Performance management and measurement in healthcare
In healthcare, performance measurement is very important as many lives depend on the doctors’ performance, and therefore, process perfection should be promoted in this domain, together with productivity. Moreover, the hospital administration needs to know where the hospital is heading; they have to plan the budget, thus being important to consider how much money to invest in research or innovation, for instance, and how much to allocate for medicines or equipment. Furthermore, the mission of the organization should be always kept in mind, just like patient outcomes, which are a way of reflecting the image of the hospital.
So, as it can be seen, it is crucial to set in place a measuring system, because what is measured, gets improved. Quality and performance improvement is a key driver of cost containment and higher value, where quality equals health outcomes. Put in a different way, the drive for better quality of health outcomes and that for increased productivity do not exclude one another. So, when an organization, in this case a medical institution, improves quality, the costs decrease. And this decrease occurs due to the fact that the costs of wasted effort on solving certain problems, correcting medical errors, reassuring dissatisfied patients and reconciling invoices are eliminated. Therefore, productivity gets improved because of the increased use of human capital, technology and working capital that produce good patient outcomes.
Quality and performance metrics should take into account three main perspectives when analyzing the data: operational excellence, value proposition and economic value.
Defined as the extent to which the core administrative and clinical function are managed correctly, it is a key driver of patient outcomes and economic value as well. Metrics should evaluate how the professional expertise, together with technology and protocols deliver care in a productive manner; they should track throughput, cycle times, costs and defect levels.
Healthcare organizations deliver value to their patients, their families and third party payers. Metrics should evaluate the quality of the healthcare outcomes and whether these outcomes are in favor of the patient or not, over the care cycle. Moreover, they should measure if the needs of the patient have been fulfilled, as well as the extent to which administrative functions satisfy the payers’ requirements.
Quality and performance metrics should evaluate whether the healthcare delivery operations provide financial profits, as they have to sustain the activities of the institution and fund its long-term growth. Financial return, financial viability and budget performance are only a few examples of what needs to be measured.
Performance needs to be measured and kept track of because, as Vince Lombardi said, “if winning isn’t everything, why do they keep score?”. And this quote can be applied in any industry, not just in healthcare.
- Lean Six Sigma Healthcare (2012), The value of key performance indicators for healthcare providers
- McCann, E. (2012), Clinical analytics ‘next big thing’
- Versel, N. (2012), Clinical analytics boosts HER effectiveness