QUERI – Quality Enhancement Research Initiative

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Quality Improvement Methods

4. Balanced Scorecard

a. Definition. The Balanced Scorecard is an approach to manage and measure an organization's activities particularly in terms of its vision and strategic goals. Success is viewed in financial and non financial terms. The approach specifies what dimensions must be included to get a balanced approach. Measurement along these lines is an important element. The idea is applicable to all industries but in healthcare the following four dimensions are generally viewed as the fundamental elements.

  • Patient perspective. Such as infection rates or patient wait times
  • Financial. Such as total margin, receivables
  • Internal processes. Such as sick time, staff performance reviews
  • Learning and innovation. Such as

A particularly critical aspect of this method is to select the correct measures because it is often easy to hide important problems by using ambiguous or misleading measurements.

b. Literature.

  • Kaplan, Robert S., and David P. Norton. The balanced scorecard: translating strategy into action. Harvard Business Press, 1996. This and other books and articles by Robert Kaplan developed and have popularized the Balanced Scorecard idea.
  • Zelman, William N., George H. Pink, and Catherine B. Matthias. "Use of the balanced scorecard in health care." Journal of health care finance 29.4 (2003): 1-16.
  • Biro, Lawrence A., Michael E. Moreland, and David E. Cowgill. "Achieving excellence in veterans healthcare—A balanced scorecard approach." Journal for Healthcare Quality 25.3 (2003): 33-39. Subsequently VHA was criticized for the use of missing measurement of performance.

c. Example.

A healthcare organization wishes to improve how it monitors its performance even though it currently uses various benchmarking reports. It feels that it is important to assure that the organization's vision is reflected in measuring performance. The balanced scorecard provides a way to measure a broader set of performance measures than they had been using. By identifying all the dimensions of performance they cared about the organization created more effective tool to communicate its objectives to its staff.

d. Steps.

1. Create a plan including who is to be responsible, a timeline, and objectives

2. Identify the objectives or vision based on discussion and agreement with the various parts of the organization

3. Determine the metrics relevant to each dimension and sources for data

4. Implement and communicate the scorecard on a regular basis

5. Verify that the desired impact has occurred