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

2003 18 June

2003 18 June

2003 18 June

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!