The Evolution of Balanced Scorecard Reporting at BWH

1. The Evolution of Balanced Scorecard Reporting at BWH Michael Gustafson, MD, MBA Sue Schade, MBA September 20th, 2002

2. Objectives • Describe the Balanced Scorecard framework • Describe BWH approach • Provide high level solution overview • Share lessons learned

3. Center for Clinical Excellence

4. Performance Measurement & Analysis Group • Mission Statement…. • ”become a central decision support resource for leadership, managers, and clinical caregivers by facilitating an understanding of critical information needed to improve the processes and outcomes of care on a daily basis.” • Goals … • Performance Reporting Aligned with Strategic Goals • Internal Consultants for Data & Analytic Questions • Coordination of Data Analyses across Depts • Healthcare Data Management Expertise • Data & Analysis “Quality Assurance”

5. What is the Balanced Scorecard? • A performance measurement & management framework to define, align and communicate strategy effectiveness at all levels of an organization • Developed by Kaplan & Norton at HBS in 1992 (“The BSC - Measures that Drive Performance”; HBR) • Using only financial or tangible asset measures to judge performance is not enough….need to consider other factors such as quality, customer satisfaction, employee development, innovation, etc. • Mirrors thought process behind “The Service-Profit Chain” • 10 year results reviewed by Kaplan & Norton in 2001 (“The Strategy Focused Organization: How BSC Companies Thrive in the New Business Environment”; HBR)

6. Strategy Map - Balanced Perspectives • Strategy maps incorporate major institutional goals from 4 different, “balanced” perspectives: • Financial = Financial Health • Customer/Outside = Patients & Community • Internal/Business Processes = Quality & Efficiency of Care • Knowledge & Growth = Employee Development & Clinical Innovation

7. Evolution of BSC at BWH: • Concept explored January 2000 • Leadership buy-in, agreement to explore June 2000 • Software RFP August 2000 • Vendor Reviews/Selection Dec 2000 • Partnership Contract finalized May 2001 • Executive Sponsors, Project Plan finalized June 2001 • Strategy Maps and Measures designed July-August 2001 • “Start-up” Failure October 2001 • SAS 4-Year Partnership finalized January 2002 • 9 month project plan: • Surgery scorecards implemented by Sept/Oct 2002 • Nursing scorecards implemented by Nov/Dec 2002 • includes knowledge transfer, and development of training strategies

8. BSC Hierarchy Planned for BWH Executive Strategy Other Depts Surgical Objectives Nursing Objectives Key Surgical Performance Indicators Key Nursing Performance Indicators Key Indicators for Each Dept.

9. BSC Cascading Structure for Pilot Areas Executive Scorecard Finance Scorecard Nursing Services Surgical Services Nursing Directors Surgical Depts Nurse Managers Surgical Divisions Nursing Cost Centers Surgeons Nursing PODs

10. BSC Project Implementation Schedule

11. Resources and Project Organization • Resources • PMAG - project management and design • Information Systems - infrastructure and external feeds • SAS - implementation services and training • Ongoing support and maintenance with existing staff in PMAG and IS • Project Organization • Executive sponsorship • Oversight committee • Core project team - BWH and SAS

12. Steps in Implementing a Dept Scorecard • Establish an Executive Champion (VP) • Select and educate a BSC development group • Develop “strategy map” and strategic goals for dept • Inventory/brainstorm all potential measures for each goal • Determine which measures exist or can be captured • Rationalize list of measures • Develop detailed measure documentation • Develop data extracts • Develop “report” specifications • Develop BSC reporting hierarchy & security access • Data warehouse, scorecard, measure, report programming • Scorecard QA (reconciliation against source systems & reports) • Roll-out, education, and training

13. Why the SAS BSC Software Solution at BWH? • Extensive RFP process yielded SAS product as market leader • Certified by BSC Collaborative • Few healthcare institutions have attempted this….national leadership opportunity as the SAS-AMC reference client • SAS CEO’s commitment to creating “showcase” BWH program • Exceptional corporate stability and reputation (largest private software company in the world) • Exceptional SAS BSC & Healthcare content expertise • Underlying data warehouse structure easily accommodates automated feeds from existing BWH data sources (TSI, CHASE, Press Ganey, MS Access, MS Excel, etc.) • Associated SAS analytic tools included for internal PMAG use • System can be “owned” by BWH after implementation

14. Integrating the Balanced Scorecard Framework into Strategic Management

15. BSC - Level 1 Successful Outcomes(Reporting & Decision Support Tool) • Strategy maps incorporate major institutional goals from 4 different, “balanced” perspectives: • Financial Health • Patients & Community • Quality & Efficiency of Care • Employee Development & Clinical Innovation • Measures selected for each goal are meaningful • “Balance” of tangible and intangible measures • “Balance” of outcome (lag) & process measures • Multiple reporting efforts consolidated in a “balanced” way • Access to and use of critical data is improved

16. BSC - Level 2 Successful Outcomes (Performance Management Tool) • VP’s, Chiefs, Managers, providers access BSC regularly to help manage their areas of accountability, and/or assess their own performance • VP’s, Chiefs, etc. use in one-on-one and mgmt meetings with staff to discuss problem areas needing attention • Linkages between quality/safety, customer, & employee results to overall financial outcomes start to become apparent • Correlations (+ and -) between measure trends can be seen and acted on (e.g., staffing productivity, errors, satisfaction) • Adverse measure trends generate requests for more drill-down and analysis to help guide corrective steps • Convert “data-rich” BWH culture into “focus on information”

17. BSC - Level 3 Successful Outcomes (Strategic Leadership & Management Tool) • Board and Executive Leadership adopt BSC framework as part of strategy formulation and hospital-wide communication plan • BSC has the potential to translate equally well to clinical care providers (MD’s, RN’s, etc), leadership, managers, & board members • Executive strategy map and measures reviewed at least annually and revised to capture new priorities • Key Executive goals and measures cascade throughout all lower-level strategy maps and scorecards • Review of BSC goals and measure performance incorporated into leadership meetings • Research and education goals/measures incorporated along side strong set of clinical indicators • Equal accountability mandated for goals in all 4 quadrants

18. BSC Lessons Learned to Date • Executive sponsorship and buy-in was key to getting project off the ground and funded for 4 years • VP sponsors for pilot areas were true advocates • each believed in usefulness of scorecards for managing their areas, but were struggling with paper-based, manual solutions • All executive leaders look forward to consolidation of existing reports and management data into “one place” • A data warehouse that can accept key healthcare feeds, with minimal internal programming, is essential • Limiting # of measures is critical, but difficult • Supporting reports and level of drill-down is designed to answer first question a user might have about a trend - not to replace source systems/reports or more sophisticated root-cause analyses • BSC framework has been easy to explain and well-accepted

19. Questions? Contacts: Michael Gustafson - mgustafson@partners.org Sue Schade - sschade@partners.org Ken Finn - ken.finn@sas.com