Professional Practice Brief PPB – 0043.17

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A professional practice brief consists of two major categories; both designed as professional development (PD) tools to advance health information professional practice and standards to support the delivery of quality healthcare. A PPB may relate to either category, or both. The two major categories are as follows: Guidelines for Practice Professional Resource

Table of Contents Introduction ............................................................................................................... 1 What is a Balanced Scorecard? .................................................................................... 1 Purpose of a Balanced Scorecard ................................................................................. 2 How to Develop a Balanced Scorecard .......................................................................... 2

Stakeholder Identification ........................................................................................ 3 Indicator & Measurement Development .................................................................... 3 Indicator Definition ................................................................................................. 3 Data Source Identification ........................................................................................ 4 Target Development ................................................................................................ 4 Indicator Status ...................................................................................................... 4 Indicator Status Definition ....................................................................................... 5 Detailed Analysis ..................................................................................................... 5 Action Plans ............................................................................................................ 5

Utilization of Balanced Scorecards ................................................................................ 5 Evaluation of Balanced Scorecards ............................................................................... 6 The HIM Professionals Role in Balanced Scorecards ....................................................... 6 References ................................................................................................................. 7 Appendix I – BSC examples ......................................................................................... 9 Special Thanks to Authors and Reviewers ................................................................... 16

May 2017

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Balanced Scorecard

Introduction This PPB focuses on Balanced Scorecard (BSC) development and provides a high level walk-through of how to develop a BSC. Dashboards, indicator development, and BSC software/system vendors are not covered in this PPB.

What is a Balanced Scorecard? In recent years, health care organizations have been facing increasing requirements for accountability in multiple areas of healthcare provision. Many studies have suggested approaching accountability from the following perspectives: healthcare professionals, administration, quality, cost, and performance (Beckham, 1997; Hendee, 2008; Nunes, Brandao & Rego, 2011; Nurunnabi & Islam, 2012; Oyetunde & Brown, 2012). To demonstrate accountability, healthcare facilities must implement effective strategies and key performance indicators (KPIs) that support the organizational strategy. Using a performance management tool such as a balanced scorecard is a valuable asset to the management team for decision making. Other research studies suggested that there was a lack of focus on strategy implementations by healthcare organizations around patient-centred care (Groene, 2011; Groene & Jorgensen, 2005; Medves et al., 2010). Therefore, a BSC approach can be used to improve the performance management framework, strategy implementations, and performance monitoring for healthcare organizations. A BSC is a set of measures derived from the strategies and overall vision of an organization to communicate strategies and stimulate changes for the management team (Kaplan & Norton, 2001). These measures are considered to be “balanced” as they cross multiple domains or categories, such as safety, quality, financial, performance, and human resources. Based on past BSC research, these domains are considered to be indicative of overall performance in an organization (Tonchia & Quagini, 2010). The main components of a BSC include:

• category name • indicator name • current value • previous value • target • intended direction/trend, and • status for each of the indicators

Please refer to Appendix I for examples of BSCs from several organizations.

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Each domain contains a list of indicators aimed at measuring performance in alignment with an organization's strategy. Each indicator has a defined target. Targets are established collaboratively by key stakeholders across the organization and take into account internal or external benchmarks and organizational performance over time. The BSC is made transparent across all levels of the organization to communicate how well it is performing towards achieving strategic goals and desired outcomes. Often times, these indicators are cascading throughout the organization linking the key performance indicators to different owners. This creates a shared accountability which is vital for organizational success. By taking on the BSC approach in performance management, healthcare organizations have seen significant performance improvements in the area of operations, clinical quality of care, and financial health (Hansel & Seaman, 2012).

Purpose of a Balanced Scorecard The purpose of a BSC is to support healthcare management with a tool that promotes improved performance and quality. Aligning indicators with operational level goals helps support the higher level organizational strategic goals. Scorecards are meant to provide a snap shot of the organization’s performance at a given time. The BSC is also a visual management tool which provides a high-level overview of various indicators to track the performance and outcomes achieved according to strategic goals. Indicators are a set of quantifiable measures of the business and clinical areas of the organization. Driven by the board and the leadership team, indicators are used to monitor the performance of the organization’s broader operational and strategic goals. Indicators may include multiple areas of the organization’s health, including financial stability, hospital accountability agreements, quality, patient safety, and human resources. The indicators are tracked and monitored on an ongoing basis, typically monthly, and reported quarterly to the organization’s senior leadership team and Board of Directors. A BSC provides an overview of whether an organization’s performance is meeting their set targets by demonstrating areas that are performing well and highlighting those areas which need more attention. This is typically done through the stop lighting system, which identifies the status of an indicator in a period of time. Organizations often choose the threshold or criteria for each status, identifying the red/yellow status for areas needing improvements and green status for indicators that are performing well. It is important that ownership of each indicator is well defined and agreed upon early in the development process. Ownership ensures accountability for indicator performance and contributes to successful strategy execution.

How to Develop a Balanced Scorecard The development of a BSC is created through different activities: stakeholder identification and engagement, indicator & measurement development, definition, data source

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identification, target development, indicator status definition, detailed analysis for indicators, and action plans, if any.

Stakeholder Identification Stakeholder identification should be done before any other activities. According to Business for Social Responsibility (2014), there are four main steps of stakeholder identification: identifying, analyzing, mapping, and prioritizing.

1. Identifying – this involves making a list of all relevant people and their respective portfolio or departments within an organization.

2. Analyzing – this step relates to focusing in on and understanding each stakeholder’s perspective and interests.

3. Mapping – step three involves drawing a map for all key people identified, outlining their relationships and relevant objectives.

4. Prioritizing – and finally, putting all identified stakeholders in an order where ranking can be established based on issues identified or level of engagement.

Once all key stakeholders have been identified through this exercise, the engagement with this group can begin to support the development of indicators and performance measures.

Indicator & Measurement Development Interviews and consultation with stakeholders can be completed for the first phase of indicator development. In healthcare, there are copious amounts of indicators that currently exist and many are embedded in various agreements or funding models. As a starting point, facilities in Ontario for example may choose to look at existing indicators that are part of their Hospital Service Accountability Agreement (H-SAA), Quality Improvement Plans (QIPS) or specific Quality Based Procedures (QBPs). In addition to these indicators, the selected indicators should be closely linked to outcome measures that support the strategic and operational goals of the organization and reflect the priority and performance criteria. The alignment of indicators for the BSC with H-SAA, QIP, QBPs or publically reported indicators will help to reduce the workload and minimize duplication of discussions for management in multiple channels that touch on indicator performance. Other provinces and territories would need to look at local ministry initiatives to support their specific indicator development and reporting. In large multi-site organizations, corporate level and site-specific indicators should be distinguishable from one another on the BSC. Therefore, indicators by site or an overall organizational reporting level should be separately reported for different interest groups and stakeholders.

Indicator Definition Definitions of an indicator will serve as the basis for readers to understand the rationale, indicator calculations, and inclusion and exclusion criteria. The indicator definition should be included in the detailed page of the BSC (such as examples shown in Appendix I). A definition should include specifications on how the indicators are calculated, plus any inclusion and exclusion criteria for that indicator and, if applicable, detailed information on what is included in the numerator and dominator. Understanding the definition of the

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indicator will assist management in identifying areas of focus at the operational level to support initiatives or strategies that will impact the indicator performance.

Data Source Identification In the indicator development process, identification of the data source(s) is required. There are many different databases, both from an internal and external perspective (e.g. CIHI data holdings, internal organization registration data set, etc.). One of the drivers behind what data source is used is dependent on the indicator definition, as some indicators can only be calculated using CIHI data versus an internal data source that is manually collected, such as hand hygiene. Ideally, data would be available in such a manner to enable reporting at a detailed site level and also roll up to a complete corporate level when possible.

Target Development Every indicator requires a target in which the result of an indicator for a specific reporting period is measured against. In determining the most appropriate target for an indicator, consultation with the stakeholders is essential as this value is what will drive future action plans. If the target is too low, the indicator may always be green; alternatively, if the target is too much of a stretch or ‘zero’, the indicator may always be red. In determining the target, a variety of methods are used including benchmarking, best practice or baseline improvements or a combination thereof. Benchmarking is closely associated with finding and implementing best practices (Bullivant, 1994). Some indicators already have benchmarks or best practices developed and identified based on studies and literature. Baselines are created by looking at multiple years of data and then creating a target based on a group of retrospective data points that serve as the basis for comparing individual cases (Isenberg, 2004). In other words, a baseline is an average of indicator values for a certain period of time. The purpose of baseline development is to measure and compare the current indicator value to its past performance average. For each indicator, baseline data need to be collected to identify the starting point from which progress is examined. When an indicator is measured against its baseline, it means to drive towards better performance and quality than past performances. If an indicator value is not achieving the expected performance result, it will help the management team to start questioning why – why couldn’t we keep up with our own past performances?

Indicator Status The performance of indicators on a BSC is generally shown in a color coded status. There are usually three types of status for an indicator - green, yellow, red. Green usually means an indicator is performing well in comparison to its benchmark or target. Yellow may represent an improvement for the indicator from its previous reporting time frame, but indicates it is still not achieving optimal results in comparison to its benchmark or target; some attention should be focused on indicators with a yellow status. Red status should always be noted with more focused attention. Red status shows that an indicator did not improve since the previous reporting time frame and current indicator value is not achieving its benchmark or target (See Appendix I for examples). When interpreting

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results on a BSC it is important to also look at trending. For example, an indicator may be green but when looking at the trend, it may indicate the trending in performance is down from the previous reporting period. A close eye needs to be kept on green and yellow performing indicators that are trending in the wrong direction. If not, an organization may miss important indicators of pending poor performance.

Indicator Status Definition Definitions will serve as the basis for readers to understand the why and how behind each indicator calculation. Each indicator definition should be included in the detailed page of BSC (such as examples shown in Appendix I) or as meta-data in a business intelligence system. A definition should include the numerator and denominator, the data source, how the target was determined, what the acceptable limits are in terms of performance corridors and who is accountable for the performance of that indicator. This will help the BSC readers to understand how each indicator is calculated and make it possible to duplicate indicator calculations.

Detailed Analysis Detailed analysis should be performed on indicators that are either trending in a non-desirable direction or not performing at target. The analysis should include a deep dive into the data including looking at:

• performance over time • identification of operational changes that have or are taking place and may have

contributed to the performance of the indicator • identifying improvements being made to alter performance going forward, and • an overall explanation on why an indicator has had a significant change.

The analysis should be completed in team discussions, with the people who have the operational knowledge of that particular indicator. These people are able to tell the story behind the performance of the indicator. This is known as the story-telling part of the BSC.

Action Plans Following the detailed analysis of performance, the organization may determine the need for formal action plans to improve the performance of that particular indicator and foster accountability within the management team to ensure future performance is in the desired direction. Action plans help to track progress and changes made that contribute to improved performance.

Utilization of Balanced Scorecards The BSC is an evolving document. Indicators will change from time to time to ensure continued alignment with the organization strategic goals and vision. The BSC is best used in management team meetings to engage health care managers in driving better performance and quality (Kaplan & Norton, 2001). The BSC is used as a performance monitoring tool and helps management to identify opportunities for

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improvement. The BSC is very effective and serves as evidence to facilitate changes at the operational level. The frequency of BSC discussions should be based on the organizational needs. It is not necessary to review all indicators on the BSC in detail at all meetings but it is important to focus on those that stand out. This includes both outstanding performance indicators and a potential opportunity to celebrate some successes or conversely, less than stellar performance and an opportunity to look at improvement. Ultimately, the BSC will lead to greater accountability for strategy implementation at the operational level. BSCs will help healthcare managers to become more efficient and more effective in dealing with performance or quality issues in a timely manner.

Evaluation of Balanced Scorecards In general, it takes two to three years for a BSC implementation to reach maturity (Young et al., 2008). In evaluating whether the BSC is effective as a strategy implementation tool; its strengths and weaknesses should be identified as well as the sharing of experiences. The above can provide valuable insights and identify opportunities for improvement. The evaluation of BSC may become part of the yearly review process. The HIM Professionals Role in Balanced Scorecards HIM Professionals can play multiple roles in the development of a balanced scorecard. A HIM professional can provide the data for an indicator, perform upstream data quality validations, or assist in defining indicator methodology such as inclusion and exclusion criteria. For example, HIM professionals who work in the field of decision support and data analysis would be able to contribute to the development of a balanced scorecard. As a decision support analyst/data analyst, one can develop indicator definitions, perform data extractions, complete baseline data analysis, contribute to target setting, define performance corridors, and facilitate the development of action plans for a specific indicator. According to Woodward, Manuel, & Goel, (2004) a BSC does not focus on a particular aspect of an organization, but on overall performance. A BSC needs to incorporate areas such as quality, human resource, and finance. The development of these indicators would also need to be coordinated with the respective subject matter experts. For HIM professionals who work with information in the areas of quality, human resources, and finance, there would be opportunities for a HIM professional’s role to be evolved. These roles may include but are not limited to, quality improvement specialist focusing on the quality aspect with a knowledge upgrade in LEAN, facilitation techniques, and SMART action plan development; the roles can also be a corporate strategy analyst focusing on strategy development involving human resource and finance. These roles would provide opportunities for HIM professionals to advance in their career path, with a shifting focus into quality improvements, strategy, and performance management.

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References Beckham, J. D. (1997). The accountability crisis in healthcare. The Healthcare Forum

Journal, 40, 34. Bullivant, JRN (1994). Benchmarking for continuous improvement in the public sector.

Longman. United Kingdom. Business for Social Responsibility. (2014). Stakeholder mapping. Retrieved from: https://www.bsr.org/reports/BSR_Stakeholder_Engagement_Stakeholder_Mapping.final.pdf

Groene, O. (2011). Patient centredness and quality improvement efforts in hospitals: rationale, measurement, implementation. International journal for quality in health care : Journal of the International Society for Quality in Health Care, 23(5), 531 - 537

Groene, O.J., & Jorgensen, S.J. (2005). Health promotion in hospitals—a strategy to improve quality in health care. European Journal of Public Health, 15(1), 6-8. doi:10.1093/eurpub/cki100

Hansel, J., & Seaman, N. (2012). Building a powerful hospital scorecard…by keeping it simple. Retrieved from: http://www.hfma.org/brg/pdf/MedeAnalytics_Building%20a%20Hospital%20Scorecard_White%

20Paper.pdf

Hendee, W. (2008). Safety and accountability in healthcare from past to present. International Journal of Radiation Oncology, Biology, Physics, 71, 157-161. doi:10.1016/j.ijrobp.2007.04.096

International Journal of Evidence-Based Healthcare, 8(2), 79 - 89. doi:10.1111/j.1744-1609.2010.00166.x

Isenberg, S.F. (2004). Benchmarking. Ear, Nose & Throat Journal, 83(1), 25 Kaplan, R.S., & Norton, D.P. (2001). Transforming the balanced scorecard from

performance measurement to strategy. Accounting Horizons, 15(2), 87-104 Medves, J., Godfrey, C., Turner, C., Paterson, M., Harrison, M., MacKenzie, L., & Durando,

P. (2010). Systematic review of practice guideline dissemination and implementation strategies for healthcare teams and team-based practice.

Ministry of Health and Long-Term Care. (2011). Excellent Care for All Act Updates. Retrieved from: http://www.health.gov.on.ca/en/pro/programs/ecfa/legislation/performancecomp/update.aspx

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Nunes, R., Brandao, C., & Rego, G. (2011). Public Accountability and Sunshine Healthcare Regulation. Health Care Analysis, 19, 352–364. doi 10.1007/s10728-010-0156-6

Nurunnabi, M., & Islam, S. K. (2012). Accountability in the Bangladeshi privatized healthcare sector. International Journal of Health Care Quality Assurance, 25, 625-644. doi 10.1108/09526861211261226

Oyetunde, M. O., & Brown, V. B. (2012). Professional Accountability: Implications for Primary Healthcare Nursing Practice. JONA’S Healthcare Law, Ethics, and Regulation, 14, 109–114. doi: 10.1097/JHL.0b013e318276308f

Tonchia, S. & Quagini, L. (2010) Performance measurement: linking balanced scorecard to business intelligence. Heidelberg: Springer-Verlag

Woodward, G., Manuel, D., & Goel, V. (2004). Developing a Balanced Scorecard for Public Health. Institute for Clinical Evaluative Sciences (ICES). Retrieved from:http://www.ices.on.ca/~/media/Files/Atlases-Reports/2004/Developing-a-balanced-

scorecard-for-public-health/Full%20report.ashx

Young, J., Bell, R., Khalfan, A., & Lindquist, E. (2008). Evaluating the balanced scorecard at the university health network: An impact assessment. Healthcare Quarterly (Toronto, Ontario), 11(2), 52-56.

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Appendix I – BSC examples Toronto East General Hospital – BSC example

http://www.tegh.on.ca/bins/doc.aspx?id=13122

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The Scarborough Hospital – BSC example http://www.tsh.to/wp-content/uploads/2013/12/TSH-Balanced-Scorecard.pdf

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University Health Network – BSC example

http://www.uhn.ca/corporate/AboutUHN/AchievingOurVision/Documents/BSC_2014-15_Q3_Report.pdf

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University Health Network - BSC example continued

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Yee Hong Centre for Geriatric Care – BSC example http://www.yeehong.com/centre/pdf/2014Q2Apr-

JunCorporateBalancedScorecard.pdf

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Yee Hung Centre – BSC example continued

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Special Thanks to Authors and Reviewers Authors:

Xiyuan (Siuwin) Wang, MHSc, CHE, CHIM Tammy Dickins, CHIM

Reviewers: Maria Muia, MHSc, BHA, CHE, CHIM Lindsay Wyers, H.BSc, MHS(c) Lori Sealy, CHIM Spencer Huson, CHIM

Editor: Paula Weisflock, BHA (HIM), MAEd, CHIM

For more information: To learn more about this or any other Professional Practice Brief (PPB), including how to earn continuing professional education (CPE) credits from their use, please contact the Canadian Health Information Management Association (CHIMA) at: Email: chima.education@echima.ca Tel: 519-438-6700 Toll Free: 1-877-332-4462 Fax: 519-438-7001 Website: www.echima.ca The publication of professional practice briefs (PPB) is a lengthy process due to the time it takes for authors to complete their research and write a draft of the brief. Subject matter expert reviewers are then called upon to review the PPB and provide feedback to the authors to consider incorporating into their work. Information within the PPB is deemed current at the time of writing; new information is always coming available and readers should take this into account. The content within this PPB reflects the opinions of the professionals who developed it. Scientific validation through research is not a part of the process. The links within this publication were current and valid as of the date of creation; however, webpage addresses and the information on them may change at any time. Copyright (c) 2015 by the Canadian Health Information Management Association. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of the Canadian Health Information Management Association.