The Balance Scorecard implementation in the Italian Healthcare System: some evidences from literature and a case study analysis

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(1)Article. The Balance Scorecard Implementation in the Italian Health Care System: Some Evidences from Literature and a Case Study Analysis. Journal of Health Management 17(1) 25–41 © 2015 Indian Institute of Health Management Research SAGE Publications sagepub.in/home.nav DOI: 10.1177/0972063414560868 http://jhm.sagepub.com. SE. Laura Broccardo1. FO. R. C. O. M. M. ER. C. IA L. U. Abstract In the last few years, in the healthcare organizations, it has become crucial not only to manage the costs, but also to understand the relationship between quality and cost. Indeed, a variety of stakeholder groups are putting increasing pressure on providers for measured performance; they are demanding data on quality and patient satisfaction, although simultaneously pressing for lower costs (Griffith and King 2000). It is clear how the balanced scorecard is (BSC) important to manage, strategically, the quality and the costs in the health care system, but it is also important to underline that this tool has to be adapted to these kinds of organizations among its classical use. Consequently, the main goals of this article are: (a) to make a complete literature review of the papers with case studies published on the topic of BSC in Italian health care system during the period 1992–2012, using international databases to understand the use of this strategic management tool; and (b) to conduct an empirical analysis based on an Italian hospital case study, with particular attention to the BSC adoption, to understand the connected issues of the use of this tool. By this analysis, it emerges that there is a gap in the literature of empirical case studies, so the case study analyzed contributes to fill this gap. Further research can include the comparison of the Italian situation with other foreign countries.. N. O. T. Keywords BSC, performance, hospital, management, health. Introduction During the last few years, it has become essential in health care organizations to manage the costs, but it is even more relevant to understand the relationship between quality and cost. To monitor these variables, the health care system needs an advanced tool like the balanced scorecard (BSC) that is particularly appropriate for organizations in turbulent industries such as health care. Its application in this sector has been 1. Assistant Professor, Department of Management, Università Degli Studi Di Torino, Italy.. Corresponding author: Laura Broccardo, Ricercatore Universitario, Dipartimento di Management, Università Degli Studi Di Torino, Italy. E-mail: laura.broccardo@unito.it.

(2) 26 . Journal of Health Management 17(1). SE. slower than most industries. Competition among health care providers is growing, quality of care is facing increasing scrutiny and economic issues have become decisive in the allocation of medical care. Consequently, this research aims to analyze the BSC implementation in Italian health care system through the published case studies, analyzing the present situation as well as the evolution in research in this field during the last 20 years. Also, this study will try to connect theoretical point of view related to BSC and empirical experiences in hospitals which tried to implement this strategic management tool to underline how this tool is useful to overcome the crisis. This article is organized as follows. First, it analyzes the theoretical background about the BSC in health care, with particular attention to how and why to apply this tool. Second, the research method is outlined, as well as the findings. Finally, some managerial evidences are drawn as conclusions.. U. Theoretical Framework: The Use of BSC in Health Care. O. T. FO. R. C. O. M. M. ER. C. IA L. Kaplan and Norton (1992), with their earliest works, advocated a performance measurement system which would provide ‘a set of measures that gives top managers a fast but comprehensive view of the business’. Four perspectives—financial, customer, internal business process and learning and growth— are central to the BSC measurement system and they are linked in a cause-and-effect relationship. More recent contributions to strategic management accounting have emphasized the role of management accounting in formulating and supporting the overall competitive strategy of an organization (Drury and Al-Omiri 2007). Attention is now being given to develop an integrated framework of performance measurement that can be used to clarify, communicate and manage strategy implementation (Drury and Al-Omiri 2007). This strategic management tool is the BSC. Economic and financial aspects are not sufficient to manage any organization, especially complex organizations like the hospitals; so, the traditional accounting tools are inadequate. The BSC promises to link financial and non-financial measures to strategy (Kaplan and Norton 1996). Some studies on this topic—the BSC in health care—show how the BSC has been a prominent innovation in strategic performance measurement systems and the health care sector has recently started to adopt this approach.. N. The Balanced Scorecard Tool In the Harvard Business Review (January–February 1992), a professor of the Harvard University, Robert S. Kaplan, and a business consultant of Boston, David P. Norton, published an article, designated ‘The Balanced Scorecard’, that concretized the previous works of the Professor Kaplan on the measure of the performance of the organizations. The first work of Robert Kaplan developed the BSC as a group of indicators that ranged all the parameters that could measure the success of a company, designed in common with the managers of his management. By the next developments, it could be deduced that this tool did not only act like a tool of supervision but also had a strong motivation effect for the achievement of goals by means of the set up of indicators’ elements. The BCS is a strategic tool and it can be used to define, with particular accuracy, the goals that drive the organizations survival and development. It is not in the business strategy definition where it is possible to find the main number of business failures, but in the deficient execution of the strategy scheduled. The BSC is not a new tool; it simply signals an organized way to carry out what we already know we have to do..

(3) 27. Broccardo. At the end, to integrate each point of view by which it can contemplate the management of a company, the BSC adopts, in principle, four fundamental perspectives: (a) financial perspective; (b) customer perspective; (c) internal process perspective; and (d) learning and growth perspective. The financial perspective has been the one which traditionally developed the BSC used until now for the company supervision to the highest level. The corresponding perspectives of the client and learning have been developed more recently, and usually are not integrated in the highest direction strategies.. R. C. O. M. M. ER. C. IA L. U. SE. 1. Regarding the financial perspective: The financial performance measures underline if the strategy of a company that it has put into practice and execution is contributing to obtaining better results. Some examples of financial goals in a hospital are: cost by patient, cost by diagnosis-related groups (GRD), etc. 2. Regarding the customer perspective: This perspective identifies the segments of clients in which the unity of business will compete. Some examples of indicators inside this perspective are patient satisfaction, the number of claims, the number of interposed demands, if we refer to clients, and positive news in press, for example, if we refer to society. 3. The internal process perspective: In this perspective, we identify the critical internal processes in which the organization has to be excellent. The measures of the internal processes concentrate on those processes that will have the main impact on client satisfaction and in the achievement of the financial aims of the organization. Some examples are: waiting lists; index of occupation and stay; and any indicator of quality and clinical processes. 4. The learning and growth perspective: The people with skills, knowledge and attitudes are the base on which any business organization runs and therefore, workers’ motivation and satisfaction is important. This is the most important aspect to consider while analyzing this perspective. The examples of measures based on the employees include a mix of generic result indicators like satisfaction, training and development, the field and skills of the employees, absenteeism and hours of training by worker.. N. O. T. FO. Following Urrutia de Hoyos (2003), the election of the perspectives obeys the following logic: the indicators of the learning perspective explain how the organization will generate value in the future; the processes and clients ones explain how to generate value in the present; and the financial ones explains how the value was generated in the past. This concept links with the results of some works (Voelker et al. 2001) which underline that the traditional systems to evaluate the operation are concentrated especially in financial measures that, in a lot of cases, hinder the growth and the success of the organization. Besides this, the BSC contains a series of indicators, which reflect the organization strategy and allow evaluating the strategy when this one is put into practice. It is useful to take some concepts coming mainly from the field of the strategic planning, aiming to reinforce this tool and trying to transform the theory into practice, in a more simple way. Consequently, it is necessary to select those indicators necessary and sufficient in each perspective to guarantee an integral analysis of the company. It is a fact that the hospitals, as other companies of services, for long, have developed their activity in a stable, non-competitive, very regulated and protected environment, with little freedom to access new businesses or fix prices to their services. However, the current trend in the sanitary field is scored by initiatives oriented to decentralize and to give more management autonomy, and all this needs to have new capacities to obtain success in a competitive market. The companies have to be conscious of the relative importance of their assets in their performances, and recognize that it is fundamentally the intangible assets, that make a difference in a market of competition (Santos Cebrián and Fidalgo Cerviño 2004)..

(4) 28 . Journal of Health Management 17(1). Besides the reality that the management of the intangibles results is very important for the success of the organizations, whether profit or not-for-profit organizations, very few companies make such an intensive use of knowledge—intangible asset by excellence—as the hospitals. Due to these reasons, and taking into account the limitations that are imposed on a regulated market like the sanitary, it could be interesting to investigate the current situation of the research in this field.. Why to Use the BSC in Health Care. R. C. O. M. M. ER. C. IA L. U. SE. As mentioned earlier, in the last few years it has become essential in the health care organizations, to manage the costs, as well as try to understand the relationship between quality and cost. The managers play an even larger role in strategic and operational decision making. The strategic duties may include: determining which equipment investments are justified; analyzing merger opportunities; examining outsourcing opportunities; and helping to determine appropriate sourcing strategies. The operational duties may include: helping operating managers to understand the financial impact of their daily decisions; supporting process improvement initiatives; identifying which activities add value by enhancing service to customer and which do not; and providing both financial and non-financial performance indicators (Pineno 2002). In the United States (US), the measurement of the quality and its relationship to cost became a central issue to help payers and insured population make informed choices. The quality is tied to clinical outcomes, functional outcome, patient satisfaction and financial outcomes. The BSC captures this dynamic complexity and facilitates the development of a systems-oriented approach to management (Voelkeret al. 2001). A variety of stakeholder groups are putting increasing pressure on providers for measured performance; they are demanding data on quality and patient satisfaction, although simultaneously pressing for lower costs (Griffith and King 2000). The BSC can be useful:. N. O. T. FO. 1. to inform patients, employers, government agencies about the quality of the service delivered (value is quality divided by cost); 2. to permit organizations and practitioners to market their services by publishing their results, which permits informed patients, employers and payers to make choices based on provider’s capability and competency to meet their needs; and 3. to combine sets of indicators, linking them in a chain of events and leading the organization in the desired direction (Santiago 1999). The introduction of the BSC provides the following potential benefits to health care organizations: 1. 2. 3. 4. 5.. it aligns the organization around a more market-oriented, customer-focused strategy; it facilitates, monitors and assesses the implementation of the strategy; it provides a communication and collaboration mechanism; it assigns accountability for performance at all levels of organization; and it provides continual feedback on the strategy and promotes adjustments to marketplace and regulatory changes (Inamdar, Kaplan and Bower 2002).. A study conducted by Inamdar et al. (2002) identifies how the BSC can become a valuable tool for health care executives in their difficult challenge of managing their organizations in a highly complex and uncertain environment, and they provide some guidelines for the successful application of the BSC:.

(5) 29. Broccardo. 1. Evaluate the organization’s ability and readiness to apply the BSC, including hands-on executive leadership with deep content expertise, focus on consumerism and resources like time, skill set and information system. 2. Manage the BSC development (in all phases like introduce and educate and build consensus and focus) and implementation processes (in all phases like introduce and educate and communicate to the workforce). 3. Manage the learning before, during and in later stages of the implementation process. 4. Expect and support role changes among different constituents. 5. Take a system approach.. SE. How to Apply the BSC in Health Care Organizations. C. O. M. M. ER. C. IA L. U. It is clear how the BSC is central to manage, strategically, the quality and the costs in the health care system. However, it is also important to underline that this tool has to be adapted to these kinds of organizations. In fact, in these organizations, the customer perspective is placed at the highest level, even as in not-for-profit organizations, a financial condition is a prerequisite for long-term viability (Voelker et al. 2001). Kaplan and Norton assert that their formulation of the BSC should be modified for every organization to fit better the strategy. In a study of the BSC for the Ontario Acute Care Hospitals, Pink, McKillop, Schraa, Preyra, Montgomery and Baker (2001) identified the perspectives used in this hospital, among the classical ones identified by Kaplan and Norton, as given in Table 1. In an article, Zelman, Pink and Mattrhias (2003) underline some examples of additional BSC or modifications used by health care organizations:. N. O. T. FO. R. 1. ‘development and community focus’, ‘human resources’, ‘quality of care and services’ in Ebenezer, Long-Term Care Industry; 2. ‘mutual respect and diversity’, ‘social commitment’ in Mayo Clinic; 3. ‘outcomes’ in Carondelet Health Network; 4. ‘customer perspective’ shifted to top of scorecard in Yale University School of Medicine; and 5. revision of domain question in Academic Medical Centers. Consequently, the BSC tool is available in these kinds of organizations with the adaptations suggested by Kaplan and Norton, giving some advantages like helping organizations guide implementation of strategic planning, reporting on critical outcomes and offering a report card for payers and consumers to make informed choices (Zelman et al. 2003). Table 1. BSC Perspectives Used in Hospital Report 1999: A BSC for Ontario Acute Care Hospitals The Four BSC Perspectives of Kaplan and Norton. As Adapted for Use in a Publicly Funded Health Service Setting. Financial Customer Innovation and learning Internal Business Processes. Financial performance and condition Patient satisfaction System integration and change Clinical utilization and outcomes. Source: Pink et al. (2001)..

(6) 30 . Journal of Health Management 17(1). Research Methodology and Research Question. SE. The research of the published papers with case studies about the BSC in the Italian health care system was conducted through Google Scholar, Ebsco Host and Science Direct for the international papers and ESSPER for Italian papers. The goal was to identify as many applications of the BSC as possible in the health sector and consequently, the articles, including theoretical studies, without case studies analysis were not considered. The keywords as illustrated in Table 2, used for searching were: balanced scorecard, hospital, health and health care. The period considered starts in 1992, when the BSC was devised by Kaplan and Norton in their first publication (Kaplan and Norton 1992), and finishes in December 2012. This study tries to answer to the following three main questions:1. IA L. U. 1. Which are the perspectives used? 2. Which are the indicators used? 3. Which generation of the BSC is used?. N. O. T. FO. R. C. O. M. M. ER. C. However, the main aim of this work, corresponding to the methodology proposed by Gao and Gurd (2006), is reviewing all the articles taking into account the above-mentioned three questions. The first is: ‘Which are the perspectives used?’ It is an important question when you work in the BSC field to see how many and which perspectives are incorporated. The centre of attention of BSC in health institutions would have to be the health of the patient, which, no doubt, is the central axis on which this tool is configured, though not always like this. A review of the perspectives incorporated will give us a more next vision of the importance that really is given to the patient. The second question is: ‘Which are the indicators used?’ Most of the public health organizations use a big quantity of indicators; thus, the aim of implanting the BSC is to identify those indicators that are more critical for implementing and controlling the strategy. Following Marr and Adams (2004), the less explored perspective is ‘learning and growth’ because it incorporates intangible assets that are difficult to control and quantify. Some studies like Speckbacher, Bischof and Pfeiffer (2003) have even arrived to the conclusion that 30 per cent of the BSCs analyzed in the study do not incorporate the perspective of ‘learning and growth’. We have to take into account that from a practical point of view, questions like the climate of work and organizational culture; the knowledge and competition of the workers; and the technologies and the systems of management control that evaluate what happens in a hospital cannot be taken into account in their adequate dimensions in the BSC.. Table 2. Details about Research Methodology: Italian Papers International Search. Italian Search. Databases. Google scholar + Ebsco Host + Science Direct. Italian database: ESSPER. Keywords. Balanced scorecard (English) + Italy/Italian Healthcare/Hospital. Balanced scorecard + sanità ospedali. Period. From 1992 until 2012. Source: Author’s elaboration..

(7) 31. Broccardo. IA L. U. SE. The third question is: ‘Which generation of the BSC is used?’ We have at least three different stages in the evolution of the BSC. All the authors agree that the first generation combines financial and nofinancial indicators with the four classical perspectives (financial, customer, internal processes and learning and growth). This first stage does not incorporate indicators’ cause–effect. The second generation, however, concentrates in the relation of cause–effect between indicators and strategic objectives. In this second stage, we have a tool of strategic management that often uses strategic maps to illustrate the relation between indicators and strategy (Lawrie and Cobbold 2004; Speckbacher, Bischof and Pfeiffer, 2003). Following Speckbacher, Bischof and Pfeiffer (2003), the third generation is characterized by developing systems of strategic control that contain plans of action and are joined to incentives. These authors consider that the BSC, when you find it in this stage of development, does not serve only to describe the strategy of the company using the relation cause–effect, but it has to be used to implement the strategy because the communication is not sufficient to change the behaviour of the organization.. Findings. ER. C. The BSC in Italian Health Care System: Literature Review. M. M. As a result of this research, 12 published papers were found in different journals. These journals have two clearly differentiated areas: one from medicine and the other from economy area (see Table 3). In Table 4, the following is underlined (for each paper found):. FO. R. C. O. 1. the health care organization analyzed; 2. the considered perspectives (in top-down order); and 3. the number of indicators for each perspectives used to monitor the results.. O. T. Table 3. Publication Areas of Journals. N. Papers from Italian medical area. No. of Papers. Impact Factor (Indicated on the Review Web Page). 4. Mondo Sanitario. 2. –. Politiche Sanitarie. 1. –. Scenario. 1. –. Paper from Italian economy area. 6. Amministrazione & Finanza—Pianificazione e Controllo. 1. –. Economia Aziendale Online—International Business Review. 1. –. Mecosan. 4. –. Papers from international review. 2. Cost Effectiveness and Resource Allocation. 1. 0,87. The Health Care Manager. 1. 1,875. Total number of papers. 12. –. Source: Author’s elaboration..

(8) Regional Public Health System in Campania. Umbria Region— ASL 2. ASL 1 Torino. 2. 3. 4. O. 14. 6. No indicators. User/Patient Perspective Growth and Learning Perspective. No indicators. Internal Processes Perspective No indicators. No indicators. 7. SE. U. 2009. 2009. Publication Year. Fioretti, 2009 Paradisi, Pifferi, Messeri. Impagliazzo, Ippolito, Zoccoli. Verzola, Bentivegna, Carandina, Trevisani, Gregorio, Mandini. Authors. 2009 Esercizio di misurazione Fanì, Ferro, Garramone, delle performance in Arras, Orecchia un servizio sanitario territoriale. IA L. C. Applicazione della balanced scorecard nei dipartimenti dell’Asl 2 dell’Umbria. The BSC as a Strategic Management Tool. ER. M. M. O. C. Economic and Financial Perspective. Growth and Learning Perspective. Internal Processes Perspective 7. 3. 3. Growth and Learning Perspective. User/Patient Perspective. 2. Internal Business Processes Perspective. 13. 4. Financial Perspective. Economic and Financial Perspective. 29. R. 3. FO. Customer Perspective. Growth and Learning Perspective. Multidimensional Evaluation of Performance: Experimental Application of the BSC in Ferrara University Hospital. Number of Indicators Title. Financial Resource Perspective 5. Internal Procedure Perspective. T. Community Perspective. Ferrara University Hospital. 1. N. Perspectives. Number (Chronological Order) Hospital. Table 4. The BSC in Italian Health Care System. Politiche Sanitarie. Mondo Sanitario. The Health Care Manager. Cost Effectiveness and Resource Allocation. Paper/Journal.

(9) Ausl Bologna Nord. No indicators. Growth and Learning Perspective. No indicators. Internal Processes Perspective No indicators. No indicators. No indicators. Innovation and Professional Development Stakeholder Perspective. No indicators. Internal Processes. Financial Perspective. No indicators. Stakeholders. IA L. Balanced Sorecard e aziende sanitarie. 2009. 2006. Frittoli, Mancini 2004. Ferrari, Merlini 2006. Perotti. 2007 Barichello, Impiumi, Orlandin, Paiola, Piccinini. Zucconi. SE. U. Vincere la sfida della governance: L’introduzione della Balnced Scorecard all’Asl di Pavia. C. Implementare la Balanced Scorecard in una organizzazione sanitaria. ER. M. 9. No indicators. 6. Economic and Financial Perspective Results. 7. Environment Relations Perspective. M. Pavia ASL. 10. Growth and Learning Perspective. O. 8. R. 9. Internal Processes Perspective 13. User/Patient Perspective. C. ASL 12 Biella. 4. Balanced scorecard in sanità: La realizzazione di mappe strategiche. 7. 6. Know-how. FO. 2. Internal process. T. O. Stakeholders. Veneto Region— ARSS (Agenzia Regionale Socio Sanitaria). 6. N. Only the strategy map Misurare e gestire le performance Only the strategy map assistenziali in Terapia Intensiva: il ruolo della Internal Processes Perspective Only the strategy map Balanced Scorecard Internal Processes Perspective Only the strategy map. IRCCS Economic and Financial Mondino di Perspective Pavia User/Patient Perspective. 5. (Table 4 Continued). Mecosan. Mecosan. Economia Aziendale Online— International Business Review. Mecosan. Scenario.

(10) T R. C. No indicators. No indicators. Source: Author’s elaboration.. Anonimous Internal Processes Perspective No indicators Hospital Customer Perspective No indicators. 12. No indicators. Customer Perspective. No indicators No indicators. Learning and Growth Perspective. No indicators. Financial Perspective. Learning Perspective. Internal Processes Perspective No indicators. No indicators. Financial Perspective. IA L. U. 2004. Publication Year. Colella, Coppa, 2006 Sanguigni. 2004 Vaiani, Zoia, Del Pero, Trevisan, Gioia, Carnaghi, Menegotto, Manzi. SE. BSC e controllo strategico: Implementazione in un’azienda ospedaliera. C. Balanced Scorecard (BSC): L’azienda ospedaliera verso la frontiera dell’appropriatezza. ER. M. M. O. No indicators. AO Busto Arsizio. Growth and Learning Perspective. Authors. L’impiego delle mappe Cuccurullo, Tommasetti strategiche nella Balanced Scorecard: Processo di costruzione ed effetti sistemici. Number of Indicators Title. FO. Internal Processes Perspective No indicators. ASL Naples Financial Perspective 3 External Perspective. Perspectives. O. N. 11. 10. Number (Chronological Order) Hospital. (Table 4 Continued). Amministrazione & Finanza. Mondo Sanitario. Mecosan. Paper/Journal.

(11) 35. Broccardo. User/patient perspective Financial perspective. C. Source: Author’s elaboration.. IA L. Figure 1. BSC Perspectives at the Top in the Italian Hospitals. U. SE. Internal processes perspective. ER. Some Evidences. C. O. M. M. Before analyzing the BSC implementation in the Italian hospitals, it is important to emphasize that only 12 papers are useful for this research and only five papers (42 per cent of the analyzed papers) point out the indicators necessary to monitor the key factors for a correct strategy implementation. Analyzing the papers including the case studies on the BSC implementation in Italian health care system, ‘about the perspectives’, it emerges (see Figure 1):. N. O. T. FO. R. 1. Four Italian hospitals (33 per cent) place the user/patient perspective at the top. 2. Seven Italian hospitals (59 per cent) place the financial perspective at the top. 3. One Italian hospital places (8 per cent of the analyzed papers) the internal processes perspective at the top. 4. In 11 hospitals, the four classical perspectives—users/patients, economic and financial performance, internal processes and growth and learning—even if sometimes they are differently named, are present; only in one hospital, the financial perspective is absent. 5. In 10 hospitals, the total number of perspectives is four, in one hospital three and in one hospital five. Consequently, it is possible to affirm in relation to the first question, ‘which are the perspectives used’, that in the greater part of the works, the four classical perspectives—users/patients, economic and financial performance, internal processes and growth and learning—are used, and it emerges that in Italian hospitals, the economic and financial perspective includes the main critical outcomes. ‘About the indicators’, it emerges, as summarized in Table 5 and represented in Figure 2 (only five articles point out the indicators): 1. The major part of indicators for three hospitals is present in the internal processes perspective; for one hospital, in the customer perspective; and for one hospital, in the financial perspective. 2. The major part of indicators is placed in the customer perspective..

(12) 36 . Journal of Health Management 17(1). Table 5. Number of Indicators in the Perspectives Ferrara University Hospital. Regional Public Health System in Campania. Umbria Region – Asl 2. Veneto Region – ARSS. Asl 12 Biella. Total. 5. 4. 13. –. 6. 28. Financial perspective Customer perspective. 6. 29. 3. 2. 9. 49. 14. 2. 7. 6. 13. 42. Environment relations perspective. –. –. –. –. 7. 7. Learning and growth perspective. 3. 3. 7. 4. 10. 27. Internal processes perspectives. SE. Source: Author’s elaboration.. U. 45. IA L. 40. C. 35. ER. 30. M. 25. M. 20. C. O. 15. Internal processes perspective Customer perspective Financial perspective. FO. 5. Ferrara Regional Umbria Veneto Region Asl University Public Region ARSS 12 Biella Hospital Health System Asl 2 in Campania. N. O. T. 0. Environment relation perspective. R. 10. Learning and growth perspective. Figure 2. Number of Indicators Source: Author’s elaboration.. Consequently, about the second question, ‘which are the indicators used’, it is possible to affirm that the number of indicators is more elevated in the non-economic and financial perspectives, even if less supported for the fewer articles. In fact, in the five analyzed hospitals, the highest number of indicators is present (in order) in the users/patients perspective, internal processes perspective, financial perspective and learning and growth perspective. It is possible to affirm that in the Italian health care system, the attention is on the customer (user/patient) perspective in terms of satisfaction and the internal processes in terms of quality and time, even if the financial perspective is at the top. About the third question, ‘which generation of the BSC is used’, it is possible to affirm that the BSC is used as a tool of control and not like a management tool to implement the strategy and consequently, in the Italian hospitals, the first generation is used..

(13) 37. Broccardo. In the end, it is possible to underline a slightly increasing trend of the number of Italian publications about the BSC implementation in the Italian hospitals. Besides, the greater part of the articles (83 per cent) is published in Italian reviews, and in particular, 40 per cent of these articles are published in reviews from the medicine field.. Empirical Analysis of an Italian Hospital. O. M. M. ER. C. development of measures to monitor and rationalize pharmaceutical expenditures; containment of hospitalization at high risk of inappropriateness; extension of hours of clinical service; reorganization of ambulatories; management of waiting lists; development of integration between Regional Sanitary Organization ; improvement of care continuity pathways; and new activities and development of existing activities.. C. 1. 2. 3. 4. 5. 6. 7. 8.. IA L. U. SE. From this research, a lack of empirical analysis of BSC implementation in hospitals emerges clearly. Consequently, this study also analyzed an Italian hospital which tried to implement the BSC logic. This hospital is the third in Italy for the complexity of the treated cases. The strategic plan of the analyzed hospital refers to the period 2008–12 and the strategic choices are influenced by the regional context. The main strategic goals for the period considered can be summarized as follows:. N. O. T. FO. R. In the analyzed hospital, there is a gap between the strategic plan and the BSC because the strategic map is not clearly formalized. The strategy map is a way to describe and communicate a strategy. The strategy map clarifies the strategic direction which the organization has taken, the goals that need to be achieved, the quantitative targets and the cause–effect relationship between the various resources. Although it consequently evolves into a system of indicators, the key concept of the map is that it allows the company to ‘narrate its strategy’ in a clear, simple and immediate way (Armitage and Scholey 2007). The indicator system acts as a control framework: the indicators must be specific and reflect the critical success factors highlighted in the map. Consequently, it is an important tool to strategically manage a firm. In Figure 3, the strategy map of the analyzed hospital is represented that was designed through the conducted interviews. It emerges that the number of perspectives used are three and at the top, there is the economic perspective, also if it is considered as a bond (Figure 3). In the considered case, after describing the strategy and identifying those factors that are critical to the success for this organization, it is necessary to identify the system of indicators which reflects the given strategy map. Thus, it is possible to: • verify if the key factors identified are correct for the implementation of the strategy; • manage the strategy by acting on the correct levers, and make the necessary changes accordingly; and • measure the strategy described..

(14) 38 . Journal of Health Management 17(1). Economic and financial perspective To respect the activities level. To preserve the activities value. U. SE. Cost restraint. C. ‘SDO’ Quality. Degree of staff presence. R. C. O. M. M. ER. Processes efficiency. IA L. Organizational and processes perspective. Complexity of the treated cases. To preserve the activities level. N. O. T. Appropriated use of the structure. FO. Appropriate and quality perspective. Figure 3. The Strategy Map in the Analyzed Hospital Source: Author’s elaboration based on interviews.. In Tables 6, 7 and 8, for each perspective, it were identified the critical key factor and the linked key performance indicator that allow to monitor and measure the critical factor for this hospital. Analyzing the indicators, the main concentration is on the economic perspective due to the fact that this perspective is a bond to respect. In the analyzed hospital, the BSC is used as a tool of control and not like a management tool to implement the strategy; consequently, first-generation BSC is used. This empirical case confirms some evidences described in the literature review, but more cases are needed to support the findings..

(15) 39. Broccardo Table 6. Economic and Financial Perspective Key Factor. Key Performance Indicator. Cost restraint. Health materials cost; blood material cost; drugs cost; personnel cost (all these costs were compared with the costs of the previous year).. To respect the activities level. Number of the different activities (comparison with the previous year).. To preserve the activities value. Revenues from the different activities (comparison with the previous year).. Source: Analyzed hospital data.. Table 7. Organizational and Processes Perspective Key Performance Indicator. Processes efficiency. Mean hospital stay, day hospital number.. ‘board of hospital discharge (SDO)’ quality. Abnormal ‘diagnosis-related groups (DRG)’ ratio, no specific diagnosis ratio.. IA L. U. SE. Key Factor. Degree of staff presence. Staff absence index, presence index.. ER. Table 8. Appropriateness and Quality Perspective. C. Source: Analyzed hospital data.. Key Performance Indicator. Appropriate use of the structure. No appropriate DRG percentage for each department.. Complexity of the treated cases. Average weight of hospital stay, average weight of day hospital.. To preserve the activities level. Number of the different activities (comparison with the previous year).. M. O. C R. Source: Analyzed hospital data.. M. Key Factor. FO. Limits. O. the analysis is conducted only on the Italian hospital cases; few articles found that included the indicators; some possible missed articles; and only one empirical case analyzed.. N. 1. 2. 3. 4.. T. This research has some limitations that can be summarized as follows:. The goal is to overcome these limitations in future studies, and also to compare the Italian situation with other countries.. Conclusion and Future Research The BSC is a tool that is able to describe, implement, manage and assess the predetermined strategy, allowing the organizations to evaluate correctly the outcomes, and it requires a much greater managerial effort. The BSC has a top-down rationale in that decisions taken at a strategic level determine what.

(16) 40 . Journal of Health Management 17(1). ER. C. IA L. U. SE. happens at lower levels and through this study, it emerges that in Italian hospitals, the economic and financial perspective includes the main critical outcomes that influence the other ones. Economic equilibrium is a necessary condition for a health care organization which wants to offer an efficacy service with compatible costs. Each hospital has some leeway—even if the political tariff is decided at central level—in choosing the path favouring a revenue increase. These appear as the main goals in the Italian hospitals as per the study of the cases in the literature. It is also clear that there is an important relation between learning and growth perspective, capability to influence the internal processes and the patient orientation, conditioned by financial resources. It emerges that the strategy in these organizations aims for financial–economic outcomes with particular attention to the quality, but the economic and financial results have to be a sustainability condition, not the main goal. Also, there are few international articles about this topic and a slightly increasing trend of the number of publications can be seen. About the perspectives, it is confirmed that the classical perspectives—users/patients, economic and financial performance, internal processes and growth and learning—are used, and it is possible to affirm that the BSC is used yet as a control tool instead as a tool to implement the strategy. Consequently, the BSC use is at the beginning and there is scope for lot of improvements, in particular if these organizations want to use this tool to manage the crisis. The future possible developments of this research are the following:. O. M. M. 1. The comparison of the BSC implementation with other countries. 2. The analysis of the BSC implementation in other Italian hospitals because, by this investigation, it emerges that there is a gap in the literature. 3. The analysis of the BSC implementation issues.. C. Note. R. 1. The same questions were made in the paper presented by Sánchez, Broccardo, Pires and Sampedro (2011).. FO. References. N. O. T. Armitage, H.M. & Cam Scholey (2007). Using strategy maps to drive performance. CMA Management, February. Barichello, P., F. Impiumi, A. Orlandin, M. Paiola & M. Piccinini (2007). Balanced score card in sanità: La realizzazione di mappe strategiche. Mecosan, 16(62), 99–118. Colella, M.T., G. Coppa & V. Sanguigni (2003). BSC e controllo strategico: Implementazione in un’azienda ospedaliera. Amministrazione & Finanza,11, 22–29. Cuccurullo, A. & C. Tommasetti (2004). L’impiego delle mappe strategiche nella balanced scorecard: Processo di costruzione ed effetti sistemici. Mecosan, 13(49), 47–62. Drury C. & M. Al-Omiri (2007). A survey of factors influencing the choice of product costing systems in UK organizations. Management Accounting Research, 18(4), 399–424. Fanì, M., S. Ferro, L. Garramone, M.A. Arras & S. Orecchia (2009). Esercizi di misurazione delle performance in un servizio sanitario territoriale. Politiche Sanitarie, 10(1), 34–41. Ferrari, D. & L. Merlini (2006). Vincere la sfida della governance: L’introduzione della balanced score card all’Asl di Pavia. Mecosan, 59, 119–136. Fioretti, G., M.G. Paradisi, C. Pifferi & A. Messeri (2009). Applicazione della balanced scorecard nei dipartimenti della Asl 2 dell’Umbria. Mondo Sanitario, 11, 29–35. Frittoli, G. & M. Mancini (2004). Balanced Scorecard e aziende sanitarie. Mecosan, 49(1), 21–46. Gao, T. & B. Gurd (2006, November 26–28). Lives in the balance: Managing with the scorecard in not-forprofit healthcare settings. Australia and New Zealand Third Sector Research, Eighth Biennial Conference on ‘Navigating New Waters’, Adelaide..

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