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IJPPM 57,1

Lives in the balance: an analysis of the balanced scorecard (BSC) in healthcare organizations
Bruce Gurd
International Graduate School of Business, University of South Australia, Adelaide, Australia, and

Received August 2006 Revised May 2007 Accepted May 2007

Tian Gao
Jinan Central Hospital, Jinan, China and University of South Australia, Adelaide, Australia
Purpose – The purpose of this paper is to show how the balanced scorecard (BSC) has been a prominent innovation in strategic performance measurement systems. The health care sector has started to adopt this approach. Design/methodology/approach – There are many case studies of BSC applications and this paper reviews this literature to analyse the application of the BSC across this sector. In particular, it is argued that the current applications do not tend to show the health of patients as being central in the development of the BSC; the balance is tilted towards the financial not the health outcomes. BSCs are still in an evolutionary stage in health care settings and strategy mapping is not yet common. Findings – The paper has drawn together and analysed the published cases of BSC in health care. It is possible that some excellent examples of BSC in health care are not yet published or have been missed by this research approach. This analysis was limited by using information from papers which sometimes were very limited. A future research project could investigate the characteristics of unsuccessful implementations – ineffective and short-lived. It is suggested that a more comprehensive view would come from a cross-national survey of best practice use of the BSC in health care; an interesting project for future research. Originality/value – In reviewing the past applications, the paper shows a way forward for future developments of the scorecard in health settings. Keywords Balanced scorecard, Health services Paper type Conceptual paper

International Journal of Productivity and Performance Management Vol. 57 No. 1, 2008 pp. 6-21 q Emerald Group Publishing Limited 1741-0401 DOI 10.1108/17410400810841209

Introduction In healthcare, the balanced scorecard is the current “meal for today”, with consultants advocating this “miraculous treatment” (Aidemark, 2001, p. 23). The healthcare industry has a long tradition of extensive and detailed performance measurement ´ d to focus on increased competitive pressures; but these are (Pieper, 2005). It seem cliche very apparent in health care in many countries – ageing populations increasing demand, improved treatments which are wanted by more people, shortage of skilled health care workers, and governments seeking to reduce their financial involvement. In this context, performance measurement is seen as having a key role: “When dramatic changes are inevitable, developing a strategic focus and examining the business and

Stewart and Bestor. p. 2003).. Radnor and Lovell. Pieper (2005. as the BSC appears to have gone into a growth phase (Zelman et al. Less common are surveys about applying BSC in health care. study the BSC has been adopted by a broad range of health care organisations. when the first refereed article was published on the BSC in health care settings. internal business process and learning and growth. Oliveira. The selection of measures should demonstrate the creativity . Our first question is: What are the perspectives used? The earliest BSC papers (Kaplan and Norton. especially those in the not-for-profit sector. Identifying features of successful implementations is therefore important.’s (2003). 2000. Chow et al. The choice of perspectives remains one of the most important decisions in BSC design – how many perspectives will there be and what will they be? It was anticipated that the focus of these scorecards. Technology has enabled hospital leadership to collect and distribute vast amounts of data. This is followed by a short methodology section and then the findings. 2002). 9) notes: Hospitals have been using metrics for a long time. 2002. In heath care. longer than most other organizations. 2003.quality of the health care in a measurable and repeatable manner becomes each organisation’s opportunity” (Meliones et al. 1998. 28). Although the BSC has been applied successfully many times as a strategic management tool. Pink et al. numerous articles have appeared in the health services and management literature. much of the literature relates to how to apply BSC successfully (for example. Neely and Bourne (2000) claim a failure rate of 70 percent.. including hospital systems. p. The discussion section precedes the final conclusion. and national health care organisations. The second question is: Which specific performance measures are used within the scorecard? Most health organizations have a range of measures already in place. Fitzpatrick.. . Since 1994. hospitals. The Healthcare organizations have had to meet some unique challenges in adapting the BSC to their environment. The next section uses the research literature to develop three research questions. Chan and Ho (2000) conducted a survey of the BSC in Canadian hospitals in 2000 and Inamdar and Kaplan (2002) surveyed executives in nine provider organizations in the USA. Lives in the balance 7 The BSC is supposed to assist in identifying the most critical measures for monitoring and developing strategy. Shutt. In the development of the literature Kaplan and Norton (2001) developed a perspective labelled “Mission” for not-for-profit organisations. Tarantino. would have been on patient health – on the change to the lives of the people who these healthcare institutions are trying to help. 2003a. Prior literature We have explored these cases using three research questions. Subsequent developments brought about the inclusion of other perspectives such as sustainability (Brignall. There is insufficient information about the overall pattern and success of BSC implementation in health care. According to Zelman et al. 2001. customer. 1992) advocated the use of the four perspectives – financial. 2001. The paper is arranged as follows. 2003. This paper integrates all of the case studies to seek for common patterns and contrasts. benchmarking processes that allow healthcare organizations to measure their performance against industry averages have been in place since the late 1970s. . b). However. 2001. psychiatric centres. there is also evidence of many failures.

144) admit that “this gap is disappointing since one of the most important goals for adopting the scorecard measurement and management framework is to promote the growth of individual and organisational capabilities”. Nevertheless. 2002. In particular. According to Lawrie and Cobbold (2004). professional presentations and conference papers. In contrast there is a view in the literature (Morisawa. This remains a desirable approach. (2003) concluded that over 30 percent of the BSC users in their study had no learning and growth perspective. Kaplan and Norton (1996.’s (2003) view appears to be dominant in the literature. presumably. It became a strategic management tool. usually utilising a strategy map to illustrate the linkage between measures and strategies. 2001) reflected the third-generation application of the BSC. A third view (e. 2002) is that the concept of the strategy-focused organization (Kaplan and Norton. not. we were interested in the learning and growth perspective which Marr and Adams (2004) argue is the BSC’s weakest link. Lawrie and Cobbold. Miyake. internal business process and learning and growth). 2002. Speckbacher et al.1 8 in seeking measures which support strategic direction. 2002) that the key contribution of second-generation BSC was the formal linkage of strategic management with performance management. As a first step. as implementations viewed as unsuccessful are not likely to be written up. 2004). 2002. As Speckbacher et al. it has been accepted here. 2001. 2003). Research method The ideal research method to answer these questions would be to conduct in-depth analysis of multiple BSC cases by collecting primary data. Speckbacher et al. Morisawa. The first step was to identify as many published papers as possible.g. “measurement systems without cause-and-effect logic may also qualify as Balanced Scorecards” (Malmi. (2003) suggested that the third generation BSC was the second generation but adding action plans/targets and linked to incentives. The initial search was conducted in early 2005 and extended to cover all papers until the end of 2005. Miyake. customer. Miyake. p. this paper uses secondary data and analyses the published research in the area by identifying as many BSC cases in the health sector. Frigo and Krumwiede (1999) reported that the majority of BSC users rate the effectiveness of the innovation perspective as “less than adequate to poor”. There is a clear bias with this method. At this stage. (2003) and Lawrie and Cobbold (2004) argue that the second generation BSC emphasised the cause-and-effect relationships between measures and strategic objectives. 216). They used “activity” and “outcome” perspectives to instead of the traditional four perspectives (Lawrie and Cobbold. The third question is: Which generation of scorecards are used? At least three different definitions of the stages of the evolution of BSC exist in the literature (Morisawa. Google and Google Scholar were used to non-refereed papers. p. the third generation BSC is about developing strategic control systems by incorporating destination statements and optionally two perspective strategic linkage models. this secondary data is an invaluable resource to compare and contrast approaches to the BSC in the sector. In addition. Speckbacher et al. although very research intensive. Speckbacher et al. but the very difficulty of finding measures. All authors agree that the first generation BSC combines financial and non-financial indicators with the four perspectives (financial. or at least conduct surveys in several countries.IJPPM 57. two academic data bases were used . through any lack of knowledge of this perspective. 2004. 2002..

health outcomes for patients.. 1996). There are three examples without a financial perspective in the scorecard. three from the UK and Sweden respectively. We found a wide number of measures – from 13 to 44. In a not-for-profit and public sector setting it would show that the organization achieves its results in an efficient manner that minimizes cost (Olve et al. 2000). We found two groups of measures in this perspective – revenue growth indicators and productivity indicators (see Table IV). This research focuses on the case studies of implementations with some use of the two surveys. no matter how they were modified in practice. and financial resources as synonyms for the financial perspective[1]. 2000. This seems to be a problem with these scorecards. Most used the financial and internal business process perspectives. but rather they changed it to meet their specific strategies. 2000). theoretical papers arguing for the virtues of the BSC and exploring issues in its use. The upper bounds of these numbers seem to be well above the recommended levels in the literature (Kaplan and Norton. two had three perspectives and one had eight perspectives. and one each from Canada and Taiwan. Inamdar and Kaplan. three had five. Only three cases used the traditional BSC with the standard four perspectives. Lives in the balance 9 . how many indicators should be involved in a BSC top level is a difficult problem faced in every organization applying the BSC. The 22 case studies were all not-for-profit organizations. A total of 50 percent used a learning and growth (or innovation and learning) perspective. and beyond the ability of managers to focus on them. 15 had four perspectives. which is relatively low but consistent with problems of implementing this perspective (Hoque and James. cost. but they had measures at a corporate level or outside of the scorecard. Chan and Ho (2000) found that in Canada the financial and customer perspectives were weighted equally. Findings We found 22 case studies in the literature: ten were from the USA. For not-for-profits they recommend that it can place their customers or constituents – not the financials – at the top of its BSC. only 77 percent had a customer or patient perspective.– Ebsco Host and Science Direct. Three types of papers were found – case studies of implementations. and the two survey papers previously mentioned (Chan and Ho. We have treated terms such as economy. Selection of performance measures In practice. The perspectives used in the cases are shown in Table II. two from Australia and New Zealand. Perspectives Kaplan and Norton (2001) have argued that organizations should develop the best set of dimensions that reflect their strategy. A summary of the cases is found in Table I. Some of the major variations in perspectives are shown in Table III. The financial perspective in a for-profit setting would show the results of the organization’s strategy from the other perspectives. In the 22 cases. Kaplan and Norton’s approach appears to be the template for implementations in health care. 2002). Within their BSC. are not the central focus. in these cases. One case did not use perspectives but instead had 12 non-financial measures and one financial measure.

) 2005 1998 II 27 Quality and financial performance Financial and customer 15 Stewart and Bestor (2000) Royal Brisbane & Women’s Hospital Service District (2005) Pieper (2005) Wolfersteig and Dunham (1998) (continued ) Mayo Clinic. care and service Unclear Patients. USA Royal Brisbane and Women’s Hospital. (2002) VA web site (1900) Mohan (2004) Gumbus et al. General information about 22 examples of BSC in health care organizations Strategic or Stage performance Approximate of management BSC tool date Number of perspectives Top perspective Number of indicators Source 1999 II Strategy 4 22 37 18 Innovation and growth. (2000) Balanced Scorecard Collaborative Inc. USA Bridgeport Hospital. (2000) Hermann et al. USA . USA Royal Ottawa Hospital.10 IJPPM 57. (2002) Royal Ottawa Hospital (n. clients and staff. USA Duke Children’s Hospital. USA Cambridge Health Alliance. USA Hudson River Psychiatric Center. International Falls.1 Type of organization Organization 2000 2000 2002 II Strategy 5 Financial I Performance 4 Unclear II Strategy 8 Unclear 13 44 25 Hospital system Hospital 2004 2002 2005 2000 2005 II Strategy II Strategy 4 II Strategy II Strategy 5 5 II Strategy 4 Psychiatric Centre Table I. process Strategy II Strategy 4 4 32 13 26 Customer and financial Quality and safety.d. AU Silver Cross Hospital. Canada Community Memorial Hospital(CMH). USA St Mary’s/Duluth Clinic Health System. USA Falls Memorial Hospital. staff and clinicians Unclear Curtwright et al.

Jo Sweden Bradford PCT. (2004) Hospitals Monitoring Directorate (2000) Healthcare Commission (2004) 26 2002 3 4 4 4 a Ia II II II I a Performancea Strategy Strategy Strategy Performance Unclear User and process/productivity Mental Health Trusts and Providers of Mental Health Services. UK South Canterbury District Health Board. government AU Long-term planning at ¨ nko ¨ ping County Council. Healthcare Commission. NZ 4 Client and internal process Client and internal process Unclear 16 Radnor and Lovell (2003a) Radnor and Lovell (2003b) South Canterbury District Health Board (2003) Note: a Insufficient information to be definitive Lives in the balance 11 Table I. UK Local Nursing of Queensland Health. NZ Huang et al. Sweden Emergency department in a hospital. UK 2001 2003 2003 2003 14 30 29 Queensland Health (2002) Aidemark (2001) Bradford HIMP. Taiwan Hospital Monitoring Directorate.Type of organization Organization 2004 Strategy Strategy Strategy Strategy Performancea 4 3 Unclear Unclear Performancea 4 Unclear 9 16 35 4 Unclear 16 4 Financial 11 4 Unclear 21 2001 2001 2004 2004 2004 Ia Ia II II II II a Strategic or Stage performance Approximate of management BSC tool date Number of perspectives Top perspective Number of indicators Source Kollberg and Elg (2004) Kershaw and Kershaw (2001) Aidemark (2001) Hospital department National health-care system A department of Swedish Hospital A hospice unit’s of St Elsewhere Hospital. USA One clinic of Hogland Hospital. .

61). 2004) which we have followed: Human capital. The learning and growth perspective enables the organization to ensure its capacity for the long-term run. The customer perspective describes “the ways in which differentiated. It describes the organization’s intangible assets and their role in strategy. information capital and organization capital. and organizes intangible assets into three categories (Kaplan and Norton. These examples show some important factors. Number of cases Financial (and synonyms) Customer (and synonyms) Internal business process (and synonyms) Learning and growth or innovation and learning (and synonyms) Other perspectives 19 17 20 11 14 Percentage 86 77 91 50 64 Table II. and patient satisfaction. The measure of market share with targeted customers would balance a pure financial signal (sales) to indicate whether an intended strategy is yielding expected results (Kaplan and Norton. Market share. 2004). especially for targeted customer segments. an organization can accomplish two vital components of its strategy: producing and delivering the value proposition for customers and improving processes and reducing costs for the productivity component in the financial perspective (Kaplan and Norton. 1998). dollars raised from community. All three forms of capital are found in the case studies as shown in Table VII. patient acquisition. 2000. Staff measures were sometimes listed under this perspective because of their critical importance to patient satisfaction (see Table V). payer mix (percentage commercial). Perspectives . such as patient retention.. how customer demand for this value is to be satisfied. Those indicators of operations may in fact be measures of patient satisfaction as well as drivers of customer satisfaction. and research grants. The indicators which relate to image and reputation are important for the operation of healthcare organizations. which are a form of reducing human capital. linking the BSC to strategy.. reveals how well a health facility is penetrating a desired market. incidents also appear in this perspective. This is a difference between the BSC and a traditional performance system which focuses on the processes of delivering services to present customers (Kaplan and Norton. 1996). p. 1996). These are seen in Table VI. market share. such as competitive position. and why the customer will be willing to pay for it” (Olve et al. sustainable value is to be created for targeted customer segments. In relation to internal business processes. Hospital food was identified as an important indicator of influencing patient satisfaction by the UK Healthcare Commission (Mental Health Trusts and Providers of Mental Health Services) and some hospitals directors in USA (Chow et al.1 12 It is noticeable that some indicators relate to long-term dimensions in this perspective. These BSCs incorporate innovation processes into to the internal business perspective.IJPPM 57. Workplace injuries.

Queensland Health. USA Hospital Monitoring Directorate. education and teaching Staff and clinicians Quality Patients and Community Business and development Volume and market share growth Quality improvement Process improvement Organizational health Innovation and growth Research Care and service Systems integration Organization healthcare and learning Process and efficiency Patient and quality Patient/client indicators Staff indicators Organization indicators Clinical productivity and efficiency Mutual respect and diversity Social commitment External environmental assessment Patient characteristics Quality and patient satisfaction Process and efficiency Organizational health Satisfaction Clinical Access/continuity Cost/utilization Operational People Technical Clinical focus Patient focus Capacity and capability Patient. USA South Canterbury District Health Board. Modified balanced scorecard perspectives used . International Falls. USA Mental Health Trusts and Providers of Mental Health Services. NZ Cambridge Health Alliance Behavioral Health Services. USA Modified perspectives Research. clients and staff Learning/innovation Customer/patient Process/productivity Economy User perspective Quality Operational effectiveness Workplace excellence Client perspective (government and user) Cost perspective Lives in the balance Bridgeport Hospital. Long-term planning at Jo Sweden Silver Cross Hospital. AU A department of a Swedish Hospital Clinic of Hogland Hospital. USA Bradford PCT and Bradford HIMP. USA Falls Memorial Hospital.Example Duke Children’s Hospital Balanced Scorecard. NZ Nursing Balanced Scorecard. UK Table III. AU Mayo Clinic. UK Royal Brisbane & Women’s Hospital. USA St Mary’s/Duluth Clinic Health System. Sweden ¨ nko ¨ ping County Council. USA 13 Royal Ottawa Hospital.

favourable press coverage featuring doctors/staff. etc. discharge timeliness. current ratio. operating margin. volume growth by key service line. etc. etc. public opinion) Staff satisfaction: staff satisfaction (employee satisfaction. unplanned readmissions. Measures used in the financial perspective Customer perspective Patient retention Patient acquisition Patient satisfaction Indicators For example: patient retention. market share. operations within budget (overtime. length of stay. physician satisfaction.IJPPM 57. percent patient would recommend. supply expense and pharmacy expense. number of contracts renewed. unit expenditures). market share. increase in contracts. number of best practice initiatives Payers’ satisfaction: for example. community satisfaction. Health Maintenance Organizations’ satisfaction (number of contracts). amount/sources of funds raised. referrals and use. number of out-patient visits. accurate diagnosis rate. 14 Productivity indicators Table IV. general drug prescribing. hospital food. cost per discharge). access. Table V. research grants. unit profitability (cost per case.1 Revenue growth indicators Indicators Growth in net revenues. funds raised for facility improvements. stakeholder satisfaction with services (quality of services. increased donations. etc. number of contracts received. personnel cost. patient waiting time. accurate test rate. dollars generated from new contracts. Measures in the customer perspective Generation of scorecards We found (Table I) that more than 70 percent of the examples emphasise cause-and-effect relationships or the links between strategy and its elements (using BSC as a strategic management tool). number of referrals. etc. advertising budget per bed. We cannot be certain that they are using full strategy maps.g. This suggests that most examples were second or third generation BSC. We did anticipate that not-for-profit and government hospitals might place their patients at the top of their scorecards. hospital-acquired infections. etc. turnover rate) Image and reputation: reputation. reduced cash outlays. dollars raised from community (number and dollars of corporate gifts. complaints. incidents. e. payer mix (percent commercial).). For half of the examples where we could recognize hierarchical relationships among the perspectives. Patient satisfaction and interrelated factors: patient satisfaction was adopted by 19 of the 22. cardiology cases per month. increased community support. percentage of contracts relative to competition. amortization and expense expressed as a percentage of net revenue. patient census. absentee rate. depreciation. Patient referral rate reflects patient satisfaction Factors that influence patient satisfaction:. operating room supply expense per surgical case. For example: number of new contracts per period. total assets by net revenue. there was no customer (or . level of fund-raising activity for the hospital. competitive position. retention rate. Profit.

. computer networks and training. etc. Discussion Perspectives So in relation to our first question. perfect orders (reduce errors). culture of improvement. tuition reimbursement dollars spent per year. serious incidents. performance improved activities). Information capital Continuous innovation Organization capital Table VII. By contrast. including training times. board leader/skills and knowledge Strategic database (availability. cost per product. daily staffing vs occupancy. etc. etc. case cancellations. strategic alliances. most of them modified the four perspectives according to their institution’s current conditions and different understanding. work design. hours per unit of activity. per case cost. employee survey rating. percentage of occupied beds. billing and collections/posting time.Internal business perspective Indicators Patient satisfaction Length of stay. publications. cost. cost per diagnosis. Measures of learning and growth patient) perspective that was on the top level in the BSC on its own. Number and quality of new services offered in past five years. For example. resource utilisation ratio. readmission rate. mortality index. % emergency patients triaged within 15 minutes of arrival. claim processing accuracy. number of patient falls. use). Risk management. leadership survey. medication errors per dose. coding error rate (clinic and hospital). key infrastructure targets. resource utilization ($ value of outputs/net operating costs). weekly patient complaints. one institution had the perspectives as client. number of physicians using online hospital clinical information systems. staff turnover. waiting time. Cost per patient day. etc. enhance employee motivation and empowerment (decision-making participation. staff retention. leader approval rate. absenteeism. Measures of internal business processes Learning and growth perspective Human capital Indicators Staff development. two of the eleven examples put the financial perspective on the top of their BSCs. percentage of clinical staff who receive change management training. we found that few of the scorecards were typical BSCs with the traditional four perspectives. continuing education credits per FTE. occupational injuries. communication. performance against contract ($ value of outputs/$ value of contract). new research projects. etc Lives in the balance 15 Safety and health Productivity Innovation Table VI. staff training. number of institutions/agencies participating in joint activities. sickness rate. Staff satisfaction levels. etc. infection rate. discharge. for example. Product innovation. employee turnover rate. mortality index. etc. call centre response time. restraint usage.

as the role of professionals is important to the role of hospitals. p. 2003).. and internal process perspective. Another different perspective is “Community”. In particular. government policy makers..1 learning and growth. most health cases used other perspectives in their BSCs whereas a survey in German-speaking countries found that only 17 percent of the companies used other perspectives (Speckbacher et al. 2004). Our findings are consistent with Voelker et al. the autonomous culture of physicians and the importance of long-term outcomes are aspects of health care that have few analogies in other industries (Zelman et al. For example. Usually those with the lowest health needs are the most dissatisfied and have the highest expectations. care and service. and seeking to solve their concerns could result in new inequities and gaps in health outcomes (Woodward et al. it’s more important to capture all the critical success factors. For these reasons. they have to achieve a balance between community and patient. beliefs. another one had financial. Its adaptability is part of its attraction. As a result.. 2004). 2001. 2004). The use of the learning and growth perspective was similar. innovation and growth. 1996).. of or who benefits from a service because they target the entire community (Woodward et al.. and health . consisting of citizens. 2004). in some examples. high-risk groups. However. 2003). One different perspective is “People”. this appears insufficient. experts claimed that the emphasis for public health should be changed from “client or patient satisfaction” to “community engagement” (Woodward et al. but there was less use of the customer perspective. 2004). So BSC in healthcare organizations presents a different picture to other industries in relation to the range of perspectives. In health care the focus may be on the patient as customer. the “community”. (2001). health care providers. “People” or “Staff” became an independent perspective. At the same time. Woodward et al. as well as the attitudes of nursing and other professionals. it is difficult to define the clients who are in need.. In healthcare. and the four perspectives were never considered as a “strait-jacket” (Kaplan and Norton. To cover these in the card is more important than what you call them... all efforts to achieve balanced accountability for cost. systems integration. 2003). “Consumers” of public health services sometimes have difficulty in judging services because their preventive and long-term nature may not reflect the entire population at risk (Blendon et al. quality and care are critically dependent on physician attitudes. 2001). and behaviours (Atchison and Bujak. 2001). Some services such as quarantine are mandated and must be provided regardless of the view of the public (Woodward et al. Edenius and Hasselbladh (2002. 259) cite the view of an implementer. the BSC scorecard appears more diverse than in other sectors. the health care system has to strive for an equitable distribution of services based on health needs. 16 The BSC is a conceptual tool (Sasse. 2005).IJPPM 57.. In health care. and research. For example. We concur that when human resources are so critical to strategy implementation they should be another perspective. in many public health programs. So. some systems rated by experts as high quality can be much more poorly rated by consumers (Blendon et al. and serving their needs for achieving the mission (Niven. a project manager: I don’t think it is important what we call the different perspectives.

Through these samples. Hence the appearance of “Community” as an independent perspective in health care organization’s BSC is not surprising. reporting the indicators. we found diverse forms of the BSC. The problem of the number of indicators includes the costs or resources tied up in the measurement process. It is possible that stage 2 is sufficient for strategic implementation in healthcare. However. had they at least advanced to developing cause-and-effect relationships? Emphasizing cause-and-effect is a watershed between the first and second generation BSC. It is possible that some excellent examples of BSC in health care are not yet published or have been missed by our research approach. For example. we return to the focus of healthcare services – patients. An improvement in efficiency is a limited perspective in the healthcare industry because in practice they have to balance efficiency and fairness. One measure can be related to multiple goals. 50). for collecting and analysing the data. In FY 2001. for a total of 20-25 indicators to be tracked closely. and consumer choice (Inamdar and Kaplan. and interpreting them so as to decipher signals from noise. Table I demonstrates that all BSCs in the healthcare field appear to be at stage 1 or 2. Although all the examples included patients in some parts. and balance between cost. the five critical success factors were created and their metrics will be reduced to 35 this year. The paper has drawn together and analysed the published cases of BSC in health care. p. there was not a single example where the patient or customer perspective was at the top of the BSC. It also can be partially explained by waiting time.. Lives in the balance 17 Generation of scorecards Our third question related to the generation of BSC used. In particular. Some of the measures occurred in different perspectives. Why not? Conclusion The reflections on the present level of practise of the BSC are useful for both academics and practitioners. This is a significant difference between healthcare and other industries. Performance measures Kaplan and Norton (1996) suggested a BSC should not exceed four or five indicators for each perspective. 2002). Finally.department staff. patient satisfaction as an overall indicator can be used in the customer perspective or the internal process perspective. 2002. access. A future research project could investigate the characteristics of unsuccessful implementations – ineffective and short-lived. Our analysis was limited by using information from papers which sometimes were very limited. This may be because implementations are relatively new. or weekly patient complaints. We suggest that a more comprehensive view would come . quality. The experience of Bridgeport BSC perhaps reflects a general picture about the indicator problem: Initially the card focused 12 critical success factors that were created by 56 metrics in FY 2000. These examples demonstrate considerable flexibility in applying the BSC. Further enhancements for FY 2002 include reducing the number of critical success factors from five to four by combining Quality and Process Improvement” (Gumbus et al. call centre response time.

References Aidemark. We encourage health care organisations to work in groups of like organisations to produce scorecards which are both comparable but meet their own strategic needs. and efficiency and fairness.IJPPM 57. there may be more evolution to continue. We do not underestimate the importance of the other perspectives but we argue that. (2001). Leading Transformational Change: The Physician-Executive Partnership. In health care practices. In the process of applying BSC. financial and non-financial. they are likely to be developed based on a single (and original) set of macro principles developed by Kaplan and Norton. Kaplan and Norton’s four perspectives still has important impact on the practices in healthcare organizations. 17 No. whatever the number of generations ahead. pp. Atchison. If the BSC is to be a strategic implementation tool. J.G. IL. as Kaplan and Norton (2001) have argued. T. We return to our central contention of the lives of healthcare recipients. particularly in the healthcare industry. We can foresee that the future BSC will not have fixed form other than balance. internal and external factors. the second generation BSC of a strategic management tool appears to be the mainstream. Financial Accountability & Management.S. 1. . organizations seek for balance and harmony between long-term and short-term. However. 23-40. individual and organizational. patient needs must be more central to the BSC. Note 1. This is an encouraging sign for the sector which has taken up the basic tool of the BSC and applied it in rich and diverse ways. cause-and effects. in an example. For example. Few organizations are treating Kaplan and Norton or other formulas as a strait jacket. Although this research has limitations. Chicago. (2001). but in the early application of the BSC there has been some rich experimentation which might lead to more consistent approaches in the longer term. The lack of consistency does not enable benchmarking. Health Administration Press. a business and development perspective contained only financial measures. Lives are difficult to balance and most countries are struggling to contain health costs. “The meaning of balanced scorecards in the health care organizations”. Vol.1 18 from a cross-national survey of best practice use of the BSC in healthcare. and Bujak. an interesting project for future research. The examples show the diversity of BSCs in health care organizations. especially for not-for-profit and government providers. our findings provide some important insights into the current state of the use of BSC in healthcare. While academics and practitioners claim we are in the third generation. the business and development perspective is also classified as financial perspective. L. then there will always be some differences due to the different strategic orientations of health care organisations. Outside of the health sector there has been a gradual evolution of the BSC. A core principle of BSC remains balance. Our concern is that the needs of patients have not reached the centre of the BSC in healthcare. Although the Lawrie and Cobbold two perspectives’ BSC approach has been introduced and applied.

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(1998). Shutt. L.H. pp. (accessed 24 May 2005). Vol. J. pp. 29 No.P. September. (2004). . California Management Review.S. 4. (2005). pp. G.d. “Creating the strategy-focused organization”.edu/facstaff/ scorcecard-Duke1. Vol. Wolfersteig. Corresponding author Bruce Gurd can be contacted at: bruce. Tarantino. Journal of Health Care Finance.arizona. C.A. 29 No. pp.).E. J. “A literature review on the balanced scorecard’s impact on performance”. “Performance improvement: a multidimensional model”. 41 No.scdhb.. Developing a Balanced Scorecard for Public Health. +available at: www. pp.A. available at: www. “Use of the balanced scorecard in health care”.R. G.). March/April.pdf (accessed 19 April 2005). id ¼ 1&org_id ¼ 19 (accessed 28 April 2005). 69-72. Stewart. pp. and French. Vol. pp. W. Toronto. Journal of Corporate Accounting & Finance. Managed Care. Chesley. Vol. South Canterbury District Health Board Annual Report 2003. 14 No.ppt (accessed 4 May 2005).on.B.). Sasse. W. “Balancing the health care scorecard”. M.cfm?site. Voelker. and Matthias. “Applying a balanced scorecard to health care organizations”. and Goel. 3. International Journal for Quality in Health Care. (2003). available at: www. G.leaderpoint.publichealth. Rakich. Zelman. T. 4. pp. (2001). 42-6. available at: Docs/PowerPoint/KateO’Brien.emeraldinsight. 361-87. Inc (n. Vol. available at: http://azflexprogram. J. 5. and Pfeiffer.d. and Dunham. Manuel.. 10 No. Vol.rohcg. Speckbacher. 1-16. pp25-40. 3.Royal Ottawa Hospital (n. Hospital Topics. Or visit our web site for further details: www. “Using the balanced scorecard to build a strategy-focused healthcare organization”. Pink. Further reading BSC Collaborative. 79 No. (2003). South Canterbury District Health Board (2003). “Transforming an organization: using models to foster a strategic conversation”.E.. “Using the balanced scorecard as a performance management tool”. D. Institute for Clinical Evaluative Sciences (ICES).N. (2000). Woodward. C. D. (2003). LeaderPoint. 75-82.J.uakron. Physician Executive. “The balanced scorecard in healthcare organizations: a performance measurement and strategic planning methodology”.au Lives in the balance 21 To purchase reprints of this article please e-mail: reprints@emeraldinsight.d.pdf (accessed 3 March 2005). (2003). V. 4. J. and Wenger. (n. S. Management Accounting Research. “A descriptive analysis on the implementation of balanced scorecard in German-speaking countries”. (1998). 13-24. and

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