Application of Balanced Scorecard in

Public Health Care Systems

GROUP 2:
20P001 - A S PRANAV
20P014 - BRISHANK KASHYAP
20P023 - JAIDEEP CHAUHAN
20P032 - MARUT SHUKLA
20P060 - SRIDIP SAMANTA
Introduction to the Concept
Definition: The Balanced Scorecard (BSC) approach is a strategic planning and management system that is used extensively in business and industry,
government, and non-profit organisations worldwide to align business activities to the vision and strategy of the organisation, improve internal and
external communications, and monitor organisation performance against strategic goals.

Objective: BSC is mainly focused on two major problems of modern business organisations: the effective performance measurement and the
evaluation of successful implementation of organisation’s strategy.

Four Perspectives:

1. Financial - the tangible outcomes of the strategy using traditional financial terms, like economic value added, revenue growth, costs, profit margins,
cash flow, net operating income, etc.

2. Customer - the value proposition that a business organisation adopts in order to satisfy its customers

3. Internal Business - the internal business processes that create and deliver the customer value proposition

4. Learning & Growth - the intangible assets of an organisation which refer to internal skills and capabilities that are necessary to support the
value-creating internal processes

The Gartner Group estimates that at least 50% of all Fortune 1000 companies are using the BSC methodology
BSC in Private vs Public sector
In the case of public or non-profit organisations,
a BSC model should consider the particular
characteristics of this sector, giving emphasis on
mission and passion, while private sector tends
to focus on profit and competition

Worldwide, public and non-profit organisations

play an important role as service providers. The
social orientation of these organisations is the
basic difference between profit and non-profit.
Perspectives of Balanced Scorecard
FINANCIAL
Cost of Services & Liquidity
● Net Profit Margin
● Operating revenues to assets ratio
● Current ratio
Debts and Operating Expenses
● Debt Ratio
● Inventory Turnover
● Operating expenses to Operating
revenues Ratio
Internal Business
Employee satisfaction
● Employee Satisfaction Index
a. Medical
b. Nursing & Others
● Employee Absenteeism Index
● Employee Retention Index
Effectiveness in Resource Utilisation
● Surplus Inventory
● Bed Occupancy Ratio
Perspectives of Balanced Scorecard
CUSTOMER LEARNING & GROWTH

Quality of Provided Services Third Party Collaboration

● Patient Satisfaction Index ● No of Projects with other organizations
● Number of complaints
● Average waiting time Technological Growth

Area Demand for Medical Services ● Percentage of budget used for purchase
of new technology
● Hospital beds per 1000 people
● Resource allocation to information
● Percentage of cases transferred
technology/capital
Reliability of Services
Human Resource Development
● Percentage of Readmissions
● Percentage of employees trained
Effectiveness of Services ● Percentage of medical staff participating
● Average duration of hospitalisation in conferences
Methodology
Aim- How BSC is implemented in organisations The unit of analysis can be identified as a “hierarchical branch” expecting
to strive towards one vision in the organisation under study.
Case Selection Parameters- The use of the BSC is studied with respect to the management levels in
each “branch” organisation, which can be viewed as the embedded cases
(1) Design of the BSC includes financial and
within the case
non-financial measures derived from a vision and
strategy and can be categorised into perspectives
originating from the framework by Kaplan and
Norton (1992)

(2) According to people familiar with the health

care context, the BSC was used in the
organisations . People who are familiar with the
health-care context are questioned about
organisations that had implemented the BSC

(3) The organisation’s various teams, sectors etc

should be studied in order to remove variations
and uncertainties in results
Data Collection Data Analysis
Interviews and documents are major sources for data collection.
The units are categorised in each interview
into the themes and sub-themes.
The interview guide include themes like- Interviewee’s professional
Design elements can be Visions, strategic
background; the design of the scorecard; the implementation of the
goals, critical success factors, goals,
scorecard; and the practical use of the scorecard. measures, targets, and action plans .
The interviewees are free to describe the BSC with respect to the themes
Following factors to be analyzed :
during the interview. A model of the BSC used in the organisation to be ● Purpose of the BSC,
used during the interviews. The interviewees to be selected on the basis ● The measures,
of their position in the organisation and whether they had been working ● The implementation process,
in the organisation since the introduction of the BSC. ● Actions taken upon the BSC
information
The documents in the analysis have been the representations of the BSC ● Experienced contribution
used as artefacts in the interviews to focus the discussion and clarify any
obscurities. Other documents used were the annual reports of the
county councils, a measurement document, budget plans, and the
Swedish Quality Award’s assessment report.
 Purpose of BSC Uses of BSC
● To improve communication within the Uses by Managers-
organizational hierarchy
● Reporting of results to superiors, and to
● To enable organizational improvement and follow-up yearly results by managers
development ● Utilizing the result reports for yearly planning
● Discussing the improvement efforts by
● To create a clear structure for the strategic employees
direction of the organization, whether new or ● Disseminating information within the
existing organization in a smooth manner

● To consider the values of the employees and Uses by Employees-

their working situation
● In discussions between professionals and in
● To create a structure of management meetings teams
● To receive information and knowledge about the
● To enable follow-up and reporting of results organization
Critical Factors for Implementation Contributions of BSC

● High involvement of employees, mainly during ● Improved order-lines and structure in

the early stages of implementation managerial work

● Relations with different levels in the organization ● Wider view of what it means to lead an
and with actors outside the organization organization

● Involvement of change agents to support ● Increased employee participation in

employees in using the BSC development activities

● Adaptation of terminology in the BSC by ● Increased understanding of the work among

employees employees

● Prior experience from quality management ● Increased coordination between different units
in the organization
● Infrastructure to provide people with reliable
and fast data ● Increased interest in employees’ working
situations
Public Sector Scorecard
Issues with balanced scorecard:
● More focused on performance
measurement challenges which are not
the most important challenges in a
government context
● Primary emphasis on financial results

Key differences between BSC

and PSS: Block diagram: PSS

● Addition of a “strategic perspective

The PSS contains 7 perspectives in 3 groups:
● Explicit mention of service users and ● Capabilities: Innovation & learning,
stakeholders leadership, people, partnership & resources
● Processes: Operational excellence
● Differences in methodology, with ● Outcomes: Strategic, financial, service
more emphasis on service user users & stakeholder outcomes
involvement
Practical Implications and Recommendations
● Cascade PSS to individual departments

● Use across organizational boundaries. Eg:

Care pathway for a patient covering services
across primary and secondary care

● Focus on non-financial outcomes such as

improved health, social security, etc

● Emphasising on the importance of openness

and trust within a performance management
culture based on improvement, innovation
and learning

PSS in a developing country’s public healthcare system

Thank you!