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The Balanced Scorecard Solution at Peel Memorial Hospital
Case Analysis
Thomas N. Bailey
2/15/2011
Kaplan UniversityGB520
Term 1101DUnit 4
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1 Introduction
Prior to the 1990s, generous government funding allowed Canadian health care
facilities to provide excellent service and quality. In the early 1990s, increasing health
care costs have changed government funding, requiring providers to be more financially
accountable. In the mid-1990s, hospitals and regional health authorities across Canada
were under siege from funding restraints, mergers and forced closures. At the same
time, the healthcare industry was focused on delivering high-quality patient care and
aligning the key stakeholders to the newly created vision. To evolve and to survive,
Peel Memorial Hospital (PMH) implemented the Balanced Scorecard performance
management system and that is the focus of this case study. Also highlighted are the
value of and the benefits to be gained when best practices from the corporate sector are
successfully adapted to the health care environment.
2 History and Issues
Peel Memorial Hospital (PMH) in Brampton Ontario lacked measurable targets and
tired Mission Statement that tried to be all things to all people (Harber, 1998). Internal
surveys revealed that employees were unclear on the organization’s strategic direction
and the linkage of various programs and initiatives undertaken.
In 1994, PMH embarked on a comprehensive Continuous Quality Improvement
(CQI) training program for all staff which was followed by a burst of departmental and
interdepartmental improvement initiatives. The hospital management looked closely at
whether time, money and energy were being focused on the key clinical and business
processes. Meanwhile, the hospital employees wanted to know how the evolving
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program management structure relates to PMH’s move into a patient focused care
model; how these organizational development initiatives tie in with PMH’s move to
shared governance models for nursing and the professional discipline; and where the fit
for CQI and new computer system were.
Working with Xerox Quality Services, PMH identified the “balanced scorecard”
solution as a good fit for PMH and an effective vehicle to further evolve the organization.
In 1995, PMH adopted the balanced scorecard system to measure its performance.
3 Performance Management System Analysis
The use of balanced scorecard in hospitals as part of their performance
management and strategic management system has increased substantially. These
scorecards incorporated the concern of the hospitals’ stakeholders, focused on the
hospitals’ processes, and included both financial and non-financial indicators for
performance measurement.
The balanced scorecard at PMH included six categories of business with 23 data
elements that were the drivers of the performance results. At the center of the
Integrated Management Model framework was the Patient and Community Focus. The
other five categories of business were Management Leadership, Human Resource
Management, Patient Care Process Management, Quality Tools and Information
Utilization, and Performance Results, and their interrelationship was identified in the
framework (Harber, 1998).
“The first year of implementation included objectives that identified the need for
corporate measurement tools such as patient and staff/team satisfaction” (Harber, 1998,
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p. 60). During year two of implementation, the Integrated Management Model was
streamlined to reduce the data elements. By now, PMH had become more adept at
managing and understanding the causal relationship between performance indicators
and performance results. It had a good idea of which performance results help to drive
performance results in other areas.
Although the development of the balanced scorecard was a major undertaking and
the development of performance measures a challenge, the implementation of balanced
scorecard at Peel Memorial Hospital was a success as the satisfaction level from
patient rose from 89 percent to 95 percent and the staff satisfaction survey participation
rose from 33 percent to 75 percent. Also, PMH achieved a better understanding of
where to invest time and money in learning objectives and the ability to relate mission
and vision statements to performance. It also enables PMH to become the lowest-cost
provider in its peer group. The balanced scorecard provided PMH the ability to translate
the hospital’s strategic objectives into a coherent set of performance measures as well
as to align the seemingly disparate elements with organizational objectives.
4 Conclusion
Mello (2011) says that performance management systems can significantly impact
organizational performance and process. The achievement of organizational goals
requires a sensible balance between managerial commitment to the strategic interests
of a business and to the human interests of its everyday operation at every level. The
successful in health care management will depend on organizations and top executives
balancing quality and customer satisfaction with adequate financing and long-range
goals. The balanced scorecard not only provides a framework for establishing
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performance measurement goals but also incorporates continued quality improvement
throughout the organization. Today, more and more Canadian hospitals have adopted
balanced scorecard as their strategic management system.
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References
Mellow, J. A. (2011). Strategic Human Resource Management. Mason, OH:
South-Western Cengage Learning. Chapter 10, p. 438-454.
Harber, B. W. (1998). The Balanced Scorecard Solution at Peel Memorial
Hospital. Hospital Quarterly, p. 59-63.
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