Performance Measurement Systems for Healthcare Organisations

Performance Measurement Systems for Healthcare Organisations

Raúl Rodríguez Rodríguez (Universitat Politècnica de València, Spain), Sara Trespalacios Figueroa (Independent Researcher, Spain), Juan-Jose Alfaro-Saiz (Universitat Politècnica de València, Spain) and María-José Verdecho (Universitat Politècnica de València, Spain)
Copyright: © 2020 |Pages: 16
DOI: 10.4018/978-1-7998-4543-0.ch014
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Abstract

This chapter deals with the performance measurement systems (PMS) for healthcare organisations topic. PMS have been proved to be a widely used management tool to control, monitor, and manage performance and, extensively, organisations. However, most of the developed works have focused on industrial organisations, being the application of this topic to health organisations not fully exploited. This chapter brings, based on scientific literature, some sound reviews that could be the starting point for researching activities in this topic. Then, it shows an overview of performance measurement elements applied to healthcare organisations from different optics such as efficacy, quality, adequateness, use of ICT and sustainability at both intra- and inter-organisational contexts.
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Introduction

Performance measurement systems (PMS) have been widely treated and studied within the scientific literature in the last decades, especially in the industry context. PMS are management systems that help decision-makers to better control, monitor and manage their organizations. Then, a PMS is a homogeneous group of both financial and non-financial measures able to successfully cope with the complexity inherent to any organization. It is a tool derived from strategy and able to impulse and foster performance measurement from the strategic until the operational level. The development of a new PMS should be seen as a strategic investment and it should then be carefully designed, as it is any other strategic action in an organization. In the last years, many PMS frameworks have appeared, trying to establish, with a higher or lower degree of success, effective PMS to better manage organizations. From a general point of view, performance measures should:

  • Be derived from strategy.

  • Be developed for different activities and business processes.

  • Be dynamic, adaptive to changes and, therefore, useful in the long-term.

  • Be realistic and logical.

These PMS came up to be initially applied to the industrial organizations, and it is in this context where more frameworks have been developed and applied.

However, in the last years, PMS are being also adopted by service organizations and, extensively, by healthcare organizations, which seeks for a high level in terms of efficiency, efficacy, and productivity with the constraint of being a pretty complex system, with many important stakeholders such as community, government, and patients who interact among themselves and require to meet certain criteria in order to achieve the stipulated goals.

In order to measure the efficacy of any organization, it is necessary to understand both the exogenous or environmental factors as well as the endogenous or internal ones. Only then it will be possible to define and propose changes in order to reach the desired performance levels. In the healthcare organization context, it is possible to affirm that the main efforts have been in developing and applying performance measurement elements regarding the internal level.

Currently, healthcare organizations have demonstrated to have a good experience in defining key performance indicators (KPIs) and make decisions relying on the values of such KPIs. Performance measurement through the usage of KPIs is an important step in the process of assessing performance in any organization (Vitale & Mavrinac, 1995). Additionally, it is of key importance to relate these KPIs to the organization’s strategy in order to evidence both the advances and improvements achieves and is, therefore, able to make better decisions. In the healthcare organization's context, there are many KPIs and large amounts of data gathered in many years of maintaining these KPIs. However, they usually lack having strategic objectives linked to these KPIs and derived from strategy. In other words, the traditional industry-based approach of firstly defining strategic objectives coming from stating strategic lines after having taken into account the organizational philosophic elements (mission, vision, values) and secondly defining KPIs associated with these strategic objectives is not followed in healthcare organizations. Alike this traditional and rational approach, healthcare organizations manage and make decisions based on only KPIs and, if defined, strategic objectives that are usually started after taking into account the KPIs. In other words, the classic top-down definition process is here substituted by a bottom-up one. This may lead to a dysfunctional process and to a loss of efficiency regarding the results of the PMS, which should be properly addressed and treated in future research works.

To sum up, there is a crescent interest in measuring the performance of healthcare organizations, as they need great investments and their results are usually controlled following some standard KPIs instead of applying a solid and robust PMS. Whereas in the industry context there are a lot of performance measurement frameworks and application of these, at the healthcare organization level there is, comparatively, very few ones and these are usually a simplification of the user in the industry. Therefore, this chapter aims to offer readers an overview of this important managerial issue.

Key Terms in this Chapter

Performance: Indicates to what extent an organization is doing it well.

Performance Measurement System: Conjoint of performance elements that together, when properly defined, is one of the most powerful tools for supporting decision-making processes at all business levels.

Strategy: It is an abstract process that requires people from all over the organization in order to foresee and define what the best path is in order to achieve the organization’s goals and assure its market position.

BSC: Simple tool that somehow has standardized how to measure (and manage) organizational performance.

Supply Chain Performance Measurement: Difficult and many times conflictive process where organizations members have to negotiate the supply chain strategic objectives with other members.

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