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Balanced Scorecard Approach: The Internal Business Process Perspective at Duke Children’s Hospital

The Internal Business Process Perspective at Duke Children’s Hospital
This paper attempts a review of the Internal Business Process Perspective at Duke Children’s Hospital as measured by the balanced scorecard approach. Critical here is to first define the balanced scorecard approach. This is primarily a strategy based tool that aligns or merges the activities of an enterprise to its goals, objectives, mission and vision. It is also a management tool that is stringent on easing communication both internally and externally (CQI, 2008, p. 13).
In the case of Duke Children Hospital it can be defined as a strategic planning tool that is used to link the hospital administrators to clinicians and other allied professionals in the health sector so as to meet the objectives of the hospital. For a long time hospitals and in this context the Duke Children’s Hospital were driven only by providing quality healthcare to their patients. This approach is a necessary but was not a sufficient approach. The financial perspective or performance and internal business perspective are also quite critical in advancing health care and remaining relevant (Kaplan& Norton, 2001).
The duke children hospital was in crisis in the year 1996 and was considering shutting down some facilities and services. Revenues were plummeting downwards, costs were at an all time high and productivity of the staff had dwindled. The turn around for duke children’s hospital came through implementation of the balanced scorecard which saw the hospital become more strategy oriented and brought together the stakeholders of the hospital on a single platform (Segil, Goldsmith, & Belasco, 2003).
How duke children’s hospital implemented the balanced scorecard
Physicians play an important role of determining how long a patient stays in hospital and what medication they take, nurses play a critical role of advancing quality and are a significant percentage of a hospitals cost of labor. The stakeholders at duke children’s hospital developed an alliance. They were first each provided with adequate and timely information on how they individually affected performance of the hospital. The balanced scorecard approach focuses on the performance of individuals and not on criticizing the performance of others. The approach at duke children’s hospital was to get connected, get results and finally to get smarter (Segil et al 2003).
They got connected by identifying objectives of the hospital, and mapping out strategies to achieve them with everyone’s input. This they did by identifying the key performance indicators of the hospital which act as a link to both the clinical aspects and business aspects of the hospital. Next they laid out strategies to maintain staff satisfaction so as to increase quality. The hospital continually measured and recognized staff performance and welfare. Thirdly they set up regulatory measures. Because the hospital is a highly regulated arena it was imperative that the hospital comply (CQI, 2008, p. 21). The next approach was to analyze performance of the hospital that is to be result oriented. The hospital rather than reduce staff provided tools that helped the staff improve their productivity and reducing costs. An example is how the hospital used technology to register all patients that came in daily and also automated the process of filing for claims. Their previous approach of verifying claims through telephone calls cost them up to 45% denials. The nurses however later collaborated with the accounting staff to implement the automated claims verification which saw a reduction of denied claims from fifteen to one percent. The hospital also ensured that data ran smoothly between all relevant parties and changed their approach to strategic solutions from a crisis intervention approach. They analyzed data more regularly so as to aid in gauging performance (Kaplan& Norton, 2001).
The third aspect that the hospital implemented was getting smarter. The hospital recognized that the healthcare sector is a dynamic sector and so to keep up with all the changes they had to continually come up with new strategies to deal with the emerging issues. They also regularly reviewed and revised the scorecard which enabled them to make updates of the scorecard and key performance indicators. The hospital embraced new challenges as opportunities for improving themselves (Niven, n.d., Para. 3)
The hospital embraced the internal business process perspective by focusing on how to create value. The hospital created value by increasing both staff and patient satisfaction and by increasing their revenues. The hospital operated within a framework of managing its operations and patients. That is the day to day routine operations of the hospital for example diagnosis of diseases. As for patient management the hospital involved the patients in the vision of the hospital by offering quality healthcare. (Niven, n.d., Para. 4)
The other framework was the regulatory framework of ensuring that all hospital operations were within the required standards and acting as advocates of the patients. The last framework is the innovation aspect. The hospital set out to find new ways of doing things in a timely and efficient manner so as to increase quality and efficiency (Segil et al 2003).
By employing the balanced scorecard approach, the duke children’s hospital has seen a significant improvement in not just the internal business process perspective but in all perspectives. Their cost per case which stood at $14,889 was reduced to $2000 in 1996 and 2000 respectively. That meant that there was a reduction of close to $30 million of total costs. There was an improvement in net margins from a negative 11 million dollars to 4 million dollars in the same fiscal years. Patient satisfaction has risen from 4.3 to 4.7 on a scale of 5.0. Staff productivity rose to an impressive 100% up from 71% between the 1996 and 2000 fiscal years. Their satisfaction on a scale of 5.0 also went up from 1.5 to 4.0. Morbidity rates increased as readmission rates fell from 7% to 3%. The transition of the hospital is a clear indicator of the positive impact of the scorecard. The three step approach of the hospital was a huge aid to achievement of their goals (Kaplan& Norton, 2001).

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