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Anesth Analg 2002;95:1731-1738 © 2002 International Anesthesia Research Society
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Abstract |
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IMPLICATIONS: The study goal was to show how Balanced Scorecard, a modern management tool based on score numbers, can efficiently be applied to a university anesthesiology department. Nineteen score numbers were established in four perspectives. Meaningful results were obtained with limited resources to support a process of innovation and improvement.
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Introduction |
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Patients, authorities, insurance companies, students, anesthesiologists, nurses, technicians, surgeons, and other stakeholders increase the demands on anesthesiology departments. Chairmen are forced to both quantitatively and qualitatively optimize their performance. However, most chairmen are not trained in management and therefore lack the tools with which to systematize and adequately monitor clinical and academic performance. Frequently, the needs of the stakeholders are not known; indeed, some stakeholders may not even have been identified. Furthermore, as competition between medical centers for money, patients, and manpower increases, a purely operational managerial style runs the risk of neglecting strategically important issues. Balanced Scorecard (BSC), a modern management tool introduced in 1990 by Kaplan and Norton (1) from the Harvard Business School, supports goal-oriented strategies by applying repeated measurements across the following four perspectives of the management process (1):
- The earning and growth perspective: Can we continue to improve and create value?
- The internal business process perspective: What must we excel at?
- The customer perspective: How do our customers see us?
- The financial perspective: How do we look to our shareholders?
A well-trained, motivated co-worker will perform best in a well-organized process; this in turn will lead to satisfied customers who are willing to pay adequately so that the financial demands of the enterprise are satisfied. Thus, all score numbers must be related directly or indirectly to the ultimate goal of increasing profit. These four perspectives can be investigated independent of the type of the institution, however different performance indicators must be used. The value of these indicators can be influenced directly by administration and staff, thereby encouraging changes in behavior and activities. BSC requires managers to define the strategy of the organization. The scores used in BSC can either be lagging indicators that measure what has happened (outcome, cost, revenue, and quality) or leading indicators that measure the building of capacities to improve performance (use of guidelines and teaching performance).
Whereas BSC was originally intended for commercial and manufacturing companies, its multidimensional approach makes it a suitable tool for the complex setting of an anesthesiology department. Implementations of BSC in various health care institutions, with a subsequent increase in both profit and patient satisfaction, have been described previously (2–7). However, the introduction of BSC in health care has been hampered because many of the conditions for the use of BSC are not yet (8) in most hospitals; for example, strategies, tactical objectives, and performance measurements are not identified, and data collection tools, such as a data warehouse system, are lacking. Further, the feedback control loops consisting of data measurement, managing strategy, and process refinement are only partially in place.
The goal of this study was to show how an anesthesiology department can define BSC score numbers and efficiently apply and use them to derive effective actions so that we better meet stakeholder expectations. These data are to be compared with data from other departments within the same hospital. Besides clinical aspects, the specific academic aspects of a university hospital should also be considered. The system should allow for comparison independent of the institution and the specialty.
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Methods |
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The University Hospital of Bern, Switzerland, is a legally independent institution. The state adds <50% to the income provided from the insurance companies; because the rest has to be obtained through careful management, our hospital has an incentive to provide an efficient service. Their Anesthesiology Department is responsible for full-scale anesthesiology services including heart and liver transplantation surgery, acute and chronic pain clinic, and emergency service. It has 33 residents, 35 staff, five faculty members, and 90 nurses. Among the 27,300 annual anesthetic procedures, we perform 15,265 general anesthetics, 4817 regional anesthetics, 1133 combined anesthetics, 3005 cannulations, and 3121 other procedures (pain clinic interventions, resuscitations, or standby). The total costs amount to 24,781,000 Swiss francs (US$ 14 million). (All data given are for the year 2000.)
The process of introducing BSC was managed in 10 steps, as described by Oliveira for a cardiology center (8), and lasted from April to October 2001.
Step One: Building a Business Case
The faculty of the Anesthesiology Department, as well as that of the Intensive Care and the Emergency Departments, at Bern decided to support a BSC project. A project team was formed with five staff members and a representative of the hospital administration.
Steps Two and Three: Identifying Management Strategies and Tactical Objectives
The three units had no preexisting explicitly defined management strategies. Furthermore, the claims of the stakeholders in these units were unclear. The project team established a list of the eight most important stakeholders, i.e., patients (patient organizations), department co-workers, house surgeons, insurance companies, the government, the university, and medical students. Eight staff members were then asked to rate the expected impact and interest of these stakeholders on the organization of the department by distributing 100 points among the eight stakeholders (Fig. 1). Representatives of these stakeholders were then surveyed by means of standardized inventories that elicited their most important claims on the three units. They were also asked to assign a numerical score by which the fulfillment of these claims could be verified. A total of 29 persons filled in 54 inventories. This information provided the basis for the definition of management strategies and tactical objectives by the project team and their subsequent discussion and approval by the faculty of the three units.
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Achieving a large financial profit was not considered to be the only main goal of our institution (score number 16 in Table 2). Instead, the strategic objective of a high evidence-based medical benefit (score number 18 in Table 2) and incentives to reduce costs (score number 17 in Table 2) were also used for the profit perspective.
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Step Four: Identifying Performance Measurements
The scores awarded by the stakeholders were rated by applying the criteria listed in Table 1. A total of 18 scores were defined by selecting the numbers with the highest ratings (Table 2). In the collaborator questionnaire, some of the score numbers contained additional questions to allow for more detailed information.
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Step Five: Identifying Data Sources
Because the hospital did not have a preexisting data collecting system, available and readily accessible data sources had to be defined. A questionnaire for co-workers was considered a valid data source to obtain information about all perspectives. The quality of patient care and the work process were thus indirectly assessed. Data obtained from this questionnaire and data from other sources were all normalized to a scale ranging from 0% (worst) to 100% (best).
Steps Six, Seven, and Eight: Creating the Data Warehouse, Selecting Information Technology, and Creating the BSC
All data were entered into an Excel spreadsheet and presented in a condensed table (Table 3) where ratings less than 50% appeared as "alarm," ratings between 50% and 80% as "warning," and ratings more than 80% as "positive information." The critical results are thus apparent at a quick glance, and the data can easily be modified and supplemented.
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Step Nine: Managing the Strategy
The results with the lowest scores and the highest potential for changes in terms of cost, acceptance, and time required to achieve these changes were chosen, and a time schedule was established to facilitate the rapid realization of improvements.
Step Ten: Refining and Reusing
Repeated measurements are scheduled, and if required, corrective actions are undertaken. The BSC system can thus be improved and adapted to new needs.
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Results |
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The project took place from April to October 2001. The stakeholder analysis for the three departments is shown in Figure 1. The state, represented by the hospital administration and departmental co-workers, is assigned the highest weight, whereas students, suppliers, and the university are assigned the lowest. The patients are not considered to have a high impact on or a high interest in our department.
Of the 692 inventories distributed to the collaborators, 336 were returned (49%). The data for the Anesthesiology Department and the mean for all three departments are shown in Table 3. The three units showed a similar profile. All had low scores in the organization of the work process and in the perspective of profit.
Several scores, such as absence because of illness, could not be measured because the hospital administration does not have the required information. As to the knowledge and innovation perspective, the average level of collaborator satisfaction could be shown, with the main negative factors being a lack of training definitions and an apparent inequality of salaries. The research activity per person was insufficient. From the process perspective, a generally ill-defined and poorly structured work process was found, and collaborators stated that they wasted a great deal of time because of this. For the customer perspective, patient care was considered sufficiently state-of-the-art but inadequate in terms of organization. Patient information and patient feedback were not considered to be always optimal and structured. For the profit perspective, collaborators did not feel that they had incentives to economize resources (time, drugs, or equipment). Important information on financial profit and the average evidence level of our actions was lacking.
These results increased the awareness among faculty and staff members that immediate action had to be undertaken. Based on the scores and cost/benefit calculations, emphasis was placed on the following issues: (a) establishing a structured teaching system, (b) improving patient information and feedback from patients to physicians and nurses, (c) defining and improving patient processes, (d) evaluating the evidence levels of daily routine activities according to the rules of evidence based medicine (9,10), and (e) establishing financial scores. A task force was formed to help implement the changes and to reevaluate the performance of the institution.
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Discussion |
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We describe the introduction of BSC in an anesthesiology department and two other comparable units of a university hospital. The main deficiencies were identified as belonging to the process management and cost-effective financial aspects. These data allowed the definition of strategies for improvement. Actions could be initiated in those areas where especially low scores were found and where the potential for change was highest.
The results are mainly based on a questionnaire distributed to departmental co-workers. This is a cost-effective method for the rapid collection of data, some of which are obtained indirectly. The questionnaire mirrors subjective feelings, and data were not validated; however, a frequent and consistent dissatisfaction with the training system and the process of work flow was found. Even if this is a subjective perception, we must consider this as a true deficiency. The small response rate (49%) to our questionnaire from the collaborators may have produced biased survey results; however, it may be interpreted as an indicator for collaborator disinterest and resignation. Thus, missing data (see also Table 3) must be interpreted as a deficiency.
The main benefits of BSC were found to be the following: (a) It covers a broad range of objectives besides purely financial issues. Even the academic interests of a department can be addressed (6). (b) It gives an incentive to those not routinely involved with management tasks and who are not familiar with economics because the principles of BSC can be easily understood and has well-defined actions (Table 3) that have to follow an assessment. (c) It allows for a rapid comparison of the overall performance between different institutions and specialties. And (d) its systematic application results in measurable improvements in terms of efficiency and quality.
The main problems were found to be: (a) Benchmark data on leading and lagging indicators have not yet been defined in the field of anesthesiology. Thus, benchmarking to other similar institutions is not yet possible. We hope that the criteria given in Table 1 may help others to develop useful score values. If standardized score numbers were accepted, benchmark values could be elaborated and made available. (b) Negative publicity in the case of bad score numbers. For example, when the results showed low scores, the method as such was criticized, and staff members were afraid of negative publicity, specifically because other units in the hospital were not conducting a similar investigation. Thus, how such results are going to be handled has to be defined in advance, and as long as BSC is introduced on a voluntary basis, disadvantages to the BSC-active units have to be prevented. (c) A surprise attack of collaborators. In our case, participants complained that the rate of progress of the project was too fast, specifically for those who were not familiar with a strategic approach. It takes time to repetitively inform all participants on the background and goals of such a project, the work process, and the actions to be taken. A questionnaire needs to be submitted to a pilot test before it can be used on a broad scale. An appropriate time schedule would be one to two years. (d) Inadequate involvement of faculty members resulted in the delegation of responsibility to junior staff members, insufficient identification with the project, and a lack of willingness to initiate true improvements. (e) Inadequate hospital-wide support. Because BSC had not been introduced on a hospital-wide scale, the central accounting unit was not able to deliver adequate statistics. (f) A lack of tools. Suitable software tools such as a data warehouse to routinely collect and process data were not available. (g) Ill-defined profit perspective. For many activities, the health insurance companies, regardless of the true performance, pay only flat fees. Because the Anesthesiology Department does not bill the patients directly, a financial profit cannot be computed. Because the ultimate goal of a public hospital is not to make a financial profit but to improve health in the community, the available resources should be used to achieve this goal on a basis of best evidence. Unfortunately, the question of whether our medical actions were based on the best evidence could not be answered. This would require an investigation in which the routine clinical actions are evaluated using the criteria of evidence-based medicine, probably following the method described by Myles et al. (10).
The main take-home messages are given in Table 4. Score numbers must be chosen in a way that they can be intuitively understood and supported by a great number of collaborators and are apparently related to the ultimate result of the daily work. It is not required to adapt the BSC concept to specific hospital situations. It is sufficient to create meaningful score numbers that integrate the stakeholder interests. A BSC improvement process takes years, and repetitive assessments are important. To be effective, the central management processes such as budgeting must be tied to the BSC scores.
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In conclusion, we have presented an efficient approach to introducing a BSC in an anesthesiology department with special consideration of the academic aspects of teaching and research. Four perspectives of the activities of the department could be evaluated effectively. In many areas, especially in those fields that deal with human resources and process management, considerable improvements can be obtained at moderate costs. Even if the full implementation of BSC takes several years, we are convinced that it is a highly useful tool for improving the management of an anesthesiology department.
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Acknowledgments |
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I thank Mr M. Gutfeldt for collecting and processing the data and Mrs H. Murray and Dr H. Rieder for reviewing the manuscript.
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References |
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- Kaplan RS, Norton DP. The balanced scorecard: translating strategy into action. Boston, MA: Harvard Business School Press, 1996.
- Mathias JM. Balanced scorecard helps ORs to weigh clinical, fiscal issues. OR Manager 2001; 17: 17–20.
- Gordon D, Carter M, Kunov H, et al. A strategic information system to facilitate the use of performance indicators in hospitals. Health Serv Manage Res 1998; 11: 80–91.[Medline]
- Graumlich JF, Belknap SM, Bullard SA, et al. Pharmaceutical care of postoperative nausea and vomiting: balanced scorecard for outcomes. Pharmacotherapy 2000; 20: 1365–74.[Web of Science][Medline]
- Wachtel TL, Hartford CE, Hughes JA. Building a balanced scorecard for a burn center. Burns 1999; 25: 431–7.[Web of Science][Medline]
- Rimar S, Garstka S. The balanced scorecard: development and implementation in an academic clinical department. Acad Med 1999; 75: 14–122.
- Meliones J. Saving money, saving lives. Harv Bus Rev 2000; 78: 57–67.[Web of Science][Medline]
- Oliveira J. The balanced scorecard: an integrative approach to performance evaluation. Healthc Financ Manage 2001; 55: 42–6.
- Sackett DL, Straus SE, Richardson WS, et al. Evidence based medicine. Edinburgh, Scotland: Churchill Livingstone, 2000.
- Myles PS, Bain DL, Johnson F, McMahon R. Is anaesthesia evidence-based: a survey of anaesthetic practice. Br J Anaesth 1999; 82: 591–5.
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