest in the BSC has been
growing among health service providers around the world in
both developed and developing countries.13 According to the
literature, there is a diversity of reasons for development and
implementation of the BSC in the health sector. Major reasons
are presented in Table 1, which highlights a set of significant
reasons for BSC implementation in the health sector, from
improved performance measurement and reporting to organisational integration. In an extensive review, Zelman et al. indicated
that the BSC has been introduced across all health service areas
including:4
*
*
*
*
Hospitals
University medical centres and health departments
Pharmaceutical care
Health insurance companies
Not only has the BSC been utilised for strategic management
at the organisational level, but it has also been used within health
setting for assessment of health services, improvement projects,
accreditation, clinical pathways and performance measurement
across a number of hospitals.4 The first article on BSC in the health
sector was published in 1994;4,21 it argued the necessity for
continuous quality improvements in the health setting.22
Table 1. Some examples of documented reasons for implementation of the balanced scorecard (BSC) in the health sector
Authors
Organisation
Reason
Aguilera and Walker
St Vincent’s Private
Hospital, Australia
Bloomquist and Yeager15
Emory Healthcare in
Atlanta, USA
Chang et al.16
Mackay Memorial
Hospital, Taiwan
Garling17
Children’s Health
Systems, USA
Gottlieb18
Faulkner Hospital,
USA
Aidemark and Funck19
Högland Hospital,
Sweden
Marr and Creelman20
The Northumbria
Healthcare NHS
Foundation, UK
Hunter Area Health
Service, Australia
The BSC was initially introduced in the nursing directorate as a framework for
improving clinical governance in order to achieve better outcomes for patients and
staff. Due to the success of this trial, it was later expanded across the whole hospital.
They had a structural transition from independent units (three hospitals and two
faculty practices) to an integrated healthcare system. They utilised the BSC in order
to assist in generating a unified system to reach successful transition.
They needed to use best practice business tools to help them take a more strategic
approach that would differentiate their services and attract more business, and that
would also improve communication and collaboration between all levels of staff
and key stakeholders. In addition, their board requested an annual performance
report that would provide a more comprehensive view of the organisation’s
performance in fulfilling its mission.
With an upcoming major capital expansion, along with a recognition that the
organisation was structured by region and health practice with competing agendas
and resource demands, executives at Nemours Children’s Health System in the
USA decided to unify the organisation around ‘One Nemours’. Critical to this
transformation was their adoption of the BSC to help align and strengthen the
organisation.
The BSC was implemented to help them have a source of reliable information on
performance. They also intended to address several major challenges including
nursing shortages and ensuring that all patients, regardless of socioeconomic status,
received top-quality care.
The BSC was introduced as a management tool to combine financial control and
quality improvement, along with the development of clinical staff competence. It
was initially introduced in 1997 as a 2-year trial but continued because of the
success of the trial.
They were looking for a new and powerful tool for sharpening their strategic
formulation capabilities, to ensure they continued to be a high-performing
healthcare provider.
(1) They needed to find out how the implementation of their strategic plan (which won
a state award) will make a difference.
(2) They needed to show to the community that they were getting value for the
hospital’s taxpayer funded (AUS$1 billion per annum) services.
They utilised the BSC after finding that traditional methods of healthcare strategy
formulation (for example, extensive consultation resulting in a complex detailed
strategic plan) did not work and they needed to adopt a new approach from outside
of healthcare.
14
McDonald13
McDonald13
St Mary’s/Duluth
Clinic Health
System
Uniqueness of the Balanced Scorecard in the health sector
The BSC has been used by various healthcare organisations,
and it can be customised to reflect each system’s performance
efficiently. Several papers have described the development or
diffusion of the BSC in health settings;4,19,23 many examples of
BSC, like measurement systems for private and public hospitals,
have been presented in the literature.24–26 Hence, the necessity of
a comprehensive review of published articles in the health area is
crucial in order to derive the most appropriate method to design
and implement the BSC in the health sector.
Although there is an increasing trend toward performance
measurement in healthcare in the last 15 years, some generic
comments can be made in this area:13
*
*
*
Many healthcare performance measurement systems have a
specific focus on performance measurement and often do not
reflect the organisation’s strategies and progress toward achieving these strategies.
They often do not have a clear cause and effect relationship
between various components of what is being implemented and
measured.
Some healthcare BSC include an excessive number of performance measures, which makes it difficult to implement the BSC
within the entire organisation.
In a survey by Pink et al. of selecting and utilising the BSC KPI
the following results were obtained:27
*
*
*
*
*
*
Flexible BSC KPI should be selected as they reflect the current
performance of the organisation in terms of executive actions
while these actions are variable over time.
In the case of lack of data, some KPI should be integrated to
reduce the cost of measurement.
Data quality should be a major concern and needs to be
addressed for credibility.
Benchmarking is valuable when the gathered data is reliable
and it often leads to a fresh perception that something needs to
be changed or improved.
An experts’ advice is not optional, it is essential to consult with
respective experts; for example, directors and clinicians who
have reliable data.
Data linkages should be made early as it would be more difficult
after gathering too much data.
Some healthcare personnel have a substantial affiliation for
measurement-oriented decision making as it underlies their occupation.28 Nevertheless, they like to control the measurement
and use it inappropriately, for instance, by ignoring risk adjustment if comparing different clinics.
Research method and findings
The first phase in this research was to collect and identify
worthwhile articles and reports regarding the BSC in healthcare,
published over the last 10 years. We explored the following
databases to cover leading journals on performance measurement
and the BSC in the health area:
*
*
*
*
*
Science direct
Springer
Emerald
Scopus
Google scholar
Australian Health Review
211
After an extensive search and filtration based on publication
date and research quality (method), 87 articles published during
the past decade were found on the BSC area. Of the 87 articles
identified, 29 (33%) were about the BSC implementation in the
health sector. It shows a growing tendency to investigate implementation of the BSC in the healthcare setting over the last
10 years. In the second phase, identified articles were categorised
and analysed (Table 2). The following four perspectives were
identified for analysing each article: BSC generation, BSC perspectives, BSC indicators, and auxiliary tools. The analytical
report is summarised in the following sections.
Table 2 shows a growing tendency for a…
Purchase answer to see full
attachment

Haven’t Found The Relevant Content? Hire a Subject Expert to Help You With
SOLUTION: Capella University Scheduling System Improvement Process Capstone Proposal
Post Your Own Question And Get A Custom Answer
Hire Writer
Written Assignments
Get 20% Discount on This Paper
Pages (550 words)
Approximate price: -

Why Choose Us?

Quality Papers

We value our clients. For this reason, we ensure that each paper is written carefully as per the instructions provided by the client. Our editing team also checks all the papers to ensure that they have been completed as per the expectations.

Professional Academic Writers

Over the years, our Written Assignments has managed to secure the most qualified, reliable and experienced team of writers. The company has also ensured continued training and development of the team members to ensure that it keeps up with the rising Academic Trends.

Affordable Prices

Our prices are fairly priced in such a way that ensures affordability. Additionally, you can get a free price quotation by clicking on the "Place Order" button.

On-Time delivery

We pay strict attention to deadlines. For this reason, we ensure that all papers are submitted earlier, even before the deadline indicated by the customer. For this reason, the client can go through the work and review everything.

100% Originality

At Written Assignments, all papers are plagiarism-free as they are written from scratch. We have taken strict measures to ensure that there is no similarity on all papers and that citations are included as per the standards set.

Customer Support 24/7

Our support team is readily available to provide any guidance/help on our platform at any time of the day/night. Feel free to contact us via the Chat window or support email: support@writtenassignments.com.

Try it now!

Order Now to Get 20% Discount

We'll send you the first draft for approval by at
Total price:
$0.00

How our best essay writing service works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

Written Assignments has stood as the world’s leading custom essay writing paper services provider. Once you enter all the details in the order form under the place order button, the rest is up to us.

Essays

Cheapest Essay Writing Service

At Written Assignments, we prioritize all aspects that bring about a good grade such as impeccable grammar, proper structure, zero plagiarism and conformance to guidelines. Our experienced team of writers will help you completed your essays and other assignments.

Admissions

Admission and Business Papers

Be assured that you’ll get accepted to the Master’s level program at any university once you enter all the details in the order form. We won’t leave you here; we will also help you secure a good position in your aspired workplace by creating an outstanding resume or portfolio once you place an order.

Editing

Editing and Proofreading

Our skilled editing and writing team will help you restructure your paper, paraphrase, correct grammar and replace plagiarized sections on your paper just on time. The service is geared toward eliminating any mistakes and rather enhancing better quality.

Coursework

Technical papers

We have writers in almost all fields including the most technical fields. You don’t have to worry about the complexity of your paper. Simply enter as many details as possible in the place order section.