Using the Balanced Scorecard Approach

1. Using the Balanced Scorecard Approach Based on the management briefing by Shaunagh Robertson to be found at http://www.nelh.nhs.uk/management/mantop/0310balancedscorecard.htm Using the Balanced Scorecard Approach (NeLH- Health Management)

2. What is the balanced scorecard approach? (1) • The balanced scorecard is an approach to strategic performance management and measurement • It was created to provide a rounded view of an organisation’s performance by emphasising the performance drivers of financial objectives as well as their achievement Using the Balanced Scorecard Approach (NeLH- Health Management)

3. What is the balanced scorecard approach? (2) • The scorecard measures organisational performance across four balanced perspectives: • Financial – to succeed financially, how should we appear to our stakeholders? (In the public sector, the financial perspective tends to emphasise cost efficiency) • Customers - to achieve our vision, how should we appear to our customers (patients)? • Internal business processes - to satisfy our stakeholders & customers, what internal processes must we excel at? • Learning and growth - to achieve our vision, how will we sustain our ability to change and improve? Using the Balanced Scorecard Approach (NeLH- Health Management)

4. What is the balanced scorecard approach? (3) • In the past, NHS performance measures were narrowly focused on efficiency • However in 1999, based on the balanced scorecard approach, the NHS Performance Assessment Framework was developed • It highlighted six areas of performance: Health improvement; Fair access to services; Effective delivery of appropriate health care; Efficiency; Patient/ carer experience; Health outcomes of NHS care Using the Balanced Scorecard Approach (NeLH- Health Management)

5. What is the balanced scorecard approach? (4) • The Framework has since been further developed for use in all NHS organisations, based on NHS Plan requirements. • It is supported by a set of performance indicators which have been published as part of the annual NHS performance ratings since 2002 • The Commission for Health Improvement is responsible for assessing the performance of NHS organisations Using the Balanced Scorecard Approach (NeLH- Health Management)

6. Why is it important? • The production and publication of information about NHS performance is important both to enable continuous performance improvement and to inform the public and Parliament Using the Balanced Scorecard Approach (NeLH- Health Management)

7. What are the implications? (1) • The balanced scorecard approach allows organisations to align their performance measures with their strategic mission and goals - enabling them to measure not only performance, but also the factors driving that performance • It can provide a more balanced view of NHS performance than previous internal market-driven measures • It can ensure that performance assessment focuses on those outcomes that matter most to patients and the public Using the Balanced Scorecard Approach (NeLH- Health Management)

8. What are the implications? (2) However: • The benefits of the balanced scorecard approach will largely depend on the quality of both the performance measures used and the data gathered • There are concerns that data quality in many NHS organisations is not sufficiently good to support effective performance management • To resolve these issues, the Department of Health is working with the Audit Commission, the Commission for Health Improvement, the Modernisation Agency, and the NHS Information Authority to improve data quality Using the Balanced Scorecard Approach (NeLH- Health Management)

9. What do I need to do? (1) Read: • The NHS Performance Assessment Framework http://www.doh.gov.uk/pub/docs/doh/paf.pdf • Chapter 6 of the NHS Plan http://www.doh.gov.uk/nhsplan/nhsplan.htm • NHS Performance Indicators: A Consultation http://www.doh.gov.uk/piconsultation/index.htm Using the Balanced Scorecard Approach (NeLH- Health Management)

10. What do I need to do? (2) • Explore the DoH’s NHS Performance Ratings Web site http://www.doh.gov.uk/performanceratings • Visit the Commission for Health Improvement’s Web site http://www.chi.nhs.uk/ • Explore how other NHS organisations have (a) improved the quality of their performance data, and (b) used performance measures as the basis for achieving positive change Using the Balanced Scorecard Approach (NeLH- Health Management)

11. Examples of good practice and contacts • NHS Performance Branch Web site http://www.doh.gov.uk/performanceratings/contacts.htm • Commission for Healthcare Improvement Web site http://www.chi.nhs.uk/ Using the Balanced Scorecard Approach (NeLH- Health Management)

12. Resources (1) Books • Robert S. Kaplan. The Balanced Scorecard for public sector organizations. Harvard Business School Press, 2000 • Paul R Niven. Balanced Scorecard Step-by-Step for Government and Not-for-Profit Agencies. John Wiley & Sons Inc, due for publication July 2003 Using the Balanced Scorecard Approach (NeLH- Health Management)

13. Resources (2) Articles and Papers • K Castaneda-Mendez etc. The role and application of the balanced scorecard in healthcare quality management. Journal of Healthcare Quality, 20 (1), Jan/Feb 1998, pp 10-13 • L Chang etc. The NHS Performance Assessment Framework: A 'balanced scorecard' approach? Journal of Management in Medicine, 16 (5), 2002, pp 345-358 • N Inamdar etc. Applying the balanced scorecard in healthcare provider organizations. Journal of Healthcare Management, 47 (3), May/Jun 2002, pp 179-195 • J Oliveira. The balanced scorecard: an integrative approach to performance evaluation. Healthcare Financial Management, 55 (5), May 2001, pp 42-46 Using the Balanced Scorecard Approach (NeLH- Health Management)

14. Resources (3) Web sites • Visit the www.balancedscorecard.org site that provides guidance in applying balanced scorecard concepts • Visit the Balanced Scorecard Collaborative site led by Kaplan and Norton http://www.bscol.com/ • Visit the DoH’s NHS Performance Ratings site http://www.doh.gov.uk/performanceratings • Visit the Centre for Health Economics site which outlines research related to NHS performance management http://www.york.ac.uk/inst/che/hpolicya.htm Using the Balanced Scorecard Approach (NeLH- Health Management)