The Glue

How Hospital Scorecards Change Before, During, and After Improvement

During each stage of an organization's improvement journey, the discussion changes and therefore their Balanced Scorecard content/structure changes.

• Before improvement you look for root cause.
• During improvement you verify that suggested remedies fix the problem.
• After improvement you sustain the gains you've achieved.

Take for example a hospital with poor performance in the medication reconciliation component of their patient safety composite.  That would appear on your top level scorecard as the lagging measure "Accurately and Completely Reconcile Medications Across Continuum of Care" which is the Joint Commission's National Patient Safety Goal 8A.

Scorecard Structure Prior to Improvement:  the first action will be to charter a project team to look into root causes and suggested remedies.  The scorecard should show three things at this point:

• The Lagging Measure: "Percent of Medications Accurately and Completely Reconciled Across Continuum of Care."
• The Dimensional Drill Down Measures: Break down the lagging measure by the same unit of measure across your departments to see if the problem is systemic or exists in just a few areas.
• The New Initiative: You want to get a status on the timing, budget, and resources right away and make sure your team gets to root causes as quickly as possible. They might follow the PDCA, Test of Change, CAP, RPI, or even Lean Six Sigma project methodology to do so.

Relating the "Medical Home" to Balanced Scorecards

According to a July 21st  New York Times article called “Trying to Save by Increasing Doctors’ Fees”, the latest "new, new thing" is the Medical Home, being piloted by payers across the nation. As stated in the article:

"The idea is that by paying family physicians, internists and pediatricians to devote more time and attention to their patients, insurers and patients can save thousands of dollars downstream on unnecessary tests, visits to expensive specialists and avoidable trips to the hospital."

Here in Pennsylvania, where I live, IBC, Aetna, and Cigna are spending upwards of $13M on these programs over the next 3 years.

The way I see it, there are striking parallels between these ideas and some of the fundamentals of well-deployed Balanced Scorecards. To explain, let me translate the Medical Home concepts into Balanced Scorecard speak. The goal of the Medical Home is to save money on “downstream” costly conditions (i.e. lagging measures) by spending money on less costly “upstream” activities (i.e. leading measures). This is exactly the type of thing you would want to see on a Balanced Scorecard for a Primary Care area of a health system.

In a deployed Balanced Scorecard framework, there should be alignment between the lagging indicators of performance (e.g., the number of patients with expensive conditions) and the leading indicators that impact that measure (e.g., t he number of preventative efforts that have been shown to improve or prevent those conditions).

Hospital Scorecards: Where Should Strategy Live? How About Balance?

At all levels of a hospital or health system, from the board of directors to the nursing units and support departments, good scorecards should be "balanced," meaning that they should include objectives that represent all of the hospital's key stakeholders (e.g., patients, physicians, employees, community, financial stewardship, etc., depending on the particular hospital's situation).

But there are different reasons for that balance.

First, let me say that there will be meetings where parts and pieces of Balanced Scorecards will be reviewed, such as budget reviews, event reviews, and quality governance meetings, but these meetings are not intended to be conversations about the holistic strategy, so these won't necessarily cover the full scope of a truly "balanced" scorecard framework, which is just fine.

Now let me examine the different reasons for balance in scorecards at all levels of the hospital.

The Board Level and CEO Scorecard – All perspectives (i.e. strategic groupings) will be present and the holistic strategy will be represented. This audience views the strategy as it cuts across all the silos of the organization. This scorecard shows how success in objectives for the workforce, internal processes, and external partnerships will translate into better patient experiences and improved quality of care, as well as improved financial performance.

Chief Strategy Officer Titles & Roles in Healthcare

I have lately been seeing the position of Chief Strategy Officer (CSO) become more prominent in the hospital setting, either by title or by invitation to executive leadership meetings.

In the past, there was often a business development/marketing person that reviewed business opportunities and assembled a proforma for review by the hospital’s CFO and CEO. More and more, I see that same person actively engaged with the “C-suite” and, as was discussed previously on this blog (in "Is Strategy Execution Anyone's Full Time Job in a Hospital?"), an individual is sometimes named as a chief officer over strategy development and execution.

As we all know, even with improved visibility for this role, there are still debates over who actually “owns” the strategy process. Is it accounting, finance, marketing? Is it the CEO? It really shouldn’t be a question of who or where it is owned, but one of who is involved in the strategy development and execution processes, from A to Z. Are they working together? Are they, as a team, able to achieve alignment? If there is a CSO, he or she can help drive this, but -- much like quality -- strategy must be everyone's job if it's going to be executed effectively.

Is Strategy Execution Anyone's Full Time Job in a Hospital?

Virtually all hospitals and health systems have full-time staff responsible for developing strategy. These VPs and Directors of Strategic Planning work in concert with their CEOs, Executive Teams, and Board Members to create what is often a 100+ page document we're all used to seeing.  Unfortunately, what we're not used to seeing is a single person who has the full-time job of executing that strategy. 

After years of working with our nation's largest and smallest hospitals, my advice for all of these organizations is to appoint a "Strategy Execution Officer" (an SEO). This person's job would be to address two themes that I see across all hospitals: a lack of understanding of the effort it takes to execute strategy and a lack of accountability for doing it.

In a nutshell, here are the major responsibilities for the SEO:

Hospital Scorecards Should Reflect CMS P4P Plan

I have spoken with many hospitals who are working hard to prepare their balanced scorecard systems for POA requirements and IPPS payment reforms. There’s another subtle change affecting reimbursement that hospital executives should have their scorecards reflect.

At the March 6, 2008 Senate Finance Committee roundtable, AHA said the goal of the CMS P4P plan should be to improve performance, not to cut the program’s budget. Their recommendation is to award points on any required safety or quality measure for both performance AND improvement over a baseline.

This concept is very much in line with the spirit and structure of the balanced scorecard, where measures are evaluated based on trend analysis, looking for sustained improvement over time.

This will require two efforts:

• show the baseline performance on your scorecard
  
• provide training to department leaders to discuss the trend during performance discussions

How to Measure the Hard to Measure: Part 2 - Large Quantities of Measures

In my previous Part 1 post on measures, I discussed Measuring Project-based Objectives. This time I'll talk about how to deal with the omnipresent problem of too many measures.

Ideally, Strategy Execution projects include a lot of time of figuring out what critical few objectives are important to an organization and picking a few measures. Sometimes, however, there are industry standard measurement frameworks that are designed to make it easier to compare performance across different organizations.  These frameworks serve a great purpose and can really help define focus in an organization. But if you are not careful, you may find that the sum of the parts is not really a useful tool to help get the results you are looking for.

Take HEDIS, (Health Plan Employer Data and Information Set) for example. This is a set of more than 60 measures (the number changes with new releases) that indicates everything from how fast a health plan answers a phone to how well they screen their members for cancer.  It's a great tool for businesses to compare health plans and many health plans work hard to improve their numbers.  There are lots of other examples of such frameworks in hospitals, IT Organizations, Government and many other categories and the dangers we are talking about apply to them as well.

In an ideal world, the HEDIS measures might be sprinkled across many different scorecards in the organization -- owned by those accountable for them.  So the director of the call center might own the two or three metrics related to that, the Chief of Cardiology Standards might own the few related to heart treatment, etc.  Invariably, though, top executives want a single number that tells them "how we are doing on our HEDIS measures."

A Brief Primer on Lean Six Sigma and Its Benefits

Before I discuss Lean Six Sigma, I'll quickly cover the fundamentals of the two contributing approaches, Six Sigma and Lean.

Six Sigma is typically defined as a disciplined, statistical approach aimed at increasing profitability by reducing defects. There is a large Six Sigma "tool box" of analytical, data-driven approaches that help companies improve quality in this way.

I tend to think about Six Sigma more holistically than many of its current adherents. I also take to heart a comment made by Bill Smith, the Motorola engineer who invented Six Sigma: “If you want to improve something, involve the people who are doing the job.”

So I see the power of Six Sigma as greatest when it is thought of more broadly, as an organizational shift wherein employees use a disciplined approach to improve overall business performance, using data and focusing on controlling process variation. This is even more powerful when built into a Strategy Execution approach, so that improvement efforts are focused on the most strategically important problems for the business.

What Hospital Executives Should Know About HLQAT

I'll start with the definition. HLQAT stands for Hospital Leadership & Quality Assessment Tool and the core team is pronouncing this either "Hel-Cat" or "Hospital L-Cat."

HLQAT is being created in a public-private partnership between QIOs (chiefly led by the Oklahoma Foundation for Medical Quality), CMS, the University of Iowa College of Public Health, and Premier/CareScience. AHA, IHI, and many other organizations (now including ActiveStrategy) are advising and contributing to the tool and its testing and implementation. This broad level of participation tells me that the HLQAT will gain quick acceptance.

So what will it do? HLQAT will be an assessment tool to help hospitals identify and adopt quality-oriented leadership systems and ultimately improve clinical care processes and outcomes. As part of the HLQAT testing and implementation phases, responses to the survey are being correlated to quality data from the CMS data warehouse, as well as other data sources. This correlation phase will allow HLQAT to provide significant insights into the linkages between quality outcomes and a hospital's leadership structures, processes, and activities.

Where's the Strategy?

I just turned 40 last week and since I spent much of my birthday thinking about today's blog, it dawned on me that I need a social life.  Nevertheless, here we go...

The most common problem I find with strategy execution after the first few months of implementation is: the organization’s balanced scorecard loses its strategic focus and turns into mere reporting.

The ripple effects are these:

1. Extra work for front line staff without the payoff of executive review
2. Executive staff dissatisfaction with the results their scorecard is achieving
3. Diminished alignment of projects to strategic objectives

By making sure you do the following on your balanced scorecard framework, you can prevent these from happening to your organization:

Measure Composites on Hospital Scorecards That Work

I took some time this week to reflect on something I see on every executive level hospital Balanced Scorecard -- the dreaded "composite" measure. 

Satisfaction Composite, Safety Composite, Core Measure Composite, Engagement Composite, and on and on.  You can add a system "average" into this discussion as well. 

Composites are a reality we all live with in large healthcare organizations, but are these really meaningful measures? 

They certainly can be. They can provide visibility for the executive staff into which parts of the organization are doing well, allowing them to share best practices with teams that aren't doing so well.  Composites can also be used to set top-level targets, which help us determine if we're on track to achieve our organizational vision.

To make them helpful, there are options you should consider when you're creating composites, based upon whether you're using them to report out or using them to manage your hospital.  Let's focus on the composites that help you manage your hospital.

Overcoming the Question that Kills Balanced Scorecards

If you're leading the development or deployment of a Balanced Scorecard framework, you must be prepared to answer this question when it inevitably comes up: "Does this mean extra work?"

I consider this to be the toughest question that you'll face because, if not answered properly every time it's asked, this question can destroy your Balanced Scorecard framework.

Are you prepared to answer it?

There are five parts of the answer and all five are necessary:

Part #2: Tackling the Organizational Barriers that Hinder Hospital Outcomes

In my previous article on this subject, I discussed the first 2 organizational hindrances to sustained hospital improvement:

1. Leadership turnover
2. Fear of upsetting physicians
   
   Now, on to items 3-5:
3. One-way communication from executives – Improvement happens on the front line, so if that part of a Balanced Scorecard (BSC) framework withers, improvement does too.  I see this often.  The BSC project starts off with a bang.  Slowly, but surely, nurses and lab workers stop inputting data and stop holding reviews.  Why?  They realize the executive team isn't looking at the information they work hard to put into the BSC system.  I’ll go a step further.  When you roll out your BSC, everybody on the front line expects this to happen.  They figure executives will lose interest soon enough and move on to something else.
   
   How to keep healthy communication going? The executive team must meet regularly to evaluate and challenge the progress they see in the BSC, including drilling down into leading measures and the improvement projects that drive them.  They must clearly let the front line know they are not just reviewing performance, but also listening.  Communication around improvement must flow in all directions.  Otherwise, it’s only a matter of time until the front line gives up.
4. Improvement delegated (not owned by the C-level) – Who OWNS your BSC framework?  Is it the Chief Medical Information Officer, the COO, the CNO, glory be…a Chief Strategy Officer?  Or does the executive team think that the DSS team owns it, or the VP of Clinical Quality, or that Chief of Staff who's relied upon to get everything done?
   
   Outcome measures on the top-level scorecard need to be owned by C-Level executives.  End of story. If that doesn’t happen, the BSC is in big trouble.  By owning, I mean they are accountable to the rest of the executive team for reporting, on a routine basis, on whether all the moving parts are on track to add up to the goal they’ve set.  Only someone with the authority and title at the C-Level can truly keep all the cross-functional entities on the hook that are required to make sustainable change.

Tackling the Organizational Barriers that Hinder Hospital Outcomes

Across the U.S., study after study shows that our hospitals have not yet achieved and sustained improvements in clinical quality and safety outcomes.  This is in spite of the fact that most hospitals have an abundance of data, multiple dashboards upon which to view data and reports, and many even have Balanced Scorecards (BSCs) in place. 

So, beyond the common issues that all large organizations face regarding change and improvement, what are specific organizational barriers that get in the way of hospitals achieving  strategic outcomes and what are some ideas for overcoming them?

Here's my "Top 5" list of issues that get in the way for hospitals:

1) Leadership turnover
2) Fear of upsetting physicians
3) One-way communication from executives
4) Improvement delegated (not owned by the C-level)
5) Lack of mechanism to identify and share best practices

Of course there is a rich body of knowledge and training on improvement techniques.  (In fact, I’m writing this as I'm attending a two-day IHI workshop called the “Science of Improvement.”)  Despite all this information, however, these organizational barriers continue to impede hospitals. Today, I'll focus on the first 2. Part II of this article will cover 3-5.

Use BSC together with LEAN to achieve Hospital Safety results

According to a September 19th article in the Wall Street Journal (http://blogs.wsj.com/health/2007/09/18/more-hospitals-lag-than-leap-on-quality/), just over 1/3rd of the hospitals they surveyed have adequate hand-washing policies to prevent the spread of antibiotic-resistant infections.  This should be frightening.  You would hope the results would be better coming from hospitals that volunteered to be surveyed on the topic.  With the recent push from hospital quality experts to utilize LEAN methods and the attention of IHI, AHA, CMS and others on the topic, why do so many hospitals struggle with Safety?  Answer: they still need the Oversight, Accountability, and Support offered by a balanced scorecard framework.

LEAN thinking in healthcare is not new.  I recall reading a 2004 IHI Innovation Series white paper called “Improving the Reliability of Health Care.” (www.ihi.org), where Thomas Nolan discussed many LEAN topics.  For those of you who would like a quick, high level LEAN overview, see the "high level overview of LEAN methods in hospitals" section of this post.

Informed Executive Oversight– the Hospital executive team will know their business, but they may not know what role they play in a LEAN Hospital. When the Executive team looks at their balanced scorecard and sees a LEAN initiative aligned to a top level safety measure, they need coaching to know what to expect.  For example, if they spot a LEAN initiative on their scorecard that is expected to improve results, they need to expect to see information regarding the current and future state value streams.  Without informed executive oversight, Hospital executives often hear best guesses during scorecard reviews rather than systematic Root Cause Analysis.

Accountability - for LEAN to work, it requires CHANGE.  There will be changes to processes across the silos of the hospital.  Only through repeated, structured reviews with each impacted scorecard team can you ensure that those accountable don't escape.  Without executive visibility to who's accountable and how they are performing, the status quo will likely continue and NOTHING WILL CHANGE.

How Balanced Scorecards Help Hospitals Put IHI Recommendations Into Action

What’s the one weak area for all hospitals implementing IHI’s “Boards on Board” guide?  Execution.

The IHI white paper, Execution of Strategic Improvement Initiatives to Produce System-Level Results (by Thomas W. Nolan,  Institute for Healthcare Improvement; 2007; available on www.IHI.org) makes this case and offers a plan for overcoming the execution hurdle.

The fact is the very heart of the solution this white paper proposes already exists within your organization if you have a Balanced Scorecard (BSC) framework. A healthy BSC framework and IHI’s proposal are both based upon two key factors: FOCUS and REVIEWS. 

FOCUS
The struggle within large health care organizations is that everybody wants to see everything and it’s hard to keep executives focused on the “critical few.”  Lack of focus leads to under-resourced projects that don’t achieve improvement. The BSC is all about focus (narrowing a strategic plan down to a max of 10-12 objectives).