Are your executives and managers experiencing data overload? A balanced scorecard system may be the answer. The massive amount of data hospitals and large healthcare systems collect continues to mound higher and higher. Many executives have a positive attitude about this—the more data, the more informed their decisions will be, right? Not exactly. 

Truth is, it’s challenging for executives to decide what to measure, make sense of all the data, and, most importantly, take action based on it. The best place to start? Determine which metrics will really drive performance improvement across the organization.

Failure to prioritize these key metrics can lead to a state of “analysis paralysis,” in which the complexity of data management and manual reporting undermines any progress toward organizational performance goals.

This is especially true in larger health systems given the multiple audiences and disparate information systems. The result is a complex infrastructure of reporting systems, disconnected data repositories, and limited distribution of information beyond the executive suite. 

It’s common for hospital executives, managers, and clinical decisionmakers to rely heavily on IT staff to manually aggregate data and program complex queries on an ad hoc basis. In most cases, results are delivered in spreadsheets and static month-end reports. Simply put, many hospitals have a difficult time getting meaningful and relevant information to business and clinical decisionmakers in an actionable format. A balanced scorecard approach is the best solution to this problem.

Start small

A common pitfall for business intelligence implementations is attempting to deliver all things to all people at once. Rather than trying to develop the perfect balanced scorecard prior to implementation, start with three to five meaningful metrics and fully integrate them into the process and feedback loop of your hospital. 

Another way to manage scale is to start with one region, facility, or department and use the knowledge gained in the process when building your enterprise scorecard. With an iterative process, you can set your organization up for long-term success by building positive momentum and better understanding the significance of key performance metrics.

Leverage industry best practices

There is no need to re-invent the wheel when selecting best-practice metrics. Government agencies like CMS, clinical quality initiatives like AHRQ, industry associations like AHA, and hospitals like UPMC have all published metrics that provide a baseline for how hospitals should measure performance. 

Figure 1 shows a list of common hospital performance metrics based on industry research and the direct experiences of numerous healthcare executives that participated on an advisory panel for this article. This list was formulated with a cross-discipline perspective from CEOs, CFOs, CMOs, CNOs, and CIOs with experience at both small hospitals and large systems.

Use flexible, interactive analytics 

An effective business intelligence (BI) platform should present actionable information in alignment with the organization structure of the hospital. Each decisionmaker should be presented with a personalized view of the metrics most relevant to his/her role, as well as an enterprise perspective to clearly show how these granular metrics fit into the overall company strategy. 

Enterprise scorecards should provide a high-level snap shot of the entire enterprise and visually highlight performance trends relative to organizational goals and targets. Scorecards typically keep the executive team focused on a common plan by providing transparency into a few critical metrics. These metrics typically represent a balanced mix of clinical, financial, and operational metrics that convey the overall health of the hospital system. 

The most effective scorecards use a visual color coding system (red/yellow/green) to provide quick insight into problem areas. Interactive, Web-based scorecards allow users to drill down into underlying dashboards and reports to further understand the magnitude and root causes of performance.

Role-based dashboards should monitor daily performance by displaying detailed graphs and charts for specific areas of hospital operations. Dashboards fall one level down from scorecards in the business decisionmaking process and focus more on monitoring operational results. 

Typically, the dashboard is tied to operational and departmental goals and is less strategic than a scorecard. 

The data reflected in dashboards is usually more timely (daily) in nature and includes more granular metrics. Role-based dashboards are critical to making a BI application actionable across a complex health system. The software should recognize which metrics are relevant to each operational user and visually prompt them to take action on the metrics that impact their piece of the business.

Dynamic, multi-dimensional analysis should display data in flexible tables that users can pivot and filter to answer ad hoc questions and determine root causes. Dynamic analysis is different from a static or canned report; it allows the user to interrogate the data, change dimensions, and modify the hierarchy of data. If a user sees a trend or potential outliers he/she can quickly view the data in multiple ways to better understand the root causes. 

Alerts, targets, and reminders should proactively push relevant information to decisionmakers. Scorecards, dashboards, and dynamic reports should be able to alert everyone on progress (or lack thereof) to targets, whether or not they are looking at the data. Proactive alerts and reminders can be set to automatically push updates via e-mail based on business rules and thresholds set by the decision-makers. 

For example, when a specific financial metric such as unbilled Medicare receivables goes beyond a specific target value (for example, $500,000), the revenue cycle director responsible for this metric would receive an e-mail notification. An effective performance management application will have hundreds of these alerts set on key metrics to help ensure that nothing slips through the cracks. 

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