Mgr Sabina Ostrowska[1]
Mission- Oriented
Scorecard as a tool for effective management in a public organisation presented
on the example of a public hospital
Keywords: public management, healthcare
management, MSC (Mission-Oriented Scorecard)
Summary
The main assumption to my deliberations is a statement that organizations operating in a public sector and applying performance measurement are more capable of creating higher social values by exploiting political, physical, or institutional resources then organizations, which do not implement such activities. In this article role of effectiveness concept in contemporary management in health care was analyzed and specific discriminants of public management were point out. Additionally Mission-Oriented Scorecard was briefly characterized as a concept having considerable value for both functioning and development for organization operating in the public health care sector.
Introduction
The effective functioning
and the development of each and every organisation, regardless of its character
and scope of operation should be based on the realisation of a well defined
strategy. The strategy is to a certain extent a compromise between the actual
market situation and the mission of the company.
Until recently the
strategic planning encompassed only financial aims, which seemed to be the most
quantifiable factors that determine the financial position of a company. Aims
that come from the following regions are currently being also considered:
customer service, organizational structure effectiveness, the reaction velocity
to the changing needs of the market, the learning ability and knowledge
management. Such multi-layer strategic management is characteristic of MSC,
Missing Oriented Scorecard)/MOS, which has been the effect of the research on
the mastering of multi-metres applied in the process of economical
effectiveness research.
The aforementioned factors
seem to be completely foreign for most Polish health care centres. Despite the
fact that health care centre employees undertake steps aiming at changing this
state of affairs, nevertheless this process takes time and gradual heightening
of the level of economic knowledge in a given health care centre.
The aim of this elaboration is the analysis of
possibilities and possible benefits that stem from the fact of implementation
of Missing Oriented Scorecard/MOS into the system of public health care system
management, which despite their individual characteristics are similar in form
and organization status to other small and average sized companies. This is the
main reason for management (operational and strategic) related innovations, as
well as finance related innovations that are transferred from the Small and
Average sized Companies.
1. Missing Oriented Scorecard
within a public organization
A
large interest in the scope of implementation of a version of Balance
Scorecard/BSC [Kaplan i Norton 1992, s. 71-79] presented as the effectiveness
measurement tool within public organizations by Kaplan under the name of
Mission Oriented Scorecard/MOS [Kaplan 2006, s. 10].
Drawing 1 Hospital MSC
Model
|
Perspective of
the stakeholders |
||
|
The Beneficiaries How will we be
perceived by the beneficiaries (patients) in order to fulfill our mission? |
Founder Jak należy
wyglądać w oczach How should we be perceived by our founders
(payers, founding body, owner) in order to fulfill our mission? |
· Goals · Meters · Target values · Initiatives |
|
Perspective of
the processes |
|
|
Which process needs
to be improved in order to satisfy the stakeholders and to fulfill our
mission? |
· Goals · Meters · Target values · Initiatives |
|
Perspective of
development |
|
|
How should they
maintain the development in order to improve the critical processes?. |
· Goals · Meters · Target values ·
|
|
Financial
perspective |
|
|
What should the
financial results be to satisfy the founding body / owner and to have the
capability of mission's fulfillment |
· Goals · Meters · Target values · Initiatives |
Source: own compilation based on Kaplan, Norton (2001)
The MSC concept is based on three assumptions. Above all the financial
factors are not the sufficient basis for non profit organization assessment,
which constitute the mission of the public applicability organizations. Second
of all non-material assets constitute the most important element in case of
public organization.
The
excellent medical equipment is not sufficient itself without the specialist
knowledge; without IT technology, the
proper work climate, proper information access in the proper form and in a timely
manner, it is impossible to achieve proper organization development. Moreover,
there exists a necessity for connection of the long term strategic planning and
operational activities. In other words, all organizations have to strive for
the elimination of the space between vision and reality.
The main aim of the process of creation of non-profit organisations is
to fulfil the public applicability aims and to provide benefits for the whole
or for the certain population groups within the given area. Therefore the main
aim of these organizations is the realisation of needs of particular groups of
individuals, [Fitzroy,
Hubert 2005] contrary to the commercial companies, where
achievement of the best possible financial result is the main aim.
In case of a public health care
organisation the division into two individual groups is an important factor:
benefactors and donces. Payers (most often the National Health Care Fund,
economic entities that purchase medical services for their employees) are to be
qualified into the benefactor category, and the donces, which include patients,
medical service recipients which influence their functioning (establishing
entities or owners).
Each of the four perspective is equally important. The attainment of the
balance between the perspective aims is the indispensable condition in the process of achievement of a stabile
organization development. This means that if in one perspective it is decided
to resign from the realisation of the given aim in order to achieve an aim
listed in the other perspective, the organisation enters the phase of lack of
balance ex. laying off 50% of staff would have a very beneficial influence on
the financial condition of the given organization (assuming that there is not
over employment), but the above action shall have a distinctly negative effect
on the donces’ interest, through the lowering of the customer service level.
The MOS model, proves that the
process of cost reduction may not be the only strategic aim of the public
health care unit (nevertheless, cost optimization is required). From the public
organization point of view the creation of a larger donce value from each
expenditure is the greater interest. Nevertheless, MOS allows for the process
of elimination of all of the costs that stem from projects, investments and
programmes, which do not supplement the strategy and do not allow for the
fulfilment of the organization mission. What is important from the perspective
of a health care centre is the
retaining of the quality of the rendered medical services as well as the
retaining of good financial condition. The above stems from the fact that the
process of public applicability mission fulfilment is not possible without
meeting of the criteria for financial effectiveness. Any cases of inconsiderable
financial cuts shall cause panic among patients, they influence the frustration
among the centre personnel and make it impossible for the realisation of the
organization mission – promotion of the healthy society.
The national health protection system surroundings undergo rapid changes
and is characterized by lack of stability of system solutions. The attempts at
the reforming of the sector, which were meant to introduce the improvement of
the hospital situation turned out to be futile. The atmosphere of constant
dispute, the growing patient pressure at the improvement of the health care
services and on the other hand the necessity for financial stabilization, puts
hospital and other health care centre managers in front of the following dilemma:
should the broadly understood service quality and patient treatment levels be
put in front of the financial result, or vice versa.
The
experiences of health care organisations in OECD countries show that the
aforementioned dilemma may be eliminated. The proper realisation of the public
applicability mission requires stabile financial situation, nevertheless this
may not happen with all of the costs beared by the patient nor via the lowering
of the quality of the rendered medical services. The tool that has turned out
to be especially helpful was MOS. The carefully constructed strategy (amongst
others: the application of the scope of benefits and patient requirements), the
efficiently implemented strategy with application of MOS enables the management
staff of the health management centres, reduction or even elimination of the
aforementioned dilemma. The basic difference between the commercial companies
and non profit organisations is connected to financial issues. In case of
commercial organisations the financial issue is the most important one when in
case of non profit organisations the public applicability mission is the most
important one. In case of non profit
health care organisations, financial reasons do not mirror the sense of
existence of the given organisation but they do not constitute the measure of
success. This is connected not to the present and future only but to the pas as
well. Excellent financial results do not prove the fact that the activities
initiated by the hospital have led to the achieving of success. Despite being
helpful the process of controlling or
the process of budgeting do not constitute a complex quality management system
of a health centre organisational unit, as the y do not define nor provide the
measurement of the most important things. MSC is one of the management systems,
which in a system-like way defines and measures the degree of success of the
non profit organisation.
As the non profit organisation the
public health care centres are oriented at the realization of the public
applicability mission. They have been created and they function in order to
ensure the complex and proper medical keeping and protection. It is frequent
that in case of missions of the health care centres it is the patient, health (ex.
in case of mission of the Krosno Hospital[2]). In order to achieve what is the most important, which is to achieve
its mission, the public health care centres have to apply their limited centres
in a more effective way. The specified mission specifies the sense of existence
and defines the frames of the organisation’s activity. The method which is to
be applied in the process of realization of the above defines and provides a
detailed strategic plan.
- Mission
Methodology- Oriented Scorecard in a public hospital
MOS presents the
strategy, therefore the method, which is applied by the health centre unit to
fulfil its mission in the form of the so-called strategy maps (Kaplan, Norton, 2000).
The strategy map presents the strategic aims placed within the 4 perspectives:
key benefactors, processes, development and finance, which have been connected
with application of the cause and reason relations (arrows).
In
order to realize these aims two areas are quite important. First, all
organization processes within a public organisation in the given hospital are
performed by the employees, therefore the level of qualifications of the
employed personnel becomes an extremely important factor. Moreover one should
take special care in the process of choosing candidates for the management
positions making sure that they posses the required management skills and
should ensure that support of the information systems, which will be helpful in
making organisation processes more efficient, should be given. The above fact
is connected to the increase of assets devoted to the purchase of ex. medical
equipment, the implementation of the ISO system, heightening of employees;
qualifications (the IT introductory process), therefore the extremely important
factor is the hospital’s financial situation, or engaging of the establishment
institution (Voivodship Marshall etc.). Due to the above fact the public
organisation manager should place special attention on both the increase of
income and cost optimization. Therefore the strategy map is an actualized,
logic and unite strategy description. Within each of the four MOS perspectives,
not only the strategic aims are formed but also expressed aim realization
measurement methods in short and long distance and the strategic initiatives
that are indispensable in the process of aim realization.
Drawing 2
X Hospital strategy Map.
Perspective of
the stakeholders
--------------------------------------------------------------------------------------------------------------------------------------Process
perspective
--------------------------------------------------------------------------------------------------------------------------------------
Development
perspective
--------------------------------------------------------------------------------------------------------------------------------------
Financial
perspective
Source: based on
Kaplan, Norton
Picture
no. 3 presents the sample aims, values and initiatives that have been put
together for Hospital X. The above factors have been taken from the MOS model
and in the opinion of hospital management they were key issues in the process
of hospital operation.
Picture 3 Aims,
measurement devices and initiates within the MOS model
|
STRATEGIC TOPIC Give the patients
and their families the best care and ensure the high quality of services
rendered by an effective organization |
|
||||||||||||||||||||
|
Patient |
|
|
|||||||||||||||||||
Processes |
|
Goal
What do we intend to achieve? |
Meter E.g. - bed coverage - hospitalization length
How to measure
desired Project
results’ execution?
level |
Initiative E.g. - optimization of the length of stay
Strategic bugdet projects |
|||||||||||||||||
|
Development |
|
||||||||||||||||||||
Finances |
|
||||||||||||||||||||
Source:
elaborated on the basis of Hospital X strategy.
A part of the Hospital X strategy
plan that has been presented on picture 3, presents the full version of reason
and action connections between the strategic aims. In this case the chain is as
following:
·
Good financial situation enables for
the possibility for investing in IT systems that provide support for the
organisation management process.
·
If a public health care centre
organisation shall possess already existing IT systems:
ü
The organization effectiveness shall
be subject to increase (the fact which may influence the lowering of the
treatment costs through the application of methods applied in the
pharma-economics, the comparison analysis of various cases, shortening of the
time spent in hospital)
ü
Mastering of the health care centre
level (the swift therapeutic decision making process, gathering of the history
illness data and the speed of access to the gathered data).
·
If the hospital shall ensure high
quality health care coverage, patient satisfaction level shall rise and the
organisation’s effectiveness shall also be on the increase.
The following year, the process of creation of measurement devices for
particular strategic aims which are to be realised for particular initiatives
shall also become indispensable, they also shall determine the timetable for
particular initiatives and should connect them to the budget that has been
designed to this aim.
Non profit organisations are created in order to fulfil the public
applicability aims and to realise the goals for a certain part of population in
the specific area. Therefore the basic aim of this organisation is the
realisation of the specific groups’ needs, contrary to the commercial company
situation - achieving the highest
possible financial result.
Summary
In case of the banking, car and
electronic sectors constant process improvement leads to the reduction of unit
costs at the same time witnessing the increase of products and services. The
innovation methods are promptly assimilated in the given sector which is to the
benefit of the clients.
In case of the medical service
market the situation is slightly different. Costs are high and they are on the
dynamic increase. The increase of costs may only partially be connected to the
quality improvement processes. The properly applied MOS strategy brings
optimistic results. In case of hospitals and other health care centres it
allows for decreasing of costs at the same time improving the quality and
service availability.
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