Developing A Balanced Scorecard to Measure Organizational ... · Developing A Balanced Scorecard to...

Developing A Balanced Scorecard

to Measure Organizational

Performance

Ed Hardin, Senior Vice President, Beaumont Health

Dennis Mullins, Senior Vice President, Indiana

University Health

FACULTY DISCLOSURES

• Ed Hardin, Nothing to Disclose

• Dennis Mullins, Nothing to Disclose

Agenda

• Review Session Objectives

• Beaumont Health Perspective

• Indiana University Health Perspective

• Audience Q&A

Learning Objectives

1. Analyze the unique opportunities available through the use of the Balanced Scorecard.

2. Describe a Balanced Scorecard and how it can connect strategy and action.

3. Identify Balanced Scorecard strategies that work to enable suppliers to better present their services in ways that help healthcare organizations achieve their goals.

Beaumont Health

Beaumont Health

• Michigan’s largest health system with

–$4.5b in net revenue

–8 hospitals, 168 outpatient sites

–3,400 licensed beds

–87 accredited residency and fellowship programs

–5,000 staff physicians

–35,000 employees

• Service Statistics

–177,508 discharges

–567,658 emergency visits

–17,536 births

Beaumont Health (cont.)

• U.S. News & World Report “America’s Best Hospitals” recognizes 4 Beaumont hospitals in the Top 10 in Metro Detroit

• World-class capabilities in the areas of:

–Cardiology & Heart Surgery

–Neurology & Neurosurgery

–Orthopedics

• Our largest facility, Beaumont Health Royal Oak, is the recipient of the 2017 Vizient Supply Chain Performance Excellence Award (third straight year)

Opening Video

So, Why a Balanced Scorecard?

• Your organization has a multi-faceted strategy, so your scorecard should reflect that dynamic

• You have multiple audiences and multiple audiences have different expectations

• What you report on demonstrates an ability to look comprehensively, work strategically and connect the dots

• If you want SCM to be as more than just a cost reduction function, prove you can walk and chew gum at the same time

• Allows you to publicize the other strengths of your supply chain or perhaps a special interest (you set the agenda!)

Let’s Review the Components

• Column A – What are we measuring?

• Column B – What is the BSC perspective?

• Column C & D – Where is this being measured?

• Column E – How often will it be measured?

• Column F – Where outside the organization can we compare ourselves?

• Column G – What type of an indicator is this?

Strategies That Work

• Get beyond the financial; the BSC must be balanced!

• Your senior leadership – at minimum your CFO and COO – must weigh-in and buy-in to what’s measured

• Connect the dots between each KPI and an organizational strategy

• Each audience member needs to understand that the BSC represents not just their interests but the interests of multi-functional audience - don’t be surprised or discouraged that your audience doesn’t initially care about certain KPIs as this will change

Strategies That Work (cont.)

• The BSC should be intuitive, professional and yes….attractive to view

• Give yourself time to build the BSC and view its development as an iterative process…but start!

• Appoint a point person to collect, bring continuity and rigor to the process of pulling the report together

• Above all else, use the BSC as your consistent message week in and week out; socialize it to such a degree that your audience knows what to expect and direct their conversations with you in that same vein

Supply Chain Balanced ScorecardKey Performance Indicator Perspective

System

Level

Facility

Level Frequency

Nationally

Benchmarked? Type

Supply Expense per Adj Dis, CMI-Weighted (inc drugs) Financial x x Monthly Yes Lagging

Drug Expense per Adj Dis, CMI-Weighted Financial x x Monthly Yes Lagging

Supply Expense as % of NPSR Financial x x Monthly No Leading

Supply Expense as % of Operating Expense (exc D&I) Financial x x Monthly No Leading

Supply Expense to GL Code Financial x x Monthly No Lagging

Total Supply Spend Financial x x Monthly No Lagging

Cost to Serve Operational x Quarterly No Leading/Lagging

Value Analysis Savings Operational x x Monthly Yes Leading

EDI Supplier Spend as % of Total Spend Operational x Monthly Yes Leading

CSC Direct Spend as % of Total Spend Operational x x Monthly No Leading

Inventory Turns (CSC and procedure areas) Operational x x Quarterly Yes Lagging

CSC Fill Rate to Facilities Operational x Monthly Yes Lagging

Diversity Spend as % of Total Spend Operational x Quarterly Yes Leading

Total Reprocessing Spend Operational x x Quarterly No Leading

Contracted Spend as % of Total Spend Operational x x Monthly Yes Leading

Employee Satisfaction / Engagement People x x Quarterly Yes Lagging

Diversity in Management as % of Total Spend People x Quarterly No Lagging

Labor Productivity People x Monthly No Lagging

Lumbar Fusion Length of Stay Quality x Monthly No Leading/Lagging

Lumber Fusion <30 Day Readmission Quality x Monthly No Lagging

C-Section/Vaginal Delivery Length of Stay Quality x Monthly No Leading/Lagging

# Suppliers that Meet Relationship "Gold" Standard Quality x Quarterly No Leading

# Contracts with KPI as Contract Condition Quality x Quarterly No Leading

Indiana University Health

Indiana University Health includes Indiana’s most comprehensive academic health center and is one of the busiest hospital systems in the United States.

PatientsAdmissions 117,245Outpatient Visits 2,629,251Available Beds 2,576ER Visits: 448,044Surgery Cases: 102,206

StaffTeam Members: 25,927

16

What is Strategy Deployment?

• Derived from a Japanese concept – Hoshin Kanri– Hoshin – Compass needle (setting direction)

– Kanri – Management of resource

• It is a structured process aligning and deploying strategic objectives, yearly objectives and action, initiatives, measures and focus throughout entire organization

• The emphasis is on “Doing and Reviewing”

Structured framework for planning, focus and alignment

17

Traditional planning

• No alignment

• Over commitment of stakeholders

• Planning lacks factual data

• Too many, arbitrary, wrong goals and initiatives

• No recovery process when goals are missed

• Weak implementation plans

• The “Good Ideas Club”

Two key failure modes: Lack of effective action planning &

lack of effective corrective action

18

Strategy Deployment versus Operational Management focus

Operational Management• Time focused on daily tactics

• Firefighting and band-aids

• Maintaining a level business

• React to whatever is thrown my way

Standard Work and Managing for Daily Improvement enable

focus on SD breakthrough initiatives

Strategy Deployment Strategy based

Emphasizes stretch and breakthrough thinking

Proactive, not reactive

Moves organization forward by:

Focusing on process

Changes the culture

19

Strategy Deployment Process

Establish Organizational Vision

1 year breakthrough objectives

“the what”

1 year improvement initiatives

“the how”

1 year improvement targets – with

milestones

Deploy through organization

Take Action

Monthly review

Annual review / adjustment

Catchball

SBS

toolsCountermeasure

Analysis

Self

Diagnosis

Planning

Implementation

Review and adjust

to achieve targets

A3

Process

Thinking

3 year strategic plan

(Strategic Objectives)

19

Value Stream Progress

Tracking Progress and Alignment

Scope Legend:

Pillar Scope Metric Type Initial State

Year End

Target % Improve Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Metric Owner

Contermeasures (Links

to A4s)

SBS target

SD actual

target

actual

SBS target

SD actual

target

actualSBS target

actual

target

actualSBS target

actual

target

actual

SBS target

actual

target

actualSBS targetSD actual

target

actual

SBS target

actual

target

actual

Pillar Scope Driver / Metric Initial State

Targets or

Limits % Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Metric Owner


to A4s)

MONTH planSD actual

YEAR plan

actual

plan

SD actual

plan

actual

plan

SD actual

plan

actual

plan

SD actual

plan

actual

YEAR

to date

Service

Patient Connected

w/Physician in Timley

Manner Go

al

MONTH

to date

MONTH

to date

YEAR

to date

MONTH

to date

YEAR

to date

ServicePatient Referral to

Primary Care

Wa

tch

MONTH

to date

YEAR

to date

Finance &

Growth

Increase Patient

Acquisition Go

al

Quality &

Safety

% Cases Where Protocol

was Followed Go

al

Service Net Promotor Score

MONTH

to date

YEAR

to date

MONTH

to date

MONTH

to date

MONTH

to date

YEAR

to date

YEAR

to date

SBS = System Balanced Scorecard

SD = Strategy Deployment

TPOC = Transformation Plan of Care

Go

al

Go

al

Wa

tch

Service Patient Satisfaction

Finance &

GrowthOperating Income Loss

Go

al

Quality &

Safety

% Patients Receiving

Prescriptions

Wa

tch

Quality &

Safety


Oral Antibiotics

Wa

tch

YEAR

to date

Finance &

GrowthAchieve Visit Targets

MONTH

to date

YEAR

to date

Quality &

Safety

% Cases Protocol

Followed with Antibiotics

Go

al

Video Visits - Level 1 TRACKERMetric Legend: Red = Not meeting target & requires countermeasure

Green = Meeting target

Black = Not applicable in current month

Yellow = Measure needs populated by owner

System Balanced Scorecard

MONTH

to date

YEAR

to date

TPOC & Strategy Deployment Metrics (that do not live on the System Balanced Scorecard)

Weight Goal Description Creator Supply Chain Alignment

30% 25% MetricMaximum = Decrease by 16% or achieve top quartile 880

Target = Decrease by 13% 912

Threshold = Decrease by 10% 943

Maximum = Achieve or maintain 90th %tile 3

Target = Achieve or maintain 70th %tile 2

Threshold = Achieve or maintain 50th %tile 1

Target = Achieve or maintain 70th %tile

15% 25%Maximum = +1 raw percentage point improvement over 2016 actual

Overall Rating of Care4

Target = +.5 raw percentage point improvement over 2016 actual


Threshold = >0 raw percentage point improvement over 2016 actual


Maximum = +1 raw percentage point improvement over 2016 actual












20% 20%4.06 4 4.06 4

4.05 3 4.05 3

4.04 2 4.04 2

19.70% 4 19.70% 4

20.90% 3 20.90% 3

22.50% 2 22.50% 2

3.88 4 3.88 4

3.84 3 3.84 3

3.79 2 3.79 2

WA

TC

H M

ETR

IC

30 Day Readmit Percent

J. Gottlieb

Pediatric Population Health Dashboard: All pediatric population health region scores on the 10 Peds

measures (except CG-CAHPS) roll up equally into 1 System score.

5%

Harm Dashboard: Achieve and maintain top quartile performance or decrease total harm events

over the course of the year from 2016 year end performance.

2017 OPERATIONAL GOALS - SYSTEMPerformance Management

R. Chadderton

5%Provider Office Visit

(Facilities where Value Based Purchasing does not apply will have a goal to grow at +.5 raw

percentage points)

Length of Stay: All LOS region scores (O/E using appropriate risk model) roll

up equally into 1 system score.

5%Outpatient


percentage points)

QUALITY & SAFETY

20%

SERVICE

5%Inpatient

(Hospitals below Value Based Purchasing threshold will have a goal to achieve an overall rating score

aligned to full reimbursement)

BU Regional metrics only.

L. Dunlap

5%Create a more engaging work environment where employees are committed. Increase score on the

Employee Engagement Survey Engagement Indicator (EI) based on previous performance level.

1st year Turnover

5%

5%Population Health: All Population Health region scores on the 12 measures

(except CG-CAHPS) roll up equally into 1 system score.

Link

Link

PEOPLE

Cascade


10%

Create a more engaging work environment where providers are committed. Increase score on the

Provider Engagement Survey Engagement Indicator (EI) based on previous performance level.

Carli

Derrick and Kumbia

Create a more engaging work

environment where providers

are committed. Increase score

on the Provider Engagement

Survey Engagement Indicator

(EI) based on previous

performance level.

Establishment of Executive

Value Analysis Team (EVAT)

to provide guidance and

oversight of the Value

Analysis process

Construction and

implementation of

Integrated Service Center


environment where

employees are committed.

Increase score on the

Employee Engagement



performance level.

1st year Turnover

System Goals Alignment

System Metric Alignment

Indiana University Health includes Indiana’s most comprehensive academic health center and is one of the busiest hospital systems in the United States.

PatientsAdmissions 117,245Outpatient Visits 2,629,251Available Beds 2,576ER Visits: 448,044Surgery Cases: 102,206

StaffTeam Members: 25,927

29

What is Strategy Deployment?

• Derived from a Japanese concept – Hoshin Kanri– Hoshin – Compass needle (setting direction)

– Kanri – Management of resource

• It is a structured process aligning and deploying strategic objectives, yearly objectives and action, initiatives, measures and focus throughout entire organization

• The emphasis is on “Doing and Reviewing”

Structured framework for planning, focus and alignment

30

Traditional planning

• No alignment

• Over commitment of stakeholders

• Planning lacks factual data

• Too many, arbitrary, wrong goals and initiatives

• No recovery process when goals are missed

• Weak implementation plans

• The “Good Ideas Club”

Two key failure modes: Lack of effective action planning &

lack of effective corrective action

31

Strategy Deployment versus Operational Management focus

Operational Management• Time focused on daily tactics

• Firefighting and band-aids

• Maintaining a level business

• React to whatever is thrown my way

Standard Work and Managing for Daily Improvement enable

focus on SD breakthrough initiatives

Strategy Deployment Strategy based

Emphasizes stretch and breakthrough thinking

Proactive, not reactive

Moves organization forward by:

Focusing on process

Changes the culture

32

Strategy Deployment Process

Establish Organizational Vision

1 year breakthrough objectives

“the what”

1 year improvement initiatives

“the how”

1 year improvement targets – with

milestones

Deploy through organization

Take Action

Monthly review

Annual review / adjustment

Catchball

SBS

toolsCountermeasure

Analysis

Self

Diagnosis

Planning

Implementation

Review and adjust

to achieve targets

A3

Process

Thinking

3 year strategic plan

(Strategic Objectives)

32

Value Stream Progress

Tracking Progress and Alignment

Scope Legend:

Pillar Scope Metric Type Initial State

Year End

Target % Improve Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Metric Owner


to A4s)

SBS target

SD actual

target

actual

SBS target

SD actual

target

actualSBS target

actual

target

actualSBS target

actual

target

actual

SBS target

actual

target

actualSBS targetSD actual

target

actual

SBS target

actual

target

actual

Pillar Scope Driver / Metric Initial State

Targets or

Limits % Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Metric Owner


to A4s)

MONTH planSD actual

YEAR plan

actual

plan

SD actual

plan

actual

plan

SD actual

plan

actual

plan

SD actual

plan

actual

YEAR

to date

Service

Patient Connected

w/Physician in Timley

Manner Go

al

MONTH

to date

MONTH

to date

YEAR

to date

MONTH

to date

YEAR

to date

ServicePatient Referral to

Primary Care

Wa

tch

MONTH

to date

YEAR

to date

Finance &

Growth

Increase Patient

Acquisition Go

al

Quality &

Safety

% Cases Where Protocol

was Followed Go

al

Service Net Promotor Score

MONTH

to date

YEAR

to date

MONTH

to date

MONTH

to date

MONTH

to date

YEAR

to date

YEAR

to date

SBS = System Balanced Scorecard

SD = Strategy Deployment

TPOC = Transformation Plan of Care

Go

al

Go

al

Wa

tch

Service Patient Satisfaction

Finance &

GrowthOperating Income Loss

Go

al

Quality &

Safety


Prescriptions

Wa

tch

Quality &

Safety


Oral Antibiotics

Wa

tch

YEAR

to date

Finance &

GrowthAchieve Visit Targets

MONTH

to date

YEAR

to date

Quality &

Safety

% Cases Protocol

Followed with Antibiotics

Go

al

Video Visits - Level 1 TRACKERMetric Legend: Red = Not meeting target & requires countermeasure

Green = Meeting target

Black = Not applicable in current month

Yellow = Measure needs populated by owner

System Balanced Scorecard

MONTH

to date

YEAR

to date

TPOC & Strategy Deployment Metrics (that do not live on the System Balanced Scorecard)

Weight Goal Description Creator Supply Chain Alignment

30% 25% MetricMaximum = Decrease by 16% or achieve top quartile 880

Target = Decrease by 13% 912

Threshold = Decrease by 10% 943

Maximum = Achieve or maintain 90th %tile 3

Target = Achieve or maintain 70th %tile 2

Threshold = Achieve or maintain 50th %tile 1

Target = Achieve or maintain 70th %tile

15% 25%Maximum = +1 raw percentage point improvement over 2016 actual


















20% 20%4.06 4 4.06 4

4.05 3 4.05 3

4.04 2 4.04 2

19.70% 4 19.70% 4

20.90% 3 20.90% 3

22.50% 2 22.50% 2

3.88 4 3.88 4

3.84 3 3.84 3

3.79 2 3.79 2

WA

TC

H M

ETR

IC

30 Day Readmit Percent

J. Gottlieb

Pediatric Population Health Dashboard: All pediatric population health region scores on the 10 Peds

measures (except CG-CAHPS) roll up equally into 1 System score.

5%

Harm Dashboard: Achieve and maintain top quartile performance or decrease total harm events

over the course of the year from 2016 year end performance.

2017 OPERATIONAL GOALS - SYSTEMPerformance Management

R. Chadderton

5%Provider Office Visit


percentage points)

Length of Stay: All LOS region scores (O/E using appropriate risk model) roll

up equally into 1 system score.

5%Outpatient


percentage points)

QUALITY & SAFETY

20%

SERVICE

5%Inpatient

(Hospitals below Value Based Purchasing threshold will have a goal to achieve an overall rating score

aligned to full reimbursement)


L. Dunlap

5%Create a more engaging work environment where employees are committed. Increase score on the

Employee Engagement Survey Engagement Indicator (EI) based on previous performance level.

1st year Turnover

5%

5%Population Health: All Population Health region scores on the 12 measures

(except CG-CAHPS) roll up equally into 1 system score.

Link

Link

PEOPLE

Cascade


10%

Create a more engaging work environment where providers are committed. Increase score on the

Provider Engagement Survey Engagement Indicator (EI) based on previous performance level.

Carli

Derrick and Kumbia


environment where providers

are committed. Increase score

on the Provider Engagement



performance level.

Establishment of Executive

Value Analysis Team (EVAT)

to provide guidance and

oversight of the Value

Analysis process

Construction and

implementation of

Integrated Service Center


environment where

employees are committed.

Increase score on the

Employee Engagement



performance level.

1st year Turnover

System Goals Alignment

System Metric Alignment

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