2003 18 June
Seugi 21_vienna 2003
Closing the loop with the Balanced Scorecard
in a Swiss hospitalPaul Flückiger, Director
2003 18 June
Overview Kantonsspital Obwalden
� County Hospital of the Canton Obwalden with 100 beds� Basic medical and emergency treatment :
� Internal Medicine and Geriatrics (including Rehabilitation)� Surgery� Gynaecology and Midwifery� Psychiatrics (for Obwalden and Nidwalden)
� About 340 employees� Financing via lump-sum subsidy (CHF 15.3 Mio. ~ � 10.5 Mio.)� Revenue of about CHF 35 Mio. (~ � 24 Mio.)
2003 18 June
Healthcare in Switzerland
� Federally organised, therefore hard to plan � With a share of 10.7% of GDP in the year 2000, Switzerland
has the second most expensive healthcare system after the US
� Cost Increase > Inflation� No sustainable approaches for a solution in sight
2003 18 June
Healthcare in Switzerland
� Hospital cost have the largest share of the healthcare budget � Expectations of patients are high and increasing - these act
as cost drivers � At the same time there are only limited financial resources � Considering all of this, the hospitals are challenged to gain
an optimum out of existing resources
2003 18 June
Process-oriented Management
� Three separate management processes � the hospital management consists of people looking after their own interests
� No CEO looking after the interests of the business as a whole � Effect : Management itself becomes a cost driver � At the �Kantonsspital Obwalden� we try to address this
problem with three approaches
2003 18 June
Process-oriented Management
First Approach : Process Organisation
� The structure of the �Kantonsspital Obwalden� follows the types of processes : Business Processes, Centres of Competence, and Support Processes
� These business units have been given a high degree of independence and far reaching authorities
� The hospital management team focuses on improving the processes and on addressing current and future strategic issues
2003 18 June
Process-oriented Management
Second Approach : Continuous Development following EFQM
� Employee development and empowerment
� Continuous learning � Building up relationships
with partners � Accountability in the
eyes of the public
� Result oriented � Customer oriented � Leadership and
consistency in the pursuit of objectives
� Managing with processes and facts
2003 18 June
Process-oriented ManagementThird Instrument : Managing with the Balanced Scorecard
1 Formulating a strategy
Deriving objectives and strategic initiatives
Strategic BSC reporting, alignment of the whole reporting framework
Strategic and operational actions
Comparison of Actual vs. Planned figures, analysis of deviation
Strategic learning : Test hypotheses (cause-and-effect), regular review of the Balanced Scorecard
1
Operational Control Loop
Balanced Scorecard
Daily Business
� Objectives� Initiatives� Indicators / Targets
33
66
44
22
55
11 Strategy22
Strategic Control Loop 33
44
55
66
2003 18 June
Managing with the Balanced Scorecard : Reason for working with SAS
� Clear from the beginning that we wanted to give the process leaders a feedback instrument
� Therefore wanted a management cockpit on the intranet with relevant information for each process management team
� Main source system for the indicators is old and not really documented
� SAS Strategic Performance Management : had necessary capabilities, very flexible and easy-to-use
� SAS was able to control the whole process of the development and deployment with a proven methodology
� SAS has helped us to enhance our Balanced Scorecard cockpit to enable further analysis
2003 18 June
Managing with the Balanced Scorecard : Development of the management system
Development of business framework
Technical Implemen-tation
Assess Technical Framework
Assess Strategic Direction Hospital
Go-Decision / Kick off
Publish on Intranet
Integrate in SAS, Access operational Syst.
Strat.Objectives, Strategy Map, Indicators Depts.
Publish on Intranet
Strat.Objectives, Strategy Map, Indicators Hosp.
Enter Data in SAS
Integrate in SAS
Target setting and Actions
Automated data feed
Completion Phase I
July 2002 November 2002
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2003 18 June
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Results
� Patient satisfaction survey:� End of year 2000 - last quartile� End of year 2002 - first quartile
� Lump sum credit not completely used for the first time in 2002
� Personnel usage in line with volumes� Low staff turnover, high employee satisfaction � Middle Management develops entrepreneurial spirit � High degree of flexibility in processes and increased
dynamic in the whole company
2003 18 June
Thank you for your attention!