A Balanced Scorecard

A Balanced Scorecard

Introduction

With the increasing demand of health care facilities, the industry is experiencing a fall in terms of its strategy and process implementation. Shrinkage in budgets, implementation of governmental regulations, increment in occurrence of life threatening situations, reduction in reimbursement and aging population are some of the factors that implicated tough times on the health care facilities in the United States of America. Next comes the increasing pressure from the insurance companies following suit (Chu, 2009).In order to achieve the ideal benchmark and be a successful health care facility, a modernized strategic plan will have to be adopted. In this century, hospital and nursing facility will have to depend on the high-level quality management system, adequate financial assistance and customer satisfaction (Judith, 2003). The most used and best strategic plan is adopted in the form of a balanced score care.

Discussion

Definition of Balance Score Card

To overcome the issues of quality management and professional development “Balanced Scorecard” was introduced in 1990s. This professional tool was first developed by Dr. Robert Kaplan, a Harvard Professor (Kaplan & Norton, 1993). Consultant David Norton assisted him. It is a management tool and a measurement tool as well. They referred to balance scorecard as measure of process, product market and customer development. After series of experimentations and modifications, the concept was widely adopted across the world (Rigby, 2001). Balance Scorecard or BSC is a framework that is used as a common practice now to solve the issues related to management problems in hospitals at the present moment (Kershaw, 2001). The mission of balance score card is to organize the strategic initiatives of an organization. This approach not only helps to organize the overall strategy of growth but also to measure performance.

Basic Quadrants of Balance Score Card

The main four quadrants of balance score card are (Kaplan & Norton 1992):

Financial Perspective

Customer Perspective

Internal Business Perspective

Innovation and Learning Perspective

Source: http://management-class.co.uk/strategios/mb102/lectur_28.html

According to Kaplan and Norton (1992) a balanced scorecard is just like the dials in an airline cockpit because it gives intricate pattern of information to the immediate managers, reviewers and auditors. The traditional measurement systems are more focused on manual and customized actions. On the other hand, most organizations are now automating their systems to minimize the errors. When properly adopted and implemented, a balance scorecard brings forward vision, mission and strategy but never controls it (Chu, 2009).

A management in a health care facility adopts balance scorecard by focusing on basic elements such as patient-hospital interaction, client- organization partnership, global scale, team improvement and cross-functional integration and accountability of a group rather than an individual. In order to introduce and implement a system based on balance score card, a multi dimensional measure has to be proposed that may support the system and support (Holger et al, 2005).

Source: http://nesug.org/Proceedings/nesug07/ap/ap20.pdf

Importance of a Balanced Score Card in Health Care Systems

The management of a health care system often faces the diverse requirements of regulatory needs, government organizations, insurance agencies, clinicians, nursing staff, and financial quality management system professionals (AHRQ, ...