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The Balanced Scorecard In Healthcare
Medical professionals take a pledge to “do no harm.” But is the lack of an organized strategic plan harming your company?
Healthcare and medical organizations must use prescribed plans to ensure their organizations are successful, similarly to how healthcare professionals use clear, prescribed plans and instructions to get patients back to health. These plans help ensure organizations stay in good financial health and patients receive the best patient care possible so that they can recover.
Every organization is different, but whatever an organization’s goals, they must develop a thoughtful, clear plan of action. The key to this plan is a healthcare strategy map.
But how do you actually go about creating this strategy map? The Balanced Scorecard.
What is the Balanced Scorecard?
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:
- See the alignment of your strategic plan. Using the BSC framework, you’ll define goals for each perspective, measures to quantify progress toward goals, and projects to achieve the goals. Everything can be logically and neatly tied together.
- Provide a high-level overview of how well the organization is following and executing its strategic plan. After establishing clear alignment and measurable goals, it will be obvious whether your strategy is on track or hitting speed bumps. Having this transparency also helps employees understand how their role fits into the organization’s goals and mission as a whole.
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.
The Balance Scorecard in Healthcare and Why It Is Needed
Healthcare professionals and administrators work hard to meet their organizational goals, but it’s not always easy.
The goals created by a healthcare group are more organized and clear when using the four perspectives—customer, internal processes, financial, and learning/growth—detailed in the Balanced Scorecard. These categories complement each other and make it possible for both large healthcare networks and small community hospitals to meet and exceed their strategic goals. Stakes are high in the healthcare industry—achieving goals can literally be the difference between life and death.
The goals created by a healthcare group are more organized and clear when using the four perspectives—customer, internal processes, financial, and learning/growth—detailed in the Balanced Scorecard. Click To Tweet
In order to fully understand how to put this approach to work, here’s a general explanation of how to create a Balanced Scorecard with a strategic model that includes these example perspectives: quality of patient care (customer), accountability (internal processes), sustainability (financial), and research and education (learning/growth). These are five steps your organization might take to develop its scorecard:
- Define each perspective and key outcome(s). For quality of care, the definition might be: “Lead in the development, application, and promotion of quality and safe practices system-wide that improve the patient experience and outcomes.”
- Establish strategic goals. Next, establish several strategic goals designed to help you achieve each perspective. To meet the example listed above, one goal, or “objective,” could be: “To offer industry-best medical treatments that lead to measurable improvement in patient well-being.”
- Track measures for each goal. To ensure objectives are met, define measures of success for each goal/objective. A measure for the example above could be “Reduce the percentage of hospital readmission rates and/or hospital acquired conditions (HACs).
- Set and track targets. Then, set a target for each measure—for example, “Reduce readmission rates by 15% in [year]” could be implemented. As time goes on, you will be able to determine whether your organization met and exceeded targets, or if it underperformed.
For more direction on what you could (or should) be tracking, check out this library of 100+ healthcare metrics and KPIs.
- Create projects. Projects, or initiatives, are where the action takes place. This is where you outline the tangible steps that will be taken to ensure the objectives are met. Continuing with our example, one initiative could be, “Gather data on all HACs from the past 12 months by Q1 of [year].”
Real-Life Example Of A Balanced Scorecard In Healthcare
On its website, Jefferson Health notes, “In our drive to deliver the best quality care, we utilize proven methodologies for quality improvement.” This hospital’s proven approach is the Balanced Scorecard, which it has used with much success. Jefferson Health:
- Created strategic values around quality and safety, service, people, growth, and finance and operations
- Sets goals and benchmarks results to national standards
- Measures progress toward goals
- Tracks the most important metrics (those that impact its strategic values) to ensure accountability.
This is just one of many healthcare organizations that rely on the BSC to achieve its strategic goals. 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). If you’re ready to create your own Balanced Scorecard, find out which steps to take in this article.
Sample Strategy Maps For Medical & Healthcare Organizations
The Balanced Scorecard can revolutionize your healthcare strategy and we’d like to help you get started. The following white paper includes sample scorecards with examples to illustrate how medical and healthcare groups have put the Balanced Scorecard to work for them.
When you download this white paper, you’ll have access to the following information:
- Five sample Balanced Scorecard strategy maps for teaching hospitals, regional healthcare systems, and more
- How medical and healthcare organizations worldwide are experiencing success with strategy mapping
- Insights you can draw from strategy mapping (and why you should create your own)
Download it now and start updating your strategic plan today!