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The balanced scorecard and its natural subset, the dashboard, can help keep you focused on the critical areas that affect your hospital's overall performance.
During the past 25 years, there has been an explosion in the application of IT to financial reporting. Financial data are collected, analyzed, and distributed to decision makers in a more accurate and timely manner and in greater quantity than ever before. However, whether the technology has had a positive impact upon performance is another question. Although important strides have been made in the technology of information collection and distribution, significant improvements in the decision-making value of that information have not been realized.
What accounts for the failure to take advantage of IT advances to improve financial decision making? The answer is one that most executives would readily acknowledge: Relevant information is often missing among all the data. As a result, technology often simply delivers irrelevant or inappropriate data more quickly. Bad data are not likely to improve performance in either the short or the long term, no matter how quickly they are delivered.
The concept of "balanced scorecards," developed by Robert Kaplan and David Norton, represents an attempt to enhance the value of information and to exploit the capability of IT to deliver true value to decision makers. In their stripped-down version, balanced scorecards simply state that reporting should be available on those key attributes that really affect performance. Data are of little value if they do not provide information that can be used to improve the organization's performance. "Dashboard" reporting is a natural subset of balanced scorecards and is being increasingly used in almost all sectors of the economy to keep managers focused on critical areas that affect overall performance of the organization.
What Is Required to Develop an Effective Dashboard for Hospitals?
To develop a dashboard reporting system for key healthcare executives and board members, four critical questions should be answered:
* What is most important to the organization's success?
* What are the critical drivers that influence performance attainment?
* What are the most relevant measures that reflect critical driver relationships?
* What relevant benchmarking data are available to assess performance?
What is most important to the organization's success? Overall financial health is probably most important...