Academic journal article Canadian Journal of Administrative Sciences

An Analytic Hierarchy Framework for Evaluating Balanced Scorecards of Healthcare Organizations

Academic journal article Canadian Journal of Administrative Sciences

An Analytic Hierarchy Framework for Evaluating Balanced Scorecards of Healthcare Organizations

Article excerpt

Abstract

Healthcare organizations have been operating in a turbulent environment for years. Pressures from the government and competition as well as escalating costs have driven administrators to search for effective management tools. Balanced scorecard (BSC), a strategic management system, has been implemented in business organizations with success and is gaining acceptance in the not-for-profit and healthcare sectors. Despite potential benefits, there are challenges for implementers of BSC such as judgment biases, information overload, and the synthesis of information. This paper proposes to apply the analytic hierarchy process (AHP) to hospital scorecards in performance assessment. Although AHP could be a time-consuming exercise, it allows participative input in determining a comprehensive measure for comparing performance of healthcare organizations.

JEL classifications: M41, M49

Keywords: hospital scorecard, analytic hierarchy process

Résumé

Depuis des années, les organisations de soins de santé évoluent dans un environnement difficile. Les pressions gouvernementales, la concurrence et l'envolée des coûts poussent les administrateurs à rechercher des outils de gestion plus efficaces. C'est dans ce cadre que le Tableau de bord équilibré (BSC) a été mis en oeuvre. Malgré ses avantages potentiels, le BSC bute sur certains problèmes dont la partialité des jugements, l'excès, et la synthèse des informations. Cette étude applique la méthode de la hiérarchie multicritère aux tableaux de bords des hôpitaux dans la gestion de la performance. Même si l'application de cette méthode peut s'avérer chronophage, elle permet de déterminer une mesure d'ensemble pour la comparaison de la performance des organisations de soins de santé.

Mots-clés : tableaux de bords des hôpitaux, méthode de la hiérarchie multicritère

Administrators of healthcare organizations in Canada continuously face the challenge of escalating healthcare costs as well as increased pressure from the public and governments to control costs while maintaining quality of care. Although the healthcare system is publicly funded in Canada, in recent years both the federal and provincial governments have reduced their funding to healthcare organizations and mandated the mergers of healthcare organizations through restructuring initiatives. To cope with the astronomical increase in healthcare costs, some provincial governments are evaluating the alternative of a two-tiered healthcare system: the current publicly funded system alongside private for-profit organizations providing healthcare services. This uncertainty of funding creates turbulence for the operating environment as Canadian healthcare organizations not only have to deal with the increasing pressure from the government to manage efficiently and effectively, but also operate in a market with increasing competition from for-profit healthcare providers.

Pressures like these are not new to companies in the for-profit sectors, especially in the last decade of increased global competition. Many companies have been successful in responding to the increasingly competitive environment by undergoing fundamental changes in their ways of doing business. A team-based process-oriented management approach, where the customer is the first and foremost priority, and which views the entire organization holistically rather than as a number of disjointed business units (Hammer and Champy, 1993), has evolved. Given the magnitude of the organizational changes, there is a need for performance measures to gauge progress towards organizational goals, to provide feedback on efforts for continuing improvement, and to guide the transformation through successive stages. Many business organizations have found the balanced scorecard to be a valuable tool in performance and strategic management (Maisel, 1992; Hoffecker and Goldenberg, 1994; Kaplan, 1994; Kaplan and Norton, 1996a; 1996b; 1996c; 2001c; Fonville and Carr, 2001; Gumbus and Lyron, 2002). …

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