KPI framework and strategic management

The transformation needed in healthcare can be overwhelming and necessitate substantial investments in finance, technology, human capital, operations, and infrastructure, significant disinvestment of legacy resources, redesign of workflows and pathways, and enhancement of collaboration across the system. This pivot will entail transforming the workforce, physical infrastructure, and technologies that support and drive patient care.

Interestingly, every transformation programme wants to deliver safe, consistently good, financially sustainable health care. Still, no one has been able to do it thoroughly. One of the issues at the centre of this problem is the lack of a KPI framework-based Strategic Management System. 

In 1992, Robert Kaplan and David Norton identified a severe deficiency in management systems: the inability to link short-term activities with long-term objectives. Four new management processes, separately and in combination, contributed to linking long-term strategic goals with short-term activities. The concept of a balanced scorecard was introduced.

1. Provide top-down reflection of vision and strategy and express an integrated set of objectives and measures.
2. Managers must communicate the strategy up and down their areas of responsibility and align goals, individual objectives, and measures with it.
3. Plan resources and prioritise activities to deliver long-term strategic objectives.
4. Create a dynamic and agile organisation, learning from all stakeholders and breaking processes.
5. Modify strategy to reflect real-time learning

The Provider KPIs

The objectives and KPIs vary from organisation to organisation and, as stated above, are driven by organisational strategy. Some of the frequently used KPIs that can be fed into the scorecard to assess the quality and performance of a healthcare provider are shown below. The agreed goals and objectives must be measurable. As Peter Drucker frequently said, “You Can’t Measure It, You Can’t Improve It.”

Patients: Wait time, staff-to-patient ratio, percentage of cancelled appointments, admission rate, occupancy rate, average length of stay, number of beds, discharge process time, equipment utilisation rate, number of new patients, number of insured patients, response time for patient transport service, average minutes per surgery, operating room turnaround time, medication errors, patient care hours, patient vs. staff ratio, post-procedural death rate, patient follow up, hospital-acquired conditions, unexpected return to surgery, average lab test time, Emergency: arrival to bed, nurse, physician and discharge, code response time, patients left without being seen

Internal business processes: Patient satisfaction, complaints, inpatient satisfaction with a physician, outpatient satisfaction with a physician, percentage of patients that found paperwork to be “clearly written & straightforward”, percentage of medical documents translated, employee turnover, referrals, patient confidentiality, obesity outreach campaigns, number of facts sheets developed, website hits, number of press releases released, media mentions, assets downtime

Financial perspective: Claims denial rate, third-party revenue, medicine cost, equipment maintenance costs, indirect expenses, percentage of patients without insurance, staff overtime, vacancy rates, energy usage, assets utilisations, return on assets and capital employed, operating leverage, financial leverage, accounts receivable days, accounts payable days, earnings before interest, tax, depreciation and amortisation, percentage split among insured (corporate and others), self-pay (local and foreign), government (local and foreign), cost margins especially staff and supplies, price growths (different customer segments)

Learning and Growth: The number of staff who participated in internal training, the number of training sessions per department, the number of employees who find internal training helpful, the number of educational programs, and the number of education resources.