Many healthcare facilities rely on the Balanced Scorecard framework to help them create and execute these plans. The Balanced Scorecard (BSC) offers a way to convert the mission and vision of any type of organization into specific and measurable goals, thus providing a thoughtful and clear plan of action.
Wondering how the BSC can help your healthcare organization continuously improve? Keep reading to learn more about the Balanced Scorecard in healthcare, and see some examples of how organizations are currently using it to get ahead.
Created by Drs. Robert S. Kaplan and David P. Norton, the Balanced Scorecard (BSC) is a revolutionary way to handle strategy management and has been one of the most popular methodologies used over the past three decades. Notably, it centers your vision and strategy around four distinct perspectives: customer, internal processes, financial, and learning/growth. Essentially, the Balanced Scorecard allows you to get your whole team on the same page with organizational goals in a clear and understandable way. It allows you to:
Although it started out being used primarily in the private sector, you now see the Balanced Scorecard in healthcare, nonprofit, and government organizations, as well as a number of other types of associations. If you have a strategic plan or goals to improve certain areas of your healthcare facility, the Balanced Scorecard is a relevant and powerful tool to help you get results.
For an in-depth explanation of the Balanced Scorecard, check out this article.
Healthcare institutions operate in a turbulent environment that is continuously impacted by regulatory shifts, technological changes, new epidemics and pandemics, and more. But that shouldn’t preclude them from being strategic. It just means they need to be more thoughtful than some other industries about what might happen in the next three to five years, and use every tool at their disposal—like the BSC—to help them be successful.
Strategic planning is challenging for organizations in all industries, but the way the Balanced Scorecard works makes it possible for healthcare institutions in particular to overcome some specific obstacles to strategy execution because:
Hospitals tend to be large, complex organizations where departments have varying priorities—not all of which serve a unified goal. The Balanced Scorecard facilitates alignment across departments by giving departmental leaders a way to connect their priorities to those of the organization, ensuring everyone is working toward the same ultimate goals.
The BSC format also makes it easy for leaders to see how their goals are interlinked with those of other departments, which highlights potential opportunities to collaborate. For example, knowing that an organizational goal is to improve patient safety, the HR department of a small community hospital might decide to collaborate with operating room managers to implement a new training program for staff members around operating room safety. Similarly, if a goal is to increase employee retention, leaders from various departments could work together to develop ideas around how to improve morale.
Employees aren’t always aware of the role they play in achieving organizational goals, especially if they work in a sprawling healthcare network. This results in little-to-no accountability for some employees, which leads to poor performance.
The Balanced Scorecard framework can be cascaded down so that even employees have key metrics that reflect the larger goals. As a result, everyone is accountable in some way for supporting the organization’s mission and vision, and everyone is aware of the metrics that will impact goal achievement.
Using the BSC also allows hospitals to do strategy mapping, a visual approach to strategy that helps communicate the plan to employees more effectively. Compare a one-page, colorful map to a strategic plan document that runs more than 100 pages—which most employees will never see or hear about—and you can clearly see the benefit!
Big data can lead to big problems for healthcare organizations, many of which struggle with data overload. Tracking too much data makes it difficult to organize, understand, and analyze, which means most of the data (and the effort put into collecting it) goes to waste.
The Balanced Scorecard gives healthcare organizations a way to focus their efforts on the places where data will have the greatest impact. You’re no longer tracking data for the sake of tracking it, or trying to analyze data simply because you have it. Instead, you’re focused on collecting and tracking strategic data—that which is important to helping you achieve your objectives.
An increasing number of healthcare organizations are turning to the Balanced Scorecard to achieve tangible performance results. One of them is Jefferson Health, whose website says: “In our drive to deliver the best quality care, we utilize proven methodologies for quality improvement.” Its approach has clearly been successful: Jefferson Health hospitals rank among the best in the nation for specialty care, and in the top 10 for the Philadelphia metro area.
Jefferson Health created strategic values around quality and safety, service, people, growth, and finance and operations. It sets goals and benchmarks results to national standards, measures progress toward goals, and tracks the most important metrics (those that impact its strategic values) to ensure accountability.
Other organizations’ strategic values might differ from Jefferson Health’s. For instance, another hospital might focus on operational excellence, quality/safety/service, and community and academic engagement. All healthcare organizations apply the scorecard in the way that works best for them, which is one of the most appealing things about the BSC—it’s flexible! Of the healthcare providers that use ClearPoint for strategy reporting, we’ve seen some organizations:
We’ve also seen some organizations use the BSC as their organizing framework and combine it with the OKR goal-setting framework.
If you’d like to know more about using the Balanced Scorecard as a strategic management system, check out this detailed example (which includes templates you can steal ideas from).
However you decide to structure your BSC system, remember this: One of the hardest parts of implementing the BSC in a large hospital is making sure everyone is bought in. You simply can’t have some people doing it and not others, or it won’t produce the results you expect. Rally support from managers in all departments, and encourage participation and dialogue around the BSC. The time you invest in awareness and education will pay off in the long run.