THE USE OF BALANCED SCORECARD IN London Hospital HOSPITAL

The Use of Balanced Scorecard in a London London Hospital Hospital

Abstract

This paper presents a holistic study on the implementation of balanced scorecard approach in London Hospital hospital setting. The Performance Assessment Framework with regard to BSC implementation is also discussed in this paper. The first chapter provides introduction to the topic, followed by the literature review in the second chapter. The methodology section is covered in chapter three, and the findings and results are presented in chapter four. The paper concludes with the fifth chapter.



Table of Contents

ABSTRACT1

ABSTRACT2

CHAPTER I: INTRODUCTION4

Background of Organisation4

Problem Statement4

Purpose of Study5

Significance of the Study5

Introduction5

CHAPTER 2: LITERATURE REVIEW9

The balanced scorecard and its criticisms11

Criticisms of the balanced scorecard11

The London Hospital performance assessment framework16

CHAPTER 3: METHODOLOGY28

Background to the study and methodology28

CHAPTER 4: FINDINGS, ANALYSIS AND DISCUSSION35

Limitations of soft information36

CHAPTER 5: CONCLUSION39

Implications for performance assessment in the London Hospital39

Concluding discussions54

REFERENCES56

CHAPTER I: INTRODUCTION

Background of Organisation

Universal health care has been a cornerstone of Canada's social policy. Its citizens have come to expect world class service in this area and the government has provided generous funding support in the past. The funding environment, however, has changed since the 1990s. The federal and provincial governments not only cut back on funding but also demand greater accountability from the healthcare operators. In addition, skyrocketing healthcare costs have made it more difficult for healthcare operators to maintain the first class service expected by the public. As a response to the changing operating environment, healthcare administrators have begun to implement modern management tools in their organizations to solve their financial problems while sustaining world class service.

Business process reengineering (Ho, Chan, and Kidwell, 1999) and continuous quality improvement (Chan and Ho, 1997) are some management tools that have been implemented in American and Canadian hospitals, with varying degrees of success. Balanced scorecard, 2 a performance measurement and strategic management system, is one of the new tools adopted by management in hospitals. However, there has been little systematic evaluation on the use of balanced scorecard in health care. As a first step in filling this gap, this study assesses the extent of balanced scorecard initiatives in Canadian hospitals. It examines the hospital executives' perception on balanced scorecard, identifies factors that drive hospital management to undertake a balanced scorecard initiative, and attempts to find out why some balanced scorecard programs fail. Finally, the potential involvement of some Canadian hospitals with balanced scorecard in the future is reported.

The rise of the new public management has led to an increased emphasis on the use of formal performance measurement in most areas of the public sector. Performance schemes may be aimed at providing a degree of control or accountability for external stake-holders (such as the government or the public) or for purposes of internal management control. In many sectors an agency relationship has been introduced into the organisation of public services and the arms-length relationship between the purchaser and provider is serviced by the provision of performance ...