Measuring Strategic Performance of Management in Healthcare Organizations

The assignment content discusses the importance of considering cost constraints, process efficiency, and staff presence factors during the implementation of the Balance Scorecard (BSC) approach at workplace. The study conducted by El-Jardali et al. (2011) suggests that BSC can be beneficial for healthcare organizations in Lebanon. However, it is essential to monitor and evaluate the effectiveness of this technique. Future studies can be conducted to compare the implementation of BSC with other countries and overcome the limitations present in the research.

Measurement of marketing of private dental
practices using balanced scorecard

TABLE OF CONTENTS
LITERATURE REVIEW.................................................................................................................1
Balance score card and its requirement in HSC..........................................................................1
Strategies required for implementing the BSC in health and social care....................................3
Role of BSC in the context of reducing challenges faced by health care enterprises..................5
Contribution of BSC in terms of bringinginnovation in strategic performance measurement
systems.........................................................................................................................................7
Performance measurement using strategic scorecard map..........................................................8
Implementation of balance score method in health care system...............................................12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

LIST OF FIGURES
Figure 1: Four perspective of BSC..................................................................................................2
Figure 2: BSC key performance areas and key performance indicators.........................................4
Figure 3: BSC original model..........................................................................................................5
Figure 4: Strategy map of objectives for hospital industry..............................................................9
Figure 5: KPIs for hospital industry..............................................................................................10
Figure 6: Financial and customer perspectives..............................................................................11
Figure 7: Internal growth and learning & growth indicators.........................................................11
Figure 8: The Strategy Map in the Analyzed Hospital..................................................................13
Figure 9: Step-wise development of the BSC for national hospital performance measurement...14

LITERATURE REVIEW
Review of literature play an important role in success of any study because it provides
solid foundation of theories and different author’s reviews related to particular topic. By
conducting LR, researcher can better understand the concepts of balance score card and its
benefits in terms of measurement of marketing of private dental practices using this method. In
this regard, research papers conducted by different scholars related to similar topic has been
considered to properly understand implementation and benefits of balance score card method in
health and social care sector.This section covers various topics which can be described as
follow. In the context of measuring the role of balance score card method in health and social
care from customer, financial, learning and growth key performance indicators, investigator
conduct review of literature section. It covers information about needs of BSC in HSC in
reducing challenges faced by health care enterprises and Strategies required for implementing the
BSC in health and social care in a significant manner.
Balance score card and its requirement in HSC
Amatraunga and their colleagues (2002) conducted study to describe application of the
balance score card method to measure management performance with NHS facilities. They
explored that for measuring strategic performance of management in health and social care, BSC
tool can play an important role. In order to improve processes and attain organization goals
within stipulated time, it is necessary for the organization to understand proper implementation
of balance score method. Further, they described that balance is essential for any organization in
context of maximizing potential and effective movement (Amatraunga and et.al., 2002). From
the study, it is clear that over the recent past, enterprises have concentrated in using various
methods for creating healthy working culture at workplace. However, without strategic planning
and establishing link between programme activities, firms will be unable to measure
performance goals of enterprises in several terms such as budget, decision making and
performance of employees etc.
Further, Amatraunga and their associates described four perspectives of balance score
card in the context of HSC. In this regard, they were taken different performance indicators such
as customer, financial, internal business growth and learning & growth perspectives etc.
Customer perspective can be understood in terms of providing quality of goods and services to
patients within the stipulated time. Ability of employees, quality of information and effective use
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of quality systems are the major constraints associated with the balance score card method
(Amatraunga and et.al., 2002). However, capabilities, technologies and organizational design in
HSC related problems are associated with the implementation of balance score method at
workplace. Financial consideration for public organizations can be measured in forms of meeting
needs of their constituencies.
Figure 1: Four perspective of BSC
(Source: Amatraunga and et.al., 2002)
They explored that for retaining self-managing workers and attaining high quality, it is required
for companies to exhibit self-control. Manager of enterprise can use this approach to track past
results and learn about future. By discussing past findings with their colleagues, enterprise would
be able to examine internal capabilities and frame new strategies in an appropriate manner. They
suggest that in order to release the true potential of the balance score card, it is necessary for the
management of firms to consider several critical accomplishments which include alignment of
strategy, strategic feedback and more effective measurement and management of business
performance against plan. Nonetheless, Broccardo (2015) argued that it is essential for health
care organizations to manage costs and maintain balance between quality and cost (Broccardo,
2015).
Further, Amatraunga and their colleagues (2002) determined needs of balance score card
development in the context of NHS trust facilities. They found that this method helped them in
developing FM business objectives and translating these objectives into appropriate performance
measurement parameters. They argued that through applying balance score card method,
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enterprises can be able to maintain data reliability, link performance measurement and link
performance measurement results to individual job descriptions in a significant manner. On the
basis of study done by researchers, it is identified that balance score method can be beneficial for
the organizations in several terms such as customer/stakeholders needs, identify critical success
factors, relation of enterprise with its customers, regular sampling of customers and service level
agreement between different parties (Amatraunga and et.al., 2002). In addition, on the basis of
result of study, it has been observed that a balance score card implementation approach used
within NHS facilities had created a dramatic impact on performance of health care organizations
such as improving communication system, team-building and strategic priority settings etc.
Strategies required for implementing the BSC in health and social care
Lovaglio (2010) stated that over last two decades, most of the health and social care
organizations showed their interest in implementing Balanced Scorecard approach at global
level. However, conducting the research they faced issue related to availability of literature on
causal-effect relationships between different types of dimensions and implementation of a
quality evaluation system using balance score card method. In order to overcome this research
gap, investigator used Structural Equation Models with latent variables. But due to presence of
lack of a global optimization criterion, researcher faced problem to examine result using this
approach. Further, Lovaglio tried to emphasize on using methodological conceptualization of the
Balanced Scorecard in the context of health and social care. In order to estimate causal
relationships among specified latent dimensions scholar used a suitable statistical approach
(Lovaglio, 2010). A two-step model building strategy was used to build structural model which
was based on partial correlations in terms of predictive power measured by the mean of the R2.
Researcher described that several types of systems are available to facilitate health structures in
improving quality like Continuous Quality Improvement and balance score card.
Furthermore, to identify causal relationships among latent dimensions specified in the
BSC framework, researcher proposed a suitable statistical approach. By considering this
approach, hospitals and health care professionals would be able to measure impact of policies
and management of health structures. Further, study produced a list of 25 Hospital indicators
(KeyPerformance index, KPI) in four major key areas that can be enlisted as follow.
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Figure 2: BSC key performance areas and key performance indicators
(Source: Lovaglio, 2010)
Experts of the Regional Healthcare directorate were filled different KPA areas in the
Balanced Scorecard model. In addition, official Regional Surveys on Patient Satisfaction was
conducted. For the purpose of Human capital and Economic area indicators data was collected
from administrative archives of the Healthcare Directorate of Lombardy Region. By applying
structured equation modeling, researcher was found that economy and clinical process
dimensions are still endogenous (Lovaglio, 2010). Figure shows that medical human capital
remains an exogenous and further, the link between patient satisfaction with clinical process and
medical human capital disappeared. Moreover, the linked between Medical Human Capital and
Clinical Process remains significant in the given model.
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Figure 3: BSC original model
(Source: Lovaglio, 2010)
From the findings, it is clear that R2 value of Clinical process and Economy are 0.582 and 0.677.
These values indicate that through applying balance score card method, hospitals and healthcare
professionals would be able to take advantage of clinical process and economy perspectives in an
appropriate manner. Hence, it can be said that balance score card method can be helpful for
organizations in terms of establishing link between various performance indicators and
performance management activities/processes effectively. The result shows that formal training,
the quantity of doctors and the performance of surgical staff are the major factors which can help
professionals to conceptualize the use of BSC in the Health sector. However, along with several
advantages of BSC in health and social care Lovaglio was failed to provide full picture of the
Regional Health system. On the other side, Jakobowicz and Derquenne (2007) argued that
without considering system integration, innovation and the quality of Human resources, health
care practitioners and hospitals would be unable to improve accessibility, clinical efficiency of
Health structures and productivity in an appropriate manner (Jakobowicz and Derquenne, 2007).
From the findings of Lovaglio research, it can be said that future study can be conducted by
considering GSCA or PLS-PM oriented global model building strategies effectively.
Role of BSC in the context of reducing challenges faced by health care enterprises
Gao and Gurd (2014) found that Chinese hospitals has been criticized for poor bonus
system and doctors’ professional ethics. Aggravating patient expense was the other major factor
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which creates issues for the organizations in China. In order to overcome such kinds of issues at
workplace, they suggest that balanced scorecard method will be helpful for hospitals and health
care professionals.They argued that BSC method can play crucial role to improve hospital
performance and solve issue facing by Chines hospitals. In the context of examining the
diffusion and implementation of the BSC in China, investigators used mainly three sources such
as a questionnaire survey, a print-media indicators and content analysis of the published papers.
In this regard, semi-structured interviews with managers of Chinese hospitals were conducted.
Investigator was sent questionnaire to the CEOs of 297 hospitals and all members of the
Shandong Hospitals Association. Out of the total population, 50 respondents from teaching
hospitals and113 respondents (38%) at CEO or senior administrator level participated in the
survey and shared their perception about use of balance score card approach in their day to day
health care operations (Gao and Gurd, 2014).The research evidence indicates that bonus systems
and poor pay of hospital professionals were creating issues for the organizations in order to solve
issues which was faced by enterprise in an appropriate manner.
Researchers identified that tightened budgets of Chinese government, financial pressure,
relatively low salary of medical staff, pressure from staff members and competitive pressure
were the major challenges which created problems for health care professionals and enterprises
in order to implement balance score method in a significant manner. From the survey result of
Gao and Gurd, it is found that majority (93%) of the hospitals heard about BSC but only eight
(7.1%) had implemented this system at their workplace. On the other side, 6 (5.3%) had used
other performance management tools to measure performance of an individual member at the
workplace. They found that BSC provides a more balanced framework for hospitals which helps
organizations to deal with quality, technique, efficiency, workload and development related
issues in an appropriate manner. Result of survey shows an encouraging trend among hospitals to
use BSC and this approach plays an important role in improving hospital operations and staff
motivation. In such kind of critical situation, it is essential for hospitals to find a good
performance system for the purpose of motivating staff and enhancing their contribution towards
organization growth. From customer perspective, BSC can be beneficial for HSC enterprises to
effectively utilize resources and delivering quality of health care services to their patients at the
stipulated time (Gao and Gurd, 2014). Along with this, balance scorecard method can also
helpful for Chinese hospitals to build performance salary systems and reduce challenges faced by
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health care organizations and care home practitioners in a significant manner. However,
Jakobowicz and Derquenne (2007) criticized the fact which was provided by Gao and Gurd
(2014) regarding the role of BSC in financial pressure and hospital improvement. They suggest
that without government support and keeping balance between patient needs, hospital
development and staff motivation, Chinese hospitals would be unable to get real advantages from
implementing balance score card approach at the workplace (Jakobowicz and Derquenne, 2007).
Along with BSC, performance measurement system may be helpful for organizations in
increasing public satisfaction during this period of reform. Besides that, sound benchmarking
data and effective use of performance management platform will be required to overcome
challenges which was faced by health care organizations (Gao and Gurd, 2014).On the basis of
study done by Gao and Gurd, it can be said that further study can be conducted by increasing
sample size and long term analysis in order to ensure management innovation in Chinese
hospitals.
Contribution of BSC in terms of bringinginnovation in strategic performance measurement
systems
Gurd and Gao (2006) argued that BSCs are still in an evolutionary stage in health care
sector. In order to prove their statement, investigators analyzed the published cases of BSC in
health care. In the context of providing answer of research question related to implementation of
BSC, in-depth analysis of multiple BSC cases by collecting primary data in several countries was
done. In this regard, two databases including Ebsco Host and Science Direct were used to
explore issues which come in balance score card approach use. Furthermore, contribution of this
method was measured using case studies related to financial (19), Customer (17), internal
business process (20), learning and growth or innovation and learning (11) and other
perspectives (14). In this regard, Guard and his colleague considered patient retention,
acquisition and satisfaction factors regarding customer perspectives. On the other hand, patient
satisfaction, safety and health, productivity and innovation key indicators were employed to
understand internal business perspectives of individuals in HSC organizations. Moreover, for
learning and growth perspective, human capital, Information capital, continuous innovation and
organization capital related indicators were considered by researchers (Gurd and Gao, 2006).
While, revenue growth and productivity indicators were carried out in order to explore financial
perspective of health care enterprises. From the study, it is found that learning and growth
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perspective was similar to all industries. It can be said that all efforts to achieve balanced
accountability is based on cost, quality and care. However, Gurd and Gao (2006) criticized that
BSCs are still in an evolutionary stage in health care sector.
Diverse forms of BSC were found by researchers regarding to patient satisfaction in
internal process perspectives such as call centre response time, waiting time and solve weekly
patient complaints. From the result of study, it is identified that all BSCs in the healthcare field
appear to be at stage 1 or 2. Patient or customer perspective was at the top of the balance score
card. Findings of Gurd and Gao (2006) provided important insights into the current state of the
use of BSC in healthcare enterprises throughout the world. However, Kaplan and Norton (2001)
have argued that implementation of balance score card in different perspectives highly
influenced from the use of different strategic orientations within health care organizations
(Kaplan and Norton, 2001). Further, they suggest that in order to implement BSC in HSC, it is
essential for hospitals and care home practitioners to emphasize on long-term and short-term,
financial and nonfinancial objectives, efficiency and fairness related factors in the healthcare
industry. Gurd and Gao had argued that it is not an easy task for any organizations to implement
BSC at the workplace because most countries are struggling to contain health costs and patient
needs are also changed.
Performance measurement using strategic scorecard map
Hajdíkova and Zelena (n.d.) explored that correct measuring of the performance and
consideration of key performance indicators are required for HSC organizations in the context of
evaluating efficiency of organization and its use in strategic planning. In order to measure
performance of hospitality industry, researchers had used performance management from
financial perspectives such as depreciation, net profit, personnel costs revenues and subsidies.
Rationale behind conducting this research was to specific focus on health care services and
equipment’s used in hospitals to attain better medical care. However, Gurd and Gao (2006)
criticized that BSCs are still in an evolutionary stage in health care sector.
Due to change comes in lifestyle of people, demand of health and social cares are
increasing continuously. For the purpose of determining performance measures, investigators
were used strategy map to achieve effective performance management (Hajdíkova and Zelena,
n.d.). Different perspectives and objectives from the financial and non-financial point of view
were considered to develop strategy map that can be described as follow.
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Figure 4: Strategy map of objectives for hospital industry
(Source: Hajdíkova and Zelena, n.d)
From the figure, it is identified that non-financial indicators have created high impact on
economic measures and these further reflects criteria’s and sub criteria’s and lead effective
performance of hospitals. In order to establish link between different indicators and links
between the objectives, Hajdíkova and Zelena were developed casual diagram which is explored
as follow.
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Figure 5: KPIs for hospital industry
(Source: Hajdíkova and Zelena, n.d)
Grigoroudis, Orfanoudaki and Zopounidis (2012) were conducted research regarding to
strategic performance measurement in a healthcare organization. Their main aim behind
conducting research was to develop a performance measurement system for public health care
organizations in dynamic changing era. In this regard, they considered distinguished
characteristics of the HSC sector, important financial performance indicators, non-financial
performance indicators, satisfaction of internal and external customers and quality of services
offered by hospitals to their patients in the context of BSC methodology.
In the context of aggregating the marginal performance of KPIs, UTASTAR method was
used regarding the achievement of the defined strategic objectives in a significant manner
(Grigoroudis, Orfanoudaki and Zopounidis, 2012). Performance of enterprise was measured in
terms of financial, customer, internal business process, and innovation-learning key performance
indicators. In order to analyze the behaviour and the cognitive style of the DM, the UTASTAR
method which is a regression based approach adopted by researcher. This method provided result
on different parameters such as financial, customer, internal business process, and innovation-
learning which shows in below figure.
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Figure 6: Financial and customer perspectives
(Source: Grigoroudis, Orfanoudaki and Zopounidis, 2012)
Figure 7: Internal growth and learning & growth indicators
(Source: Grigoroudis, Orfanoudaki and Zopounidis, 2012)
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On the basis of calculated values, Grigoroudis and their colleagues (2012) stated that
redesign the process of diagnosis and taking important actions within stipulated time, these KPI’s
play an important role. However, lack of competition, emphasis on the long-term results,
strategic objectives assessed by the management of the hospital and the social character of the
organizations are the major factors that can influence performance of health and social care
enterprise effectively. Based on the present result researcher’s achieved, it can be said that
significant improvement and active participation of health care professionals will be required for
organizations in order to implement BSC approach in hospitality industry. However, several
other limitations such as assumptions regarding the performance of the assessed criteria and
compensation assumed only on the basis of the BSC system are associated with the present
research (Grigoroudis, Orfanoudaki and Zopounidis, 2012). Nonetheless, future research can be
conducted on the basis of the development of a hierarchically structured balance scorecard
system and dividing it into sub-objectives. From the study done by investigators related to
hospitality sector, it is identified that several critical issues such as align strategic initiatives, link
measures with rewards, communicate and link strategic objectives and clarify and translate
vision etc. can affects implementation process of BSC in HSC.
In addition, Chang, Lin and Northcott (2002) developed NHS performance assessment
framework. On the basis of six dimensions including health improvement, fair access, patient
experience and health outcome of NHS care were considered to measure performance and these
criteria’s reflects both outcome and performance measurement of organization in HSC. They
found that there is a casual relationship between process and outcome measures and this
relationship enables managers and healthcare professionals to effective use of performance
measurement system. However, along with several advantages of BSC in health and social care,
lack of evidence in developing framework and pertinent issue related to effective use of BSC
performance system were created challenges for hospitals and NHS to implement this approach
at workplace (Chang, Lin and Northcott, 2002). Future study regarding to overcome such kinds
of issues can be conducted.
Implementation of balance score method in health care system
Broccardo (2015) argued that it is essential for health care organizations to manage costs
and maintain balance between quality and cost. In modern era, changing lifestyle of people and a
variety of stakeholder groups are putting pressure to HSC companies to measure performance of
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health and social care services and deliver them in lower cost in an effective manner. In this
regard, investigator was conducted an empirical analysis based on an Italian hospital case study.
From the past studies done by different researchers, it is clear that enterprises need a
performance measurement system to quick view of the business. Moreover, by considering four
perspectives which include financial, customer, internal business process and learning and
growth, a quality of performance measurement system can be developed. Further, Broccardo
(2015) explored that for several purposes such as inform patients about disease, deliver quality of
services, permit organizations and practitioners to market their services and leading the
organization in the desired direction etc. health care enterprises can adopt Balance Scorecard
approach.
Besides that, investigators explored the ways of guidelines to apply BSC in health and
social care enterprises in a significant manner. In this regard, empirical analysis of an Italian
hospital has been considered. The main strategic goals behind BSC implementation in hospitals
are extension of hours of clinical service, improvement of care continuity pathways, management
of waiting lists, new activities and development of existing activities and monitor and rationalize
pharmaceutical expenditures (Broccardo, 2015). In order to evaluate strategic map, strategy map
was developed by scholars and indicators were identified which reflects the given strategy map.
Figure 8: The Strategy Map in the Analyzed Hospital
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(Source: Broccardo, 2015)
From the figure, it is clear that to monitor and measure the critical success factor, it is
essential that firm considers cost constraints, process efficiency, and staff presence factors during
implementation of BSC approach at workplace. However, several limitations are associated with
the present results such as the analysis is conducted only on the Italian hospital cases, one
empirical case analyzed, some possible missed articles and few articles found which deals with
such kinds of performance indicators can also affect performance of balance scorecard
implementation in health and social care. The success of BSC approach highly depends on the
effective monitoring and evaluation of this technique. Through considering benchmarking
approach, enterprise can be able to bring long-lasting quality improvements to patient care in
Lebanon (El-Jardali, Saleh and Jamal, 2011). Due to time and resource constraints, only 14
hospitals were selected and limited sample size was taken to represent the whole spectrum of
hospitals in Lebanon. These were the major limitations of study conducted by El-Jardali and
their colleagues.
El-Jardali, Saleh and Jamal (2011) were conducted study to design, implement and
scaling up of the balance score card in hospitals in Lebanon. They implement principles to
measure the quality of patient care in public and private hospitals and improve the quality of
their health services. Step-wise development of the BSC for national hospital can be enlisted as
follow.
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Figure 9: Step-wise development of the BSC for national hospital performance measurement
(Source: El-Jardali, Saleh and Jamal, 2011)
On the basis of study done by Broccardo, it can be said that future study can be conducted by
considering different factors such as critical comparison of the BSC implementation with other
countries and balance score card implementation issues in order to overcome gap present in this
research.
CONCLUSION
Amatraunga and their colleagues explored that for measuring strategic performance of
management in health and social care, BSC tool can play an important role. Lovagli (2010)
found that by applying structured equation modeling, researcher was found that economy and
clinical process dimensions are still endogenous. However, Gurd and Gao (2006) criticized that
BSCs are still in an evolutionary stage in health care sector. Grigoroudis, Orfanoudaki and
Zopounidis (2012) were conducted study to develop a performance measurement system for
public health care organizations in dynamic changing era. Nonetheless, Broccardo (2015) argued
that it is essential for health care organizations to manage costs and maintain balance between
quality and cost.
After conducting vast literature review on balance scorecard, its advantages and
implementation in health care organizations, it is found that different studies were conducted on
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BSC and its deployment in HSC. However, there is not study was conducted regarding to
measurement of marketing of private dental practices using balanced scorecard approach. After
reviewing practical implementations of balance scorecard method in HSC, it can be said that this
approach will be beneficial for researcher in order to investigate real impact of this technique on
health care companies and their performance from finance, customer, learning and growth
perspectives in a significant manner.
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REFERENCES
Amatraunga, D. and et.al., 2002. Application of the balance score card concept to develop a
conceptual framework to measure facilities management performance within NHS
facilities. International Journal of Health Care Quality Assurance. Pp.141.
Broccardo, L., 2015. The Balance Scorecard Implementation in the Italian Health Care System:
Some Evidences from Literature and a Case Study Analysis. Indian Institute of Health
Management Research SAGE Publications.17 (1).pp.25-41.
Chang, L., Lin, W.S. and Northcott, N.D., 2002. The NHS performance assessment framework A
balance score card approach. Journals of management in medicine. pp.345.
El-Jardali, F., Saleh, S. and Jamal, D., 2011. Design, implementation and scaling up of the
balanced scorecard for hospitals in Lebanon: Policy coherence and application lessons for
low and middle income countries. Elsevier Ireland Ltd. pp.305-314.
Gao, T. and Gurd, B., 2014. Meeting the challenge in performance management: the diffusion
and implementation of the balanced scorecard in Chinese hospitals. Oxford University
Press. pp.234-241.
Grigoroudis, E., Orfanoudaki, E. and Zopounidis,C., 2012. Strategic performance measurement
in a healthcare organization: A multiple criteria approach based on balanced scorecard.
Elsevier Ltd.pp.104-119.
Gurd, B. and Gao, T., 2006. Lives in the balance: an analysis of the balanced scorecard (BSC) in
healthcare organizations. International Journal of Productivity and Performance
Management.pp.6-21.
Hajdíková, T. and Zelená, V., n.d. Performance Management: The Proposal of a Strategic
Scorecard’s map for the Hospital Industry.
Jakobowicz, E. and Derquenne, C., 2007. A modified PLS path modeling algorithm handling
reflective categorical variables and a new model building strategy. Comput. Stat. Data
Anal. 51.pp. 3666–3678.
Lovaglio, G.P., 2010. Model building and estimation strategies for implementing the Balanced
Scorecard in Health sector. Springer Science Business Media. pp. 199–212.
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