Using a Balanced Scorecard t

8/11/2019 Using a Balanced Scorecard t

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Using the Balanced Scorecardto Manage Lab Performance

Using the Balanced Scorecardto Manage Lab Performance

Andrew Bridgeman, MBAAndrew Bridgeman, MBA

DISCLOSUREDISCLOSURE

Relevant Financial Relationship(s)

None

Off Label Usage

None

Relevant Financial Relationship(s)

None

Off Label Usage

None


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Todays DiscussionTodays Discussion The Balanced Scorecard

What it is Where it came from Balanced Scorecard vs. Dashboard

Balanced Scorecard in the Laboratory Steps to implement Example - Division of Anatomic Pathology at

Mayo Clinic

Questions/discussion

The Balanced Scorecard What it is Where it came from Balanced Scorecard vs. Dashboard

Balanced Scorecard in the Laboratory Steps to implement Example - Division of Anatomic Pathology at

Mayo Clinic

Questions/discussion

Life of a Laboratory ManagerLife of a Laboratory Manager Staffing issues/shortages

Complex technology

Growing supply expenses

Competition for resources

Regulatory constraints

Challenging IT systems

Decreased reimbursements

Multiple stakeholders to satisfy

Planning + Communication + Implementation

A management tool to help = the Balanced Scorecard


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What is a Balanced Scorecard?What is a Balanced Scorecard? A well-rounded set of quantifiable measures

derived from an organizations strategy A well-rounded set of quantifiable measures

derived from an organizations strategy

Scorecard acts as..

measurement system

communication tool

tool to manage

strategy deployment

The Balanced Scorecard- some history.

The Balanced Scorecard- some history.

Originated from research on how managers measureoperational performance Kaplan and Norton, 1992

Their findings: Financial statements are not enough to manage abusiness

Managers want a balanced view of bothoperational and financial measures

Lack of measures to ensure strategic plans werebeing deployed


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Financial

Objectives

Measures

Targets

Initiatives

Customer

Objectives

Measures

Targets

Initiatives

Learning andGrowth

Objectives

Measures

Targets

Initiatives

Internal BusinessProcesses

Objectives

Measures

Targets

Initiatives

What must

we excel at

internally?

Are w e

performingfinancially?

What is

important to

our

customers?

How do we

adapt and

improve?

Vision &

Strategy

The Kaplan

Norton Model

Key Characterist ics of theBalanced Scorecard

Key Characterist ics of theBalanced Scorecard

Quick and comprehensive view of the business

Links vision and strategy to operational activit ies

Method for aligning organization to commongoals

Quick and comprehensive view of the business

Links vision and strategy to operational activit ies

Method for aligning organization to commongoals

What you measure is

what you get


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Scorecard ImplementationScorecard Implementation

Generic steps for implementing a BalancedScorecard (from Niven, Kaplan/Norton)

Steps illustrated using Division of AnatomicPathology at Mayo Clinic

Generic steps for implementing a BalancedScorecard (from Niven, Kaplan/Norton)

Steps illustrated using Division of AnatomicPathology at Mayo Clinic

Steps for Balanced ScorecardSteps for Balanced Scorecard

Step 1 Select the organization level

Step 2 Purpose, vision, and strategy

Step 3 Strategy map

Step 4 Balanced Scorecard: Measuring yourobjectives, setting targets, focusing initiatives

Step 5 Aligning organization through cascadingscorecards

Step 6 Implementation and beyond



Step 3 Strategy map





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Step 1 Select the Organization

Level

Step 1 Select the Organization

Level What is your product /service? Who is your

customer?

Clear strategy

Executive sponsorship of Balanced Scorecard

Division of Anatomic Pathology Interpretation of biopsies, surgical

specimens, cytology, 2nd opinion consults for

Mayo cl inic ians/patients and MML clients 9 labs (i.e. Histo logy, Cytology, IP, Molecular) 51 pathologists; 300+ allied health staff

Step 2 Purpose, Vision, andStrategy

Step 2 Purpose, Vision, andStrategy

Foundation of scorecard Mission statement why we exist Values guiding principles Vision picture of the future Strategy set of activities to guide the organization to

achieve its vision

Anatomic Pathology Strategy Mayos Primary Value: The needs of the patient come first

Anatomic Pathologys vision is to deliver h igh value, patientcentric pathology services through the integration of ourclinical knowledge, research and educational endeavors.

Annual strategic planning invol ves medical leadership,administration, and lab management


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Financial

Objectives

Measures

Targets

Initiatives

Customer

Objectives

Measures

Targets

Initiatives

Learning andGrowth

Objectives

Measures

Targets

Initiatives

Internal BusinessProcesses

Objectives

Measures

Targets

Initiatives

What must

we excel at

internally?

Are w e

performingfinancially?

What is

important to

our

customers?

How do we

adapt and

improve?

Vision &

Strategy

The Kaplan

Norton Model

Strategy Map: Anatomic Pathology

Financial

Organization

growth and

learning Hire and retainbest people

Reduce costs

Customer

Develop newtests / services

Provide the bestpathology services

Expand knowledgeIn science

Improve operationefficiency

Highest qualityof service

Develop culture ofcontinuous

improvement

Fast turnaroundtime

Fundedmission

Clinical

Practice

Step 3 - Strategy MapTranslating your st rategy into specific objectives for

the scorecard

Step 3 - Strategy MapTranslating your st rategy into specific objectives for

the scorecard


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Steps for Balanced ScorecardSteps for Balanced Scorecard Step 1 Select the organization level


Step 3 Strategy map to define objectives






Step 3 Strategy map to define objectives




Step 4 Balanced Scorecard:Measuring your Objectives, Setting

Targets, Focusing Initiatives

Step 4 Balanced Scorecard:Measuring your Objectives, Setting

Targets, Focusing Initiatives

Each objective needs a way to measure success

Measure details that need to be considered How measured exactly? Where does data come from? Who owns the measure?

Frequency of reporting?

Each objective needs a way to measure success

Measure details that need to be considered How measured exactly? Where does data come from? Who owns the measure?

Frequency of reporting?


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Employee retention Turnover

Employee satisfaction

Education/trainingevents

Measuring Potential Measures

Revenue

Net income

Expenses

Test turnaround time

Number of events andnumber of errors

Number of revised reports

Tests per FTE

Perspective

Customer

Organization

learning and

growth

Financial

Internal

business

processes

How do we know we aremeeting our customers

needs?

Are we performing financially?

What must we excel atinternally?

How will we satisfy both ourcustomers and our financial

needs?

How do we support our goals andimprove as an organization?

People requirements

Organizational culture

IT infrastructure

Customer satisfaction

Customer retention

Quality reputation

Market share

Test volume

Complaints

Number of tests offered

Profit as % of sales

Revenue from newtests

Reimbursement rate

Space utilization

New tests introduced

Waste reduction

Regulatory audit results

Continuous improvementprojects

Research projects

Peer reviewed articles

IT improvements

Measures and targetsMeasures and targets

After measures are determined need targets anda way to achieve them

Setting targets Executive interviews Benchmarking Historical trends

Executive support for measures and targets

After measures are determined need targets anda way to achieve them

Setting targets Executive interviews Benchmarking Historical trends

Executive support for measures and targets


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InitiativesInitiatives Initiatives - Specific tactics/projects that drive

achievement of objectives

Example

Objective Reduce operational costs

Measure Supply expenses

Target - Achieve annual plan goal

Initiative Supply chain optimization

Develop systematic ordering processes for labsupplies

Retention rate

Number of IRBs

Number ofpublications

Education events

Objectives Measurement

Revenue

Net income

Supply expenses

Tests per FTE

Case TAT

Events & errors

New testsintroduced

Perspective Initiative

Staffing to workload

Practicestandardization

MAPDOG

Supply chain optimization

Target

At plan

At plan

Below plan

Improve

Case specifictargets

Drive to 0

Achieve plan

Customer

Organization

learning andgrowth

Financial

Clinical

practice

Provide the best pathologyservices

Funded mission

Reduce operational costs

Improve operation efficiency

Fast turnaround time

Highest quality services

Develop new tests

Hire and retain best people

Expand knowledge in science

Develop culture of continuousimprovement

Histology & Cytologyschool, PA intern

program

Lean program

Case volumes

Client surveys

Increasing

High marks Test status

communication

Report delivery pilot

Staffing to workload

Improve

Increase

Increase

Achieve plan


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AP Division ScorecardAP Division ScorecardCUSTOMER

Patient case

volumes and

turnaround

time

FINANCIAL

CLINICAL

PRACTICE

Productivity,

Tests/FTE

CLINICAL

PRACTICE

Quality trends:Events, Errors,

Amendments , Safety

incidents

ORGANIZATIONAL

New tests developed

Research activit y

ORGANIZATIONAL

Staff recruitment,

retention, education

Process

improvement

projects

Process Improvement and BalancedScorecardProcess Improvement and BalancedScorecard

Balanced Scorecard can..

Focus continuous improvement Scorecard initiatives drive the pro ject priorities Metrics demonstrate areas needing work

Measuring benefits of continuous improvement Impacts to organizational metrics Holding gains after project completion

Lean Tool ox


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Supply Chain OptimizationSupply Chain Optimization

Strategic initiative to improve how supplies were managedin the labs

Goals:a. Reduce expense and excess inventory

b. Implement business contro ls

c. Free up cli nical space and staff time

d. Improve vendor quality, cost, delivery and service

Strategic initiative to improve how supplies were managedin the labs

Goals:a. Reduce expense and excess inventory

b. Implement business contro ls

c. Free up cli nical space and staff time

d. Improve vendor quality, cost, delivery and service

Manual Inventory SystemManual Inventory System

Re-order Point

Supplies Arrive

Item Description

ROP

Item ID Number

Re-Order Qty

Source


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Automated Inventory SystemAutomated Inventory System Most of our labs now use an automated inventory

system

Principles are the same as the manual systemwith benefit of automatic order placement

Most of our labs now use an automated inventory

system

Principles are the same as the manual systemwith benefit of automatic order placement

Chose six key

metrics

Financial and

operational

Designed with

the customer in

mind

Sent out

regularly each

month

Supply Chain Dashboard


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AP Division ScorecardAP Division ScorecardCUSTOMER

Patient case

volumes and

turnaround

time

FINANCIAL

CLINICAL

PRACTICE

Productivity,

Tests/FTE

CLINICAL

PRACTICE

Quality trends:Events, Errors,

Amendments , Safety

incidents

ORGANIZATIONAL

New tests developed

Research activit y

ORGANIZATIONAL

Staff recruitment,

retention, education

Process

improvement

projects

Step 5 Aligning Organization throughCascading Scorecards

Step 5 Aligning Organization throughCascading Scorecards

Scorecards at each level which supports thehighest level scorecard

Lower levels should focus on whatmeasures they can impact

Al igns enti re organizat ion aroundleaderships strategy

Scorecards at each level which supports thehighest level scorecard

Lower levels should focus on whatmeasures they can impact

Al igns enti re organizat ion aroundleaderships strategy


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LabScorecards

Strategic

Plan

AP Balanced

Scorecard

- Strategic

objectives

- Support of

Division goals

- Lab performanceto lab measures

- Performance

to plan

- Division measures

- Performance targets

- Division in itiatives

AP Strategy and Execution

Test volumes,

Productivity

Process improvement

projects

Quality: events, errors

Staff retention,

Education

Financials

Test TAT

Test

development

Lab Scorecard


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Staffing vs. Workload

(1250 blocks, Cut finish at 12 noon, Delivery 2pm)

0

5

10

15

20

25

2:00

PM

3:00

PM

4:00

PM

5:00

PM

6:00

PM

7:00

PM

8:00

PM

9:00

PM

10:00PM

11:00PM

12:00AM

1:00

AM

2:00

AM

3:00

AM

4:00

AM

5:00

AM

6:00

AM

7:00

AM

8:00

AM

9:00

AM

10:00AM

11:00AM

12:00PM

1:00

PM

Hour

FTE Total Techs required

Tech schedule

Lab Initiative Staffing to Workload

1120 block avg

6 days 1200+

TAT Management - Workf low Monitoring


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Tracks orders fo r

four different lab

areas

Manage turn

around time

Monitor

rework trends

Packet

summary Instrument preventative

maintenance info

Lab Dashboard

Lab Dashboard ExampleLab Dashboard Example

Easily accessible to the lab staff

Gives a current snapshot of

what is going on

Real-time data to make

operational decisions

The dashboard is updated

real-time and displayed in

the entrance to the lab


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Cascading Scorecards Key PointsCascading Scorecards Key Points

Measures that directly relate to each other Lab scorecard supports the Division

scorecard

A powerful way to al ign ent ire organizationaround common vision and goals

Lab initiatives and activit ies are focused bykey AP strategic goals

Measures that directly relate to each other Lab scorecard supports the Division

scorecard

A powerful way to al ign ent ire organizationaround common vision and goals

Lab initiatives and activit ies are focused bykey AP strategic goals

Step 6 Implementation and BeyondStep 6 Implementation and Beyond

Data collection and reporting Develop systematic methods for datacollection

Leverage existing IT resources: LIS, financialsystems, other

Timely publishing/reporting in your scorecardformat

Review process Investigate areas not meeting targets Prioritize improvement efforts

Data collection and reporting Develop systematic methods for datacollection

Leverage existing IT resources: LIS, financialsystems, other

Timely publishing/reporting in your scorecardformat

Review process Investigate areas not meeting targets Prioritize improvement efforts


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Step 6 Implementation and Beyond,

continued.

Step 6 Implementation and Beyond,

continued. Communication

Publish the scorecard for the organization Educate staff on what the scorecard is tellingthem

Review with leadership - demonstrates dailyactivities support the strategic vision

Scorecard evolution Doesnt have to be perfect first time Link to annual planning cycle Periodically review measures for relevance

Communication Publish the scorecard for the organization Educate staff on what the scorecard is tellingthem

Review with leadership - demonstrates dailyactivities support the strategic vision

Scorecard evolution Doesnt have to be perfect first time Link to annual planning cycle Periodically review measures for relevance

Steps for Balanced ScorecardSteps for Balanced Scorecard



Step 3 Strategy map






Step 3 Strategy map





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Summary BenefitsSummary Benefits

Balanced scorecard provides a tool to deployyour organizations strategy, links operationalactivity to long term vision

Provides a set of measures to help manage theorganization

Sets direction for supporting work units andimprovement efforts

A communication tool, a common lens to view theoperation

Balanced scorecard provides a tool to deployyour organizations strategy, links operationalactivity to long term vision

Provides a set of measures to help manage theorganization

Sets direction for supporting work units andimprovement efforts

A communication tool, a common lens to view theoperation

ReferencesReferences

Castaneda-Mendez, K., Mangan, K., Lavery, A. (Jan 1998). The Role andApplicati on of the Balanced Scorecard in Health Care Qual ity Management .Journal of Health Care Quality, pp. 10-13.

Kaplan, R. & Norton, D. (1996). The Balanced Scorecard , President andFellows of Harvard College

Kaplan, R. & Norton, D. (2001). The Strategy-Focused Organization,Harvard Business School Publishing Corporation

Niven, P. (2006). Balanced Scorecard Step-By-Step , John Wiley & Sons

Park, E. & Huber, D. (Jan 2007). Balanced Scorecards for Performance

Management. The Journal of Nursing Administration, pp. 14-20. The Senalosa Group. Pyramid Graphic. Retrieved October 15, 2008 from

http://www.senalosa.com/services/consulting

Zelman, W.N., Pink , G.H, & Matthias,C.B. (2003, Summer 2003). Use of theBalance Scorecard in Health Care. Journal of Health Care Finance, pp. 1-16.

Castaneda-Mendez, K., Mangan, K., Lavery, A. (Jan 1998). The Role andApplicati on of the Balanced Scorecard in Health Care Qual ity Management .Journal of Health Care Quality, pp. 10-13.

Kaplan, R. & Norton, D. (1996). The Balanced Scorecard , President andFellows of Harvard College

Kaplan, R. & Norton, D. (2001). The Strategy-Focused Organization,Harvard Business School Publishing Corporation

Niven, P. (2006). Balanced Scorecard Step-By-Step , John Wiley & Sons

Park, E. & Huber, D. (Jan 2007). Balanced Scorecards for Performance

Management. The Journal of Nursing Administration, pp. 14-20. The Senalosa Group. Pyramid Graphic. Retrieved October 15, 2008 from

http://www.senalosa.com/services/consulting

Zelman, W.N., Pink , G.H, & Matthias,C.B. (2003, Summer 2003). Use of theBalance Scorecard in Health Care. Journal of Health Care Finance, pp. 1-16.


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Questions?Questions?

Balanced ScorecardBaldwin Lab Services

Measures Freq Target Units jan feb mar apr may jun jul aug sep oct nov dec

Patient Wait time M 80 % 85 85 86 80 82 69 86 71 61 74 69 79

0-3 Pediatric success rate M 90 % 93.44 92.80 89.93 94.68 94.12 94.07 93.48 89.21 93.46 89.91 84.88 90.09

4-12 Pediatric success rate M 95 % 94.44 95.89 95.65 98.59 97.87 98.77 98.65 97.09 95.00 98.00 90.63 98.67

Adult Patient Satisfaction Survey - Overall Q % 94.79 97.44 95.63 99.39

Adults patient satisfaction survey - Wait Time Q % 95.8 94.9 95.0 100.0

Adults patient satisfaction survey - Discomfort Q % 89.6 94.9 92.5 97.6

Adults patient satisfaction survey - Courteous Treatment Q % 95.8 100.0 97.5 100.0

Adults patient satisfaction survey - Physical Environment Q % 97.9 100.0 97.5 100.0

Pediatric Patient Satisf action Survey - Overall Q % 100.0 100.0 100.0 100.0

Pediatric patient satisfaction survey -

Courteous & Professionalism Q % 100.0 100.0 100.0 100.0

Pediatric patient satisfaction survey -

Treated in Positive MannerQ % 100 100 100 100

Cost of redraws M $ 458.64$ 240.24$ 305.76$ 414.96$ 414.96$ 338.52$ 273.00$ 338.52$ 294.84$ 262.08$ 382.20$ #####

Inventory w aste (tubes) M # 93 140 318 118 251 23 13 21 181 24 103

Inventory Turnover Rate (TURNS) M >13 24. 8 2 3. 5 2 2. 8 22. 9 23. 1 3 4. 3 35. 1 36. 8 36. 6 36. 8 36. 9

Hand Hygiene M 100 % 100 100 100 100 100 100 95 98 98 100 100

Number of Needle Related Injuries M 0 % 0 0 0 0 0 0 0 0 0 0 0 0

Redraws per 1000 Collections M

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Using a Balanced Scorecard t