KPI framework and strategic management

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By Knowledge Hub

The transformation that’s needed in healthcare can be overwhelming and necessitate substantial investments in finance, technology, human capital, operations, infrastructure, substantial disinvestment of legacy resources, redesign of workflows and pathways, and enhancement of collaboration across the system. This pivot will entail a transformation of the workforce, physical infrastructure, and technologies that support and drive the care of patients.

It is quite interesting to note that every transformation programme in the world wants to deliver safe, consistently good, financially sustainable health care, but no one has been able to do it completely. One of the issues at the centre of this problem is the lack of a KPI framework based Strategic Management System. 

In 1992, Robert Kaplan and David Norton identified serious deficiency in management systems: inability to link the short-term activities with long term objectives. The concept of Balance Scorecard was introduced with four new management processes that separately, and in combination, contribute to linking long term strategic objectives with short term activities.

In the later years, the scorecard also supplied a KPI framework to review, monitor, approve and guide strategy, thus a focus for many critical management processes: functional and individual goal setting, planning, capital allocations, strategic initiatives, and feedback and learning. To deploy the framework, the leadership must

  1. Provide top-down reflection of vision and strategy and express as integrated set of objectives and measures.
  2. Managers must communicate the strategy up and down their areas of remit and align goals and indiviudal objectives and measures to it
  3. Plan resources and prioritise activities to deliver long term strategic objectives
  4. Create a dynamic and agile organisation learning from all stakeholders and breakdown in processes
  5. Modify strategy to reflect real-time learning

The Provider KPIs

The objectives and KPIs vary from organisation to organisation and as stated above driven by organisational strategy. To assess the quality and performance of a healthcare provider, some of the frequently used KPIs which can be fed into the scorecard are shown below. It is absolutely vital, the agreed goals and objects are measurable. As Peter Drucker frequently said, “You Can’t Measure It, You Can’t Improve It”

Patients: Wait time, staff to patient ratio, percentage of cancelled appointments, admission rate, occupancy rate, average length of stay, number of beds, discharge process time, equipment utilisation rate, number of new patients, number of insured patients, response time for patient transport service, average minutes per surgery, operating room turnaround time, medication errors, patient care hours, patient vs. staff ratio, post procedural death rate, patient follow up, hospital acquired conditions, unexpected return to surgery, average lab test time, Emergency: arrival to bed, nurse, physician and discharge, code response time, patients left without being seen

Internal business processes: Patient satisfaction, complaints, inpatient satisfaction with physician, outpatient satisfaction with physician, percentage of patients that found paperwork to be “clearly written & straightforward”, percentage of medical documents translated, employee turnover, referrals, patient confidentiality, obesity outreach campaigns, number of fact sheets developed, website hits, number of press releases released, media mentions, assets downtime

Financial perspective: Claims denial rate, third party revenue, medicine cost, equipment maintenance costs, indirect expenses, percentage of patients without insurance, staff overtime, vacancy rates, energy usage, assets utilisations, return on assets and capital employed, operating leverage, financial leverage, accounts receivable days, accounts payable days, earnings before interest, tax, depreciation and amortisation, percentage split among insured (corporate and others), self pay (local and foreign), government (local and foreign), cost margins specially staff and supplies, price growths (different customer segments)

Learning and Growth: number of staff participated in internal training, trainings per department, number of employees that find internal training useful, number of educational programs, amount of education resources.

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