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  • Systematic Understanding of Needs Data driven, systematic analysis Essential for: Baseline performance assessment Benchmarking against best practices Understanding of root causes
  • Most of you are all too familiar with the pressures to improve performance in rural hospitals. Many of those pressures have been around for years: High fixed costs and relatively low volumes The challenges of attracting and retaining a qualified workforce There are never enough resources to meet the needs But in recent years, those pressures have increased markedly—especially with the rise of Pay for Performance, or P4P. Terry Add Terry Add Terry Add
  • Organizing Framework Application of an organizing framework customized to rural realities Baldrige principles, CQI, and the IOM goals present attractive conceptual and operational frameworks, but New standards that are relevant, credible, and practical for rural hospitals must be developed based, in part, on the above principles
  • One of the most important things to understand about the Balanced Scorecard is that it has evolved dramatically in the last 12 years. When the concept was introduced in the early 1990s in two articles in the Harvard Business Review, the focus was on measurement and reporting. The problem that Dr. Robert Kaplan and David Norton were trying to address was the fact that most organizations relied almost exclusively on financial measures, and that was falling short in many ways. Kaplan and Norton argued that organizations should look at measures in four main categories—which they called a Balanced Scorecard. While this was a useful step forward, it was really only the beginning of discovering the power to improve performance. By 1996, when Kaplan and Norton wrote their first book (which you can skip, since the second book is so much better), they were starting to realize that much of the power of focusing on non-financial measures came when those measures were carefully tied to the strategy of the organization. By the time the second book came out, Kaplan, Norton and their peers had actually switch the problem they were trying to address—no longer were they trying to help organizations improve measurement and reporting. Now they were trying to help organizations successfully execute strategy. So, in the second book, titled The Strategy Focused Organization, they began to shift away from the importance of measurements, and emphasized the concept of the Strategy Map and the strategic objectives of an organization. The strategy map tool has become such an important part of the Balanced Scorecard methodology that it was the main focus of Kaplan and Norton’s third book, published in 2003, called Strategy Maps. This evolution is significant, because if you think about the Balanced Scorecard as it was in the early and mid-1990s, with a focus on having measures in four important quadrants, then you miss out on much of the power of the methodology as it has evolved and matured.
  • Perspectives are the viewpoints from which we want to look at our strategy from. To insure a balanced view of our strategy we need to look at it from several perspectives. Generally, strategies are viewed from four perspectives. A Financial perspective which asks us the question: “As financial stakeholders, how do we intend to meet the goals and objectives in the hospital’s mission statement?” The Customer perspective which asks us: “As customers of the hospital’s services, what do we want, need, or expect?”. Many times we need to view doctors as well as patients as customers of the hospital’s services as we develop our strategy The Internal Process perspective asks us to look at our strategy from an enabling point of view: “As members of the hospital staff, what do we need to do to meet the needs of the patients and healthcare community?” The Learning and Growth perspective challenges us with: “What type of culture, skills, training and technology are we going to develop to support our processes?”
  • Another factor that is adding to the pressure to improve performance is what has become known as “Consumer-driven Healthcare.” This is fuelled by many factors, one of which is the rapid rise of Health Savings Accounts, which put dollars and control in the power of the people. Instead of being patients in need of care, they are consumers who are shopping for healthcare services. The internet has contributed to people being much more informed about many different aspects of their healthcare needs and information about the care provider options that they have to choose from. Rural hospitals that don’t satisfy the expectations of healthcare consumers are likely to find that those people will choose to go elsewhere. The marketplace for healthcare services has grown increasingly competitive, with large systems growing and expanding their reach, drawing people from rural communities into their systems. And with their considerably greater financial resources, they are able to make investments that increase some of the gaps between rural and urban hospitals. On top of it all, the increasing pace of change adds to the pressure. That change involves everything from new technologies to a whole new business model—one built on value, not volume. Compensation models are changing to pay hospitals on a combination of quality and cost effectiveness. The list could go on. The bottom line, as you are well aware, is that rural hospitals are feeling a lot of pressure to improve performance.
  • Perhaps even more importantly, that study by Metrus showed that organizations using the Balanced Scorecard were dramatically more likely to be successful in a major change effort. Only 55% of the organizations that were not using the BSC were successful in their last major change effort, but 97% of the organizations using the BSC were successful. This doesn’t happen just because an organization has measures in four categories. Instead, this is a reflection of the power of the methodology in creating strategic focus and helping people understand how they contribute to positive change. This is key to successful performance improvement efforts. If we go back to some of the keys to successful performance improvement that we mentioned earlier in this presentation, I think you’ll see that the Balanced Scorecard methodology becomes a very useful foundation for a hospital’s performance improvement efforts.
  • EMS Most CAHs do not operate EMS systems 2/3 of CAHs send RNs on inter-facility transfers 3/4 reported no impact or positive impact after conversion Appreciate initiatives being supported with grant money
  • Systematic Understanding of Needs Data driven, systematic analysis Essential for: Baseline performance assessment Benchmarking against best practices Understanding of root causes
  • Targeting Needs Areas for improvement must be relevant and practical Considering many factors Resource limitations Business strategy and purpose Market and competitive realities Patient safety and risk avoidance Clinical and functional outcomes
  • One of the most important things to understand about the Balanced Scorecard is that it has evolved dramatically in the last 12 years. When the concept was introduced in the early 1990s in two articles in the Harvard Business Review, the focus was on measurement and reporting. The problem that Dr. Robert Kaplan and David Norton were trying to address was the fact that most organizations relied almost exclusively on financial measures, and that was falling short in many ways. Kaplan and Norton argued that organizations should look at measures in four main categories—which they called a Balanced Scorecard. While this was a useful step forward, it was really only the beginning of discovering the power to improve performance. By 1996, when Kaplan and Norton wrote their first book (which you can skip, since the second book is so much better), they were starting to realize that much of the power of focusing on non-financial measures came when those measures were carefully tied to the strategy of the organization. By the time the second book came out, Kaplan, Norton and their peers had actually switch the problem they were trying to address—no longer were they trying to help organizations improve measurement and reporting. Now they were trying to help organizations successfully execute strategy. So, in the second book, titled The Strategy Focused Organization, they began to shift away from the importance of measurements, and emphasized the concept of the Strategy Map and the strategic objectives of an organization. The strategy map tool has become such an important part of the Balanced Scorecard methodology that it was the main focus of Kaplan and Norton’s third book, published in 2003, called Strategy Maps. This evolution is significant, because if you think about the Balanced Scorecard as it was in the early and mid-1990s, with a focus on having measures in four important quadrants, then you miss out on much of the power of the methodology as it has evolved and matured.
  • Students are asked to place indicators where they believe they make the most sense and create causal linkages. Show causal linkages by drawing arrows to the appropriate indicator boxes.
  • Concept Definition “ Even if you’re on the right track, you’ll get run over if you just sit there.” -Will Rogers
  • Concept Definition “ Even if you’re on the right track, you’ll get run over if you just sit there.” -Will Rogers

Transcript

  • 1. Performance Management and HIT Terry Hill, Executive Director Rural Health Resource Center Duluth, Minnesota
  • 2. Technical Assistance & Services Center (TASC)
    • Federally designated resource center
    • Funded by HRSA’s ORHP
    • Supports Flex Program/CAH implementation in 45 states
    • Located in Duluth, Minnesota
  • 3. Current Federal Contracts
    • Technical Assistance & Services Center (TASC)
    • Rural Network TA Center Web Support
    • Small Hospital Improvement Program (SHIP)
    • Delta Rural Hospital Performance Improvement (RHPI)
    • Rural Hospital Education Project
    • Rural HIT Project
  • 4. Dealing with Change
  • 5. CAH HIT Survey
    • Purpose: to assess level of HIT use in CAHs for a national performance measure
    • Collaborative effort of Flex Monitoring Team, TASC, and ORHP
    • Web-based and phone survey
    • March – April 2006
    • Random sample of 400 CAHs
    • 333 CAHs (83.3%) responded
      • 210 by web, 123 by phone
  • 6.
    • Half of CAHs have a formal IT plan
    • 76% of CAH budgets include IT funding
    • 78% have hospital web site
    • All CAHs have some type of internet access
    • In 36% of CAHs, clinicians use PDAs for patient care
    HIT Survey Results: Infrastructure
  • 7. HIT Survey Conclusions
    • Medicare cost-based reimbursement has permitted many CAHs to make initial investments in HIT infrastructure
    • CAHs have high use rates for administrative and financial IT application, but much lower rates for clinical applications
    • CAH HIT use rates are lower than overall rates for hospitals
    • Future efforts need to focus on increasing use of clinical applications and interconnectivity of CAHs and other health care providers
  • 8.
    • The full report is available at:
    • http://www.flexmonitoring.org/documents/BriefingPaper11_HIT.pdf
    Additional Information
  • 9. Supply regulation 1970s 1980s 1990s 2000s Managed behavior modification Consumer-driven health care Price regulation The History of Cost Containment
  • 10. Consumer-Driven Health Care
    • Bringing profound change
    • Driven by:
      • High costs
      • Growing quality and patient safety concerns
      • New demands for transparency
      • More informed/demanding consumer
  • 11. The New Medicare Consumer
  • 12. Internet-based Health
    • 30,000+ health sites
    • Increasing demand for web-based services
    • “ The World is Flat”
    • Health providers slow to respond
  • 13. Consumer-Driven Health Care Initiatives
    • Pay for Performance (P4P)
    • Public Reporting
    • Health Savings Accounts (HSAs)
  • 14. The Journey to Performance Management
      • Quality Assurance
      • Quality Improvement
      • Performance Improvement
      • Performance Management
  • 15. Performance Management Definition “ A set of processes that help organizations optimize their overall performance. It is a framework for organizing, automating and analyzing methodologies metrics, processes and systems that drive business performance… Performance management is seen as the next generation of business intelligence, and helps businesses make efficient use of their financial, human, material and other resources.” - Wikipedia.org
  • 16. Performance Management Definition “ A framework for getting people, processes and resources aligned and moving in the same direction. The ultimate goal is to achieve strategies that benefit the customer and the bottom line and that result in organizational excellence.” - RHRC
  • 17. Performance Management Systems
    • Performance Management Systems have 3 distinct dimensions:
      • Strategies - Make strategy the central organizational agenda
      • Focus and Alignment- Have resources and activities aligned with strategies
      • Organization- Provide the logic and architecture to link all departments and employees behind strategies.
    • Kaplan and Norton
    • Harvard Business School
  • 18. Brief History of the BSC Strategic Management Harvard Business Review Articles
  • 19. Glossary of Terms Perspective Key Question As financial stakeholders, how do we intend to meet the goals & objectives in our hospital mission statement? As customers of our hospital’s services, what do we want, need or expect? As members of the hospital staff, what do we need to do to meet the needs of our various customers? What type of culture, skills, training and technology are we going to improve in order to support our key processes? Learning & Growth Internal Business Processes Customer Financial
  • 20. Understanding the Balanced Scorecard
    • “ A successful Balanced Scorecard program starts with a recognition that it is not a metrics project…
    • IT’S A CHANGE PROCESS”
    • Robert Kaplan
    • Balanced Scorecard Collaborative’s
    • Government Summit. Sept. 2004
  • 21. The Power of the Balanced Scorecard
  • 22.  
  • 23. System for Managing Performance and Change in Rural Hospitals
    • Framework
    • a. Studor Pillars
    • b. Balanced Scorecard
    • 2. Empowering Culture
      • a. Change oriented
    • b. Customer Centered
    • c. Collaborative
    • d. Designed for retention
    • 3. Ongoing Education
    • a. On site
    • b. Online
  • 24. System for Managing Performance and Change 4. Skilled Workforce a. Nurses and technicians b. Medical Staff c. IT expertise 5. Ongoing Process Improvement a. Clinical b. Business c. Operations 6. Leadership Development a. Board b. Executives c. Middle Management d. Physicians
  • 25.
    • 7. Technology
    • a. HIT
    • b. Medical
    • c. Management and Systems
    • 8. Partnerships
    • a. With physicians/clinicians
    • b. With other hospitals and health providers
    • c. With the Community
    • d. With educational institutions
    • Access to Capital
      • For improvements to plant
      • For investment to infrastructure
    • Outside Technical Expertise
    Systems for Sustaining Performance and Change
  • 26. On-Track to Performance Improvement
  • 27. Valley of Despair Choices, Planning, Execution Determines extent of Slide Leadership and Management Determines how long you’re in the valley of despair . Good Choices and management determines level of productivity and satisfaction Little or No HIT Implement EHR Implemented and Supported Preferred Future Possible Future Time Productivity
  • 28. HIT Theme Strategy Map Finance As financial stakeholders , how do we intend to meet the goals and objectives in the hospital’s Mission Statement? Customers & Community Internal Processes Learning & Growth As customers of the hospital’s services, what do we want, need or expect? As members of the hospital staff , what do we need to do to meet the needs of the patients and healthcare community? As an organization , what type of culture, skills, training and technology are we going to develop to support our processes? Increased cost efficiency Increased market share Increased revenue Patient safety outcomes Physician satisfaction outcomes Patient satisfaction outcomes Increased margin to fund mission Community health outcomes Redesign Clinical processes Acquire HIT expertise Ensure a skilled workforce Redesign Business processes Redesign operational processes Establish an empowering work culture Enhance leadership Instill change management Acquire needed HIT systems Provide education
  • 29. “ Even if you’re on the right track, you’ll get run over if you just sit there.”
    • Will Rogers
  • 30. Terry J. Hill, MPA Executive Director, Rural Health Resource Center 600 E. Superior St., Suite 404 Duluth, MN 55802 218-727-9390, ext. 232 [email_address]