How can Management Dashboards be implemented to enable self-management teams in healthcare organizations and support the management in decision making?

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Date: 14-09-2015

How can Management Dashboards be implemented to enable

self-management teams in healthcare organizations and support the

management in decision making?

Author: Manolito Gobind

Supervisor: Prof. Hans Borgman

Date: 14-09-2015

“The primary activity and responsibility of a business is to turn ideas into products and services, measure and understand how the customers respond, and then learn whether to pivot or persevere in

future validated learning feedback loops (Ries, 2011)”

Confidential. This report contains confidential business information and cannot be

distributed.

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Date: 14-09-2015

Management Summary

Healthcare is becoming more commercial and competitive every day, this practice is exemplified and stimulated by cutting cost and further privatization of the healthcare industry. The Healthcare organizations, their management and their workforce need to adapt to these business environment changes, understand their clients and employees, why they choose to stay or leave, know when to scale up or down, which actions have the greatest impact on the business, which units, departments, or individuals need attention, as key indicators of overall organizational health (Davenport, 2006) This thesis discusses the issue of management control and self-management in home healthcare organizations using Zorgfix, from the Netherlands, as the case study. Particularly because the Strengths, Weaknesses, Opportunities, and Threats analysis from Zorgfix identifies the following weaknesses: self-management home care, management reporting, and commercial / cost awareness. Buurtzorg is the home healthcare market leader in the Netherlands and is conquering the national and international market. They are not only praised for its self-management business model and the resulting excellent performance results in terms of client cost effectiveness, but also high employee and client satisfaction. (KPMG, 2013) (Gray et al., 2015) Therefore they are a good reference and are used as a benchmarking organization throughout this thesis. Other home healthcare providers, such as our case-example Zorgfix, have no other options left but to improve their competitiveness before becoming obsolete. Based on this research it becomes clear that Buurtzorg has an efficient management control system (MCS); an integrated set of processes and tools that a company uses to develop its strategy, translate it into operational actions, to monitor and improve the effectiveness of both (Kaplan and Norton, 2008) and are adapt at combining this with self-management practices. In short, healthcare organizations like Zorgfix are also in need of an MCS. However, simply implementing the Balanced Scorecard (BSC) is not an option, and a complete MCS is too complex for an organization like Zorgfix. Please refer to exhibit 20 to see an overview of the MCS proposed by Kaplan and Norton 2008. Unfortunately the main reasons for failure of BSC implementations derived from literature are poor design and difficulty of implementation. This is mainly due to the difficulty of taking the balanced scorecard from concept to reality (McDonald, 2012; Pijnenburg, 2013) In order to successfully implement a MCS a customized framework for the healthcare sector is required. This report addresses these issues and combines BSC, Design Thinking, and Management Dashboard concepts by introducing a home healthcare management control framework based on the MCS from Kaplan and Norton 2008. The build-up of the framework presented in figure 1 is described step-by-step in this thesis.

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Figure 1: The Management Control System framework customized for Zorgfix

Conclusion

The resulting MCS framework is based on BSC principles and applies design thinking concepts (Vredenburg, 2003; Wieringa, 2014) to rapidly prototype management dashboards in co-operation with the organizational departments (Dowding, 2014) leading to corrective self-management actions and adaptive organizational behavior (Kaplan and Norton, 2008) to improve business performance. Examples of good design practices are taking small incremental steps, involving the users in the design process, showing the ease of use and usability (McDonald, 2012).

The designed management dashboards, shown in the addendum, have proven to provide employees with new and different perspectives on business performance. Thus serving as a much required foundation to discuss outcomes, take on particular projects, or just simple corrective (behavioral) actions leading to self-management. The extent of Self-management is regarded to be dependent on different factors. 1) Management’s commitment and support 2) employee motivation and willingness 3) business constraints 4) the performance measurement; feedback loop length and size 5) the level of user involvement in the development of the management dashboard 6) the ease of use, the usability and ease of access of the management dashboards.

Limitations

The research was conducted at Zorgfix, a five year old entrepreneurial health care organization from the Netherlands. The organization is growing fast, has a very young and dynamic team, with limited time and resources, and therefore has a high focus on daily operations. The designed dashboards, in the two month project timeframe, from the exhibits show that the Zorgfix information systems can be

•Context and user based analysis

•Rapid Prototyping

•Delivering fit for purpose and easy to use products

•KPI Overviews

•Performance feedback •Comparison information •Visualisation and Trends

•Integrated performance management system •Business performance KPI's focussing on Finances, Customers, Internal processes, Employees •Actions determined by departments. Could be business actions, but also determining BSC KPI's and improving management dashboards

Action:

Actions

Plan:

Balanced

Scorecard

Do:

Design

Research

Check:

Management

Dashboards

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Date: 14-09-2015 rigid (and have a lack of reporting functionality) thus these systems will not provide all required answers to all departments. Only information that is gathered in a structured and standardized method can and has been used to create the management dashboards.

Future research

Future research could find new ways to also include non-structured and standardized data in the management dashboards. This is particularly interesting because many of the healthcare plans, information, statements and reports about clients are unstructured. Data mining and analysis of the unstructured data could lead to new healthcare insights e.g. what type of reporting and communication is more effective.

This research focused on the adoption of management dashboards. Future research would benefit by researching the established framework with other types of products and services, such as health domotica and measurement devices mentioned in chapter 5.

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1 Introduction

The healthcare market is growing at an immense speed due to relatively healthy aging of populations in affluent countries. This forces governments to continuously re-assess their health benefits programs, which in turn stimulates the healthcare market to re-design its strategy, products, and processes. It is claimed that healthcare is the most complex, knowledge-driven industry in the world and represents one of the most significant economic challenges. Healthcare organizations and their workforce need to adapt to these business environment changes, understand their clients and employees, why they choose to stay or leave, know when to scale up or down, which actions have the greatest impact on the business, which units, departments, or individuals need attention, as key indicators of overall organizational health (Davenport, 2006)

1.1 Purpose

This thesis discusses the issue of management control and self-management in home healthcare organizations using Zorgfix, from the Netherlands, as the case study. Particularly because the Strengths, Weaknesses, Opportunities, and Threats analysis from Zorgfix identifies the following weaknesses: self-management home care, management reporting, and commercial / cost awareness. Contrary, Buurtzorg is the home healthcare market leader in the Netherlands and is conquering the national and international market. They are not only praised for its self-management business model and the resulting excellent performance results in terms of client cost effectiveness, but also high employee and client satisfaction. (KPMG, 2013) Based on the research it is clear that Buurtzorg has a Management Control System that enables their employees to be self-managing. (Gray et al., 2015) As a solution for Zorgfix the purpose of this thesis is to address the issues associated with implementing an integrated Management Control System (MCS) and combine Balanced Scorecard, Design Thinking, Management Dashboard concepts to introduce a customized home healthcare management control framework for Zorgfix based on the MCS from Kaplan and Norton 2008. Please refer to exhibit 20 for their MCS framework.

1.2 Research questions

The main research question this thesis sets out to answer is how healthcare teams can become more effective at self-management?

a. How can employees become more self-managing?

b. What Balanced Scorecard performance measurements are relevant for a healthcare organization?

c. Is Design research a good methodology for rapid prototyping of products and services?

d. What are Management dashboards and what are their requirements?

e. What self–management actions can be performed to provide added value to the organization?

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Date: 14-09-2015 f. How do the BSC, Design research, Management dashboards and self-management

concepts fit together?

Based on the gathered information about the home healthcare market leader Buurtzorg, it becomes clear that they have an efficient management control system (MCS), and combine this with self-management practices. A MCS is an integrated set of processes and tools that a company uses to develop its strategy, translate it into operational actions, to monitor and improve the effectiveness of both (Kaplan and Norton, 2008)

Therefore, business performance information is becoming increasingly important because of the need to improve effectiveness, efficiency, and the quality of health services. This requires improving the availability of management dashboards (Brooks et al, 2015). There has been extensive research on the added value of management dashboards providing such information. According to Dowding (2015), healthcare dashboards provide performance summaries using visualization techniques and feedback to enable better care decisions at different organizational levels, and include the client as a participant in the process. Zorgfix has made an important step towards improving business performance by implementing “one single truth” in the form of a business information system (Strikwerda, 2013) The information system solution is Nedap; a second generation electronic client healthcare document system (ECD). It is currently the second most implemented ECD system in the Dutch market. The main reason identified for its success is the interactive user design approach (Adams et al., 2013) thus constantly determining and prototyping the system requirements together with its users. This is why design research is also expected to contribute significantly to the success of implementing an MCS in the case of Zorgfix.

Zorgfix, unfortunately, does not have a MCS, but necessity is becoming urgency. Particularly because understanding, forecasting, and improving the business is now key to its survival. Healthcare insurers are demanding information about healthcare performance in terms of cost and customer satisfaction before allocating home healthcare budget to a home care provider.

1.3 Methodology

The methodology for the research conducted in this company project thesis is based on desk research for the analysis of main concepts used in the thesis. The desk research is performed by analyzing papers around the topics: healthcare, balanced scorecard, management control systems, design thinking, self-management, and management dashboards. Throughout the paper there is continuous comparison of Zorgfix to the home healthcare market leader Buurtzorg in the Netherlands, to determine learning points for companies aspiring self-management.

The management dashboards are created by interviewing Zorgfix employees from all departments to determine their view on opportunities for self-management, the information they require for their activities, and how they perceive the ease of use and usability of prototyped management dashboards.

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Date: 14-09-2015 This is in line with the design research methodology from Vredenburg 2003: 1) who are our users? 2) what are our users looking for? 3) what do they use today? 4) What else is out there? 5) How is this for starters? 6) does this work? 7) What would make it better? 8) How do we stack up?

The build-up of the framework is described step-by-step in the following chapters.

The report starts with Chapter 2 the importance of self-management, organizational phases and the maturity of an organizations in terms of its workforce and capacity for business performance improvements. Chapter 3 continues this assessment with outlining the importance of the Balanced Scorecard as a performance management system. Chapters 4 explains the added value and the use of design thinking concepts to assess business requirements to measure and present business performance. The resulting management dashboards are explained in Chapter 5 to understand how the organization is performing, can optimize processes, and provide better value and satisfaction for customers. The prototyped management dashboards from the case of Zorgfix are discussed per department based on the design thinking framework. Chapter 6 discusses a meetings and reviews framework to determine follow-up and actions. The conclusion chapter then consolidates the gathered insights from the Zorgfix case into the Kaplan and Nolan 2008 management control system framework, to help healthcare organizations perform this cycle with a strong focus on identifying what is important to the business, what management dashboards are required by its users, and how it can assist healthcare organizations to become actionable and self-managing.

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Date: 14-09-2015

2 Self-management

A Strengths, Weaknesses, Opportunities, and Weaknesses (SWOT) analysis has been included in the exhibits to provide an overview of how Zorgfix perceives their competitiveness from an internal point of view. The SWOT identifies the following weaknesses: self-management home care, management reporting, and commercial / cost awareness. By creating a custom Management Control framework in this thesis, these weaknesses can be mitigated. Because the concept of Self Managing Work Teams has been increasingly embraced by businesses to empower its workforce. Such self-management practices are based on empowerment structures, which are currently implemented by nearly 75% of the top 1000 US firms (Millikin et al, 2010).

Acar and Acar (2012) note that healthcare organizations with an adhocracy culture have the highest quantitative and qualitative performance results compared to the hierarchy, clan, market, culture types. Even though, unfortunately, the hierarchy culture type is represented the most. Their research strengthens and proves the advocating and supporting of self-management practices and the resulting business performance results. Which is also exemplified by the home healthcare market leader Buurtzorg.

The People Capability Maturity Model is a maturity framework that focuses on continuously improving the management and development of the human assets of an organization, and therefore is a good fit for a service oriented organizations like the healthcare industry. The model describes an evolutionary improvement path from ad hoc, inconsistently performed practices, to a mature, disciplined, and continuously improving development of the knowledge, skills, and motivation of the workforce that enhances strategic business performance (Wikipedia, 2015).

Research from the book The Human Equation shows seven principles of internal organization and management that improved stock market returns over the past quarter century. These principles included 1) employment security 2) selective hiring of new personnel 3) self-managed teams and decentralization of decision making 4) comparatively high compensation contingent on organizational performance 5) extensive training 6) reduced status distinctions and barriers, and 7) extensive sharing of financial and performance information. When properly combined these will enable intelligent action coordinated toward a common purpose (Curtis et al, 2010) As can be seen from principles 3, 5, 6, 7 the main focus of organizations should be to self-enable and empower their employees by training and sharing key information to allow for better decision making. These aspects, when taken together determine the level of management an employee can exhibit. Of course the opportunities for self-management activities also depend on the maturity of the organization, the competencies, and the willingness of people, and the availability of business performance information.

The PCMM clearly emphasizes the importance of selecting, combining, empowering and investing in people as a team and workforce capability by emphasizing the measurement of business performance results. Furthermore it acknowledges the integrated nature of an organization, and its adaptation to changing conditions and technology by educating the workforce. The PCMM, shown in figure 2, has five stepping stone phases indicating the organizational maturity.

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Figure 2: The organization maturity levels of the People CMM (Curtis et al, 2010)

The initial phase focuses on getting people on board to work at the organization. Simply staffing people for work that needs to be done now. The managed phase emphasizes the wellbeing of individual participants in terms of compensation, training, and communication. The defined phase provides a basis in terms of creating a participatory culture, developing workgroups, and moving towards planning individual careers and workforce competencies. Zorgfix is currently in phase 3 “Defined”, the new ECD will help Zorgfix to shift to phase 4 “Predictable” by acknowledging the importance of Quantitative Performance Management and empowering workgroups. However the ECD only captures information related to the client’s home care services. Thus is missing other important departmental key performance indicators for a health care organization, as can be derived from the value chain analysis in the addendum. The introduction of Management Dashboards could further facilitate the move towards phase 4 by better understanding the Quantitative Performance Management requirements and enabling further empowerment of workgroups to use this performance information; The departments HRM, Quality, Planning and Coordination, Finances, Nurses will be facilitated by gathering their Balanced Scorecard requirements (chapter 3) in terms of important KPI’s for their departmental management dashboards, based on their own input and feedback with the help of design thinking (chapter 4). This will help Zorgfix in setting Specific, Measurable, Acceptable, Realistic, Timed goals, and the tools to help monitor whether these goals are achieved using feedback loops (chapter 5). The management of the organization has to discuss these goals (chapter 6), and the effects with its peers from the different departments to determine what improvements have to be made and who will be RACI (Responsible, Accountable, Consulted, and Informed) in the business implementation.

How can these self-management practices be implemented in the healthcare environment? The main themes in self-management for the home healthcare industry are 1) Alignment to customer’s healthcare needs 2) Re-instate nursing professionalism 3) Reduce cost of overhead and management layers. These themes are discussed in further detail to highlight the main factors influencing self-management team practices in healthcare.

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2.1 Theme 1: Alignment to customer’s healthcare needs

Health control can be thought of as a mutual goal. Nurses working with, rather than working on patients. Based on research clinicians described the following particular strategies they found helpful in the transition process towards SWMT’s. Making personal adjustments, such as talking less and listening more, were found helpful. They also valued self-management training, particularly in the fields of collaborative communication styles. The healthcare professionals required dedicated time and practice of their new skills e.g. collaborative goal setting, action planning. Self-reflection is also a useful technique in making further change. Clinicians engaged in reflective practices, such as seeking and providing informal peer support, case reflections and meetings with peers or supervisor (Mudge et al, 2015). This could indicate the need for a personal performance and client performance dashboard for the nurses. Where the clients satisfaction with healthcare services in different stages of the client customer journey determines the stage and overall scoring. These stages can be divided in the early, intermediate and later stages. The identified themes and sub-themes reflect the process of supporting self-care with patients: 1) early stages: ‘making sense of the patient and the condition’: Categorization of patients; Diagnosis as an initial point for developing a working relationship with patients; Patient education. 2) Intermediate stages: ‘ways of working with patients’: breaking the task down; Cognitive restructuring and addressing dissonance; modelling how to behave; Encouragement; Listening; Involving the caring entities; Referral as a resolution to becoming ‘stuck’. 3) Later stages: engaging and managing people in the longer term: ‘in for the long haul’ thinking (Macdonald et al, 2007).

2.2 Theme 2: Re-instate nursing professionalism

A success story of SMWT implementation in the healthcare business is Buurtzorg. According to them home healthcare can be defined as: “A self-managing team of caregivers organizes the care professionally and independent for a group of clients. She agrees to take care of the clients wishes optimally, without the help of (or reference from) a central manager. There is often a coach who coaches the team and facilitates. Self-managing teams are good at coordinating and regulating themselves in liaison with internal and external stakeholders. The supporting business services facilitate the demand-driven teams. The team sets their own goals, work methods and team member contributions. The team as a whole is responsible for the results and is accountable to management.” (Nijhof et al, 2013) Research shows that an important determinant of SMWT’s effectiveness is the team’s cohesiveness. The cohesive teams improved their productivity with a higher degree of self-management, whereas non-cohesive teams decreased their productivity with a higher degree of self-management (Millikin, 2010). A good team fit of newly hired caregivers should therefore be determined by the caregiving team, in co-operation with the HRM department. Furthermore, communication and team spirit should be facilitated and encouraged with each individual caretaker by focusing on self-leadership. Self-leadership is a self-influence oriented management process aimed at improving performance by self-direction and self-motivation. Individuals and teams can set more effective goals for themselves when they are armed with accurate information regarding current performance levels (Neck et al, 2006) For people working

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Date: 14-09-2015 in organizations this requires interacting with team members to achieve the integrated balanced scorecard goals, which will be discussed later in this thesis. Organizations should therefore enable an open information sharing culture between the organization and the nurse, and in turn between the nurse and the clients. Because the latter generates the main revenue stream. As mentioned before, in the healthcare industry, it is important to know what personal healthcare services can and cannot be invoiced to the healthcare insurer. Nurses need to see and understand the implications of their decisions in terms of the clients’ physical, mental, and social well-being when providing healthcare services. As discussed based on WHO guidelines in the health chapter included in the addendum. A client oriented management dashboard can provide nurses with the information they need to make better decisions with regards to the client’s health. The ECD enables health administration of vital signs like blood pressure, heart rate, blood oxygen. These can be used and communicated with the client to provide more insight to the client’s health. The nurse can take appropriate measures to educate the client to take corrective actions.

2.3 Theme 3: Reduce cost of overhead and management layers.

Self-management can be inspiring, but also frustrating. This is particular true, and self-defeating, in cases where management does not provide adequate coaching and support, or boundaries. Furthermore it could be that management disapproves team decisions or takes decisions on their own all together. (Actiz, 2014) These are principles we also identified from the PCMM framework and are also mentioned from real practice perspective by Buurtzorg and Actiz.

Teams require information about their performance. They want to know whether they are successful and what attributed to the success. Many organizations have developed management dashboards or are currently working on such tools. The dashboards provides teams with a mechanism to review Qualitative and Quantitative performance results. Helping them to see and understand the effect of their self-management efforts, or more specific their actions. Some examples: what would happen to the productivity when scheduling is performed differently? Or if the nurse gets an overview of how many clients they have helped in a given period? How much time they spend on an average client, compared to the corresponding agreed nursing times. Or how satisfied the customer is with the healthcare services and the impact it has on the client’s wellbeing? Would this be motivating, stimulating, and show the nurse that he or she is making a true contribution? These results for each team and the total should be made available. The information would allow performance comparisons by the nurses and teams, which would also eliminate the need for management. If there are deviations beyond the established margins, the team and management have to be consulted and assist in making improvements (Nijhof et al, 2013)

Now that we have explored the main themes in self-management and linked those to possible management dashboards to inform and help the healthcare professionals it becomes important to understand how the dashboards can be created efficiently and effectively to be easy to use and fit for purpose based on a performance management system, in our case the Balanced Scorecard.

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3 Balanced Scorecard

The Balanced scorecard is one of the most influential performance management and measurement concepts. However there are many different interpretations of what the Balanced Scorecard is, and is not. This could be because the BSC has evolved and branched into many industries, sectors, and even countries (Perkins et al., 2014). Kaplan and Norton introduced the concept in 1992 as a simple performance management tool, replacing the conventional and exclusive focus on financial data. Since then the concept has evolved into more complex performance management systems. The goal is to improve the measurable performance of an organization by improving its ability to manage its 1) employees, 2) business processes, 3) customer assets, whilst at the same time improving 4) financials. The balanced scorecard has been amended by a strategy map to better understand the interrelationship between these components. The strategy is largely determined by the positioning of the organization e.g. how is the organization planning to compete with its five market forces mentioned in the addendum. An example of a strategy map for Zorgfix has also been included in the addendum. The BSC increases the effectiveness by combining seemingly disparate performance information into one integrated report, thus providing a more holistic view of an organization. Ensuring that managers consider operational measures as part of an integrated whole, enabling them to see whether improvement in one area may have come at the expense of another. Resulting in new decisions and actions to improve these four key performance indicators. The reasons for BSC adoption are discussed in the next paragraph, and are said to be dependent on the environment (Kaplan and Norton, 2007).

3.1 Reasons for BSC adoption in healthcare

An extensive review was published about BSC adoption in healthcare environment. The review was conducted based on papers from 1991 until 2011 (BMcD consulting, 2012). The results show that the main reasons for BSC adoption in healthcare are improving competitive advantage, maximizing business opportunities, managing risks, and formulating strategic capabilities, demonstrating business value by combining financial control with quality improving actions geared towards best practice and best fit patient and employee results. Therefore, the establishment of a BSC based on the company’s strategy is essential in building our framework. The first step of the framework is shown in figure 6. Next, creative employees, with their uncodified, personal knowledge have to choose and divide their valuable time and energy on activities and revenues today, to ensure revenues tomorrow, and often through cross business unit projects. The business need for the BSC stems from the traditional concept that managers in charge of operating units are normally measured on efficiency and productivity. Which would typically be focused on short term results and outcomes. This also makes them reluctant to focus on other important business aspects such as employees and clients, hold extra resources for exploring new opportunities and careful with supporting risky projects (Campbell and Strikwerda, 2013). This is precisely why our framework proposes small, medium, and long term feedback loops, which are also added in figure 6.

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3.2 What are the benefits of the balanced scorecard?

The benefits of the BSc in healthcare can be summarized as enabling strategy clarification and consensus. Serving as a decision-making framework by communicating the focus of the business and its priorities, providing clearly defined targets. This in turn supports linking strategy with initiatives and actions such as building consensus, allocating resources, aligning all levels of the organization and improving management accountability. Furthermore, the BSC can serve as an early warning system by providing snapshots of organizational performance. These snapshots provide input for a continuous feedback loop that energizes internal stakeholders to focus on improving internal operations, and to keep learning and improving. Changing the organization to a culture where measurement and improvement is valued (McDonald, 2012).

The results of implementing BSC in healthcare are reportedly positive. For example at the Duke Children’s Hospital from 1996 – 2000 a reduction in average cost per case from $15.000 to $10.500; A margin increase from 11 million loss to 4 million gain; decrease in the length of stay from 7.9 to 6.1 days. While increasing satisfaction with children’s services with 45 percent (McDonald, 2012). This is exactly the type of detailed information that is provided by Buurtzorg, the largest home healthcare provider in the Netherlands. These insights undoubtedly created success for Buurtzorg, which is said to be the prime example of SMWT’s in healthcare, by providing their employees with valuable knowledge and information about the healthcare services performance and helped the organization with corrective actions where necessary (Gray et al, 2015)

Challenges when implementing the BSC

However, the core reasons that are mentioned with regards to failed BSC implementations are poor design and difficulty of implementation. This is mainly due to the difficulty of taking the balanced scorecard from concept to reality (McDonald, 2012). Similarly, research from Pijnenburg in 2013 at the Dutch hospital “Utrecht Medical Center” shows that the balanced scorecard has not been implemented properly at the hospital. The author notes that the implementation took place in a financially unfavorable period. The process of designing the BSC was inefficient, incomplete, and does not cover the core functions sufficiently. Furthermore the BSC was not adjusted to the changing internal and external environment. The underlying reasons can be found in old and fixed habits, not invented here syndrome, limited training and knowledge of the BSC concepts, but also difficulty in accessing the information and insufficient guidance on what actions could and should be taken to make improvements. As we concluded from the healthcare dashboard research and interviews with the Zorgfix healthcare professionals. This makes it more important to emphasize the benefits of implementing the BSC as an integrated performance management system and create a framework that does support incremental and continuous adaptation to internal and external factors using a feedback cycle as part of a management control system. Eliminating discussions about bad operations by improving information

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Date: 14-09-2015 based decision making about good (departmental) strategy implementation (Kaplan and Norton, 2008) The distance between current processes, measuring those processes, and taking actions could be too big. Therefore, the implementation of the BSC alone is not sufficient, smaller design steps and feedback cycles are required. Thus, explaining the main reasons for choosing design research as the incremental prototyping method for the framework.

Critical Success Factors of the BSC

The factors influencing the success of a BSC implementation are management support and involvement of all organizational levels. These aspects are readily available in an entrepreneurial organization like Zorgfix. In addition, the ICT facilities should support monitoring and reporting performance in order to be able to demonstrate the empirical benefits. Management has the responsibility to review and monitor BSC efforts and facilitate ongoing staff communication to enable integrated and enterprise wide improvements (McDonald, 2012)

Criticism to the BSC

Criticism to the BSC consists out of lack of and adequate time dimension. Causing an inherent time lag between a proposed change and any result being apparent in the performance. In the healthcare business there is continuous direct contact with the client, therefore it would make sense to measure the perceived nurse performance by the client in different sized feedback loops. Second, the interdependencies between the improvements are ambiguous and difficult to be proven through cause and effect relationships. The healthcare system would probably benefit most through awareness and better understanding of performance measurements. Thirdly, performance improvements are not unidirectional but more multi directional and an interdependence between the performance measurements and improvements exist. Furthermore the BSC lacks a competitor's perspective of benchmarking performance and has incomplete management information that is needed to manage and guide the business. Lastly, organizations merely select the measures that are easiest to capture. Thus causing a lack of causality based on inappropriate measures. Clients and employees satisfaction are the most important factors to determine the outcome of services. Thus it is expected that there is a crucial correlation between their satisfaction factors. (Perkins, 2014)

Now that the BSC has been described as a performance management system. It is important to understand how Zorgfix can tailor it to their needs.

3.3 Balanced Scorecard of Zorgfix

The balanced scorecard of any home healthcare organization in the Netherlands is largely pre-determined by mandatory questionnaires from the government. These are respectively focused on client satisfaction (CQI) and a focus on employee satisfaction (MTO). These questionnaires have to be conducted every two years. The business performance data which is collected using these questionnaires are explained in further detail.

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3.3.1 Client satisfaction (CQI)

The Consumer Quality Index (CQI) is a standardized method to measure, analyze and report client satisfaction. The questionnaire is mandatory and organized by the government. A minimum score of 8.4 for client satisfaction is mandatory in order to be eligible for future healthcare contracts. If the score is lower a plan of improvement has to be submitted. This allows healthcare institutions to understand what is important to clients, and their satisfaction with their healthcare experience. The CQI survey is submitted to clients every 2 years and the results are published on public websites. The results can be seen as management dashboards reflecting the client satisfaction. The main themes of the CQI questionnaire are 1) agreements on client’s homecare 2) communication with the healthcare facility 3) accessibility of the home care organization 4) professionalism of the health care 5) the care and health 6) independence and activities 7) recommendation score, or also the Net promoter Score as a crucial indicator of the company’s success. Which we discussed in the Zappos example.

The gathered CQI questionnaire results can be used by healthcare stakeholders depending on their perspective: 1) potential healthcare clients to make better decisions, 2) healthcare insurers to compare and make decisions on health care service providers 3.1) Zorgfix as a benchmarking tool to compare against other healthcare providers and 3.2) to understand business performance and improve the quality of healthcare services where necessary.

The main issue with the CQI is that it is part of a large, 2 year, feedback loop. This does not provide sufficient and fast enough feedback to the organization to make fast incremental improvements and check if these were effective. After consultation with the Quality Assurance department it became clear that a Zorgfix variant of the CQI should held internally every 6 months, in order to better understand the progress the organization is making with its business performance and service improvements. More frequent CQI’s such as monthly surveys are not expected to provide any added value due to the time required to implement improvements. The director, however, indicated that it could be interesting to ask 3 basic questions about the service quality to clients per client healthcare session. The result would be a smaller and even more direct feedback loop, which is already represented in the framework as shown in figure 6.

3.3.2 Employee satisfaction (MTO)

The satisfaction of employees is measured by the employee satisfaction questionnaire (MTO) every 2 years. The questionnaire is mandated by the government. The results do not have consequences for healthcare organizations. The questions are about 1) staffing 2) employment 3) personal development 4) communication and consultation, 5) leadership 6) job function and content, organization and quality, 7) working conditions, 8) working experience.

Indicators of employee satisfaction are new employee applications, employee turnover, employee cost of acquisition, HRM hours expenditure versus new people hired (measuring effectiveness of applications), advertising costs of jobs. Newly hired nurses have to be supported and coached during

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Date: 14-09-2015 their Zorgfix introduction. It’s important to understand what information is made available to them when joining Zorgfix e.g. function profile, primary and secondary working conditions. The performance ratios can be based on nurse levels e.g. level 5, 4, 3, 2, 1, interns. In addition it is important to clarify the level of seniority e.g. junior, medior, senior available for clients. Again this particular feedback loop, similarly to the CQI, is simply too large to be effectively used in daily operations and improvements. The general thinking here is that small improvements lead to bigger improvements. Measuring and focusing on the smaller improvements will make it more transparent for the organization in understanding what works positively and negatively.

3.3.3 Financial measures

Healthcare organizations are becoming more commercial every day. Largely due to changes introduced by the government to minimize health care costs and increase market competition. This increases the need for financial budgeting and monitoring for healthcare organizations. Zorgfix does not have a particular budgeting system or monitoring method implemented. At the beginning of a fiscal year the healthcare budget for a particular geographical area is negotiated with the health office (Zorgkantoor) of health insurers. The budget is assigned for particular types of healthcare. The average of the budget can then be divided over the year by the healthcare provider. The healthcare provider has the responsibility to keep in line with the budget, typically by levelling the budget over the entire year e.g. divide the budget by 12 months. If however the healthcare provisioning is substantially higher than the healthcare provider can ask the health office for additional healthcare budget. The allocation of additional budget depends on different factors. The Zorgfix director indicated that trend information about the healthcare budgeting versus provisioning per client would help not only help Zorgfix better understand the allocation of their healthcare services but also would improve discussions with the Zorgkantoor. A graphical prototype was of this management dashboard was created in excel to substantiate this hypothesis, see exhibit 14.2.

According to the Zorgfix Quality department the financial management of Healthcare organizations should focus on: creating budgets and plan, financial ratios, material costs, personnel costs, innovation costs. The healthcare coordination should focus on planning healthcare, nurse capacity per knowledge and experience level versus the client's health care requirements expressed in availability ratios. The types of financial KPI’s recommended for healthcare organizations were examined by a literature review. The relevance for financial management at Zorgfix is also assessed. Based on this research and discussions with the director, the bookkeeper and quality department the most important and currently useful financial KPI’s were identified. These KPI’s are similar to the indicators identified by the Mayo Clinic which are presented in figure 3. The main exceptions are in terms of inpatient versus outpatient indicators e.g. instead of waiting time for inpatient treatments at the hospital, there would be on time arrival of the nurse at the patients home for outpatient treatments.

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Figure 3: Strategic Performance Management: Development of a Performance Measurement System at the Mayo Clinic

The BSC from Zorgfix consists out of the CQI, MTO and financial perspectives which are largely pre-determined by the government except the internal processes perspective, in other words “How” the organization operates its internal finance, employee, and client processes can be determined by the healthcare organization, which will be discussed in the next paragraph.

3.3.4 Internal Processes

The general home health care processes can be described, according to the quality department, as being 1) the client processes of providing healthcare services 2) the employee intake, retention, and exit processes 3) the financial processes to receive and allocate the appropriate financial resources to control the business. 4) The business processes.

Zorgfix, due to its entrepreneurial focus and rapid growth, requires more clarity in terms of roles and responsibilities. In addition there is a need on consensus and commitment towards guaranteeing particular outcomes such as deliverables. The Zorgfix Steering group, a new concept that will be introduced in Q3 2015, will have monthly meetings translating the BSC strategy into departmental responsibilities, the daily activities, improving business processes, and the follow up.

The BSC information described in this chapter has been placed into a concept strategy map, which has been included in the exhibit of chapter 21. Thus, establishing the first part of the framework, a customized BSC, depicted in figure 4. The second part, design research, will help the organization to perform rapid prototyping of the forthcoming management dashboards. Design thinking will be further explained in the next chapter.

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4 Design thinking

Design research is based on directed trial and error experimenting (Dubberly et al., 2010). This requires end user participation in the design process, particularly in contributing to the requirements of the product design, trying and validating the product prototypes and providing valuable feedback for further learning and improvements. (Wikipedia, 2015) Good designers facilitate these discussions about goals and means, needs and possibilities, context and constraints, key attributes and actions required in the process. (Dubberly, 2012) This requires a personality profile based on the following behaviors: empathy, integrative thinking, optimism, experimentalism, and collaboration. A good example is Thomas Edison. He created the light bulb that could be used in people’s homes. But he realized that it required a supporting system for generating and transporting electricity. So he built those too (Brown, 2010). Similarly, Zorgfix will be using the ECD but this does not cover the management dashboard requirements from all the organizational departments, as explained in the value chain analysis exhibit, thus the remaining management dashboards have to be determined together with the departments. The Balanced Scorecard of Zorgfix, discussed in the previous chapter, will serve as the basis for employees in determining the required management dashboard to guide their self-management initiatives. These management dashboards “artifacts” are thus designed to provide information about a problem in a certain context in order to improve something in that context (Wieringa, 2014) e.g. low customer satisfaction or high cost. This is an interactive process of finding and exploring management dashboard solutions that provide added value to employees. This allows the designer to rapidly create management dashboard prototypes and allows the user to provide immediate feedback to determine if

•Integrated performance management system •Business performance KPI's focussing on Finances, Customers, Internal processes, Employees

Balanced

Scorecard

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Date: 14-09-2015 there is match in terms of fit-for-purpose and ease-of-use. These user centered and rapid prototyping characteristics, together with the high adoption rate explained later in this chapter, make design research suitable for inclusion in the MCS framework. The next step in the framework is presented in figure 5, to facilitate the practical prototyping translation from the balanced scorecard into management dashboards.

4.1 Design research process implementation

IDEO is a company famed for its Design Thinking facilitation and implementation. They promote the following design thinking process composed out of so called design spaces: 1) inspiration: find problems and/or opportunities that motivate the search for solutions 2) ideation: focus on generating, developing, testing ideas that may lead to solutions 3) implementation: implement the solution, spread the word, and move on to the next project (iteration). Projects will loop through the inspiration and ideation spaces more than once as ideas are refined and new directions taken (Brown, 2010). However there are more types of Design Thinking. The paper “How do you design? A comparison of design models” provides an extensive overview of over one-hundred descriptions of design and development processes, from architecture, industrial design, mechanical engineering, quality management, and software development. All these design models have in common that they are meant to find user centered solutions in a particular context.

•Integrated performance management system •Business performance KPI's focussing on Finances, Customers, Internal processes, Employees

Balanced

Scorecard

Design

Research

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Date: 14-09-2015 The general design process is visually depicted in figure 6. The end-user is actively and directly involved in the prototyping process to determine an optimal solution. The ease-of-use and usability (fit-for-purpose) of a solution are said to be key for user adoption (Venkatesh et al., 2000). Because in the end, the user will be the person who determines if the solution can and will be actively used. Thus increasing adoption significantly.

Figure 6: User Centered design activities (Maedche et al., 2012)

The questions that should be asked in a design process are best outlined by the User Centered design process from Vredenburg (Vredenburg, 2003). The main questions a product designer should ask when creating a solutions for its users are:

1. Who are our users? (Scope)

2. What are our users looking for? (Analyse) 3. What do they use today? (Analyse) 4. What else is out there? (Analyse) 5. How is this for starters? (Prototyping) 6. Does this work? (Prototyping)

7. What would make it better? (Prototyping) 8. How do we stack up? (Prototyping)

The design process steps described by Vredenburg (2003) will be the Design research framework that will use to assess our management dashboards. The results from using this framework for department analysis can be found in the exhibits of chapter 13.

Before concluding this chapter about design thinking, it is important to also highlight how third party healthcare appliances can also help design thinking in exploring and creating better healthcare services outcomes.

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4.2 Design thinking applied to healthcare

Design thinking can be applied to healthcare in many ways. For instance, the use of smartphone apps from third parties allow rapid testing of the effect of treatments on the patient’s wellbeing. Similarly, in the consumer field, there are now many different tools such as home kits, also called domestic robotics (domotica) that can help people remotely or automatically adjust the room temperature, lighting, curtains, automatic door openers, stair lifts, which can help patients accommodate their homes for their particular healthcare needs. Thus, creating a “smart home” which enables smart decisions based on gathered data by equipping these home and health appliances with “senses” and “feelings”, coined Thingalytics. (Bates, 2015, chapter 3) The arrival of more and better medical products like blood pressure monitors, sleep monitors, medicine dispenser, calorie counters, activity counters are also debit to an improvement in healthcare. These products are now accompanied by software that help the patient in monitoring their health status and better understanding their conditions. Smart devices and analytics help make better use of health professional’s time by reducing travel costs and getting the right people to the right place in time. The patients’ medical problems can be fixed at an early stage, before they require critical care by integrating patients’ records with clinical, administrative, and security systems. Enabling healthcare providers to become more responsive and provide an optimal patient environment. (Bates, 2015, chapter 4) Many of these products will help health patients to improve their living conditions by framing health in terms of well-being and broadening healthcare to include self-management. Self-management in healthcare reframes patients as designers, an example of a shift also occurring in design practice by reframing users as designers. (Dubberly, 2010)

The famous online shoe retailer “Zappos” has been acknowledged for its customer service and customer experience journey. Customers have the opportunity to select what they need and want from a wide selection of shoes from Zappos website. The products are then shipped fast and free of shipping charges. The shoes can be returned without return shipping fees or questions asked. In essence making it as simple and hassle free as possible for the customer to find their new pair of shoes. The rules that determine Zappos’ company DNA are 1) making customer service the responsibility of the entire company and not just a particular department. 2) Focusing and embedding customer service in the culture 3) empowering the employees to take responsibility in taking care of customers. (Hsieh, 2010) During this process Zappos is creating a powerful customer base that reviews, tweets, likes, and shares the customer experience. Helping the company boost their image and branding by promoting its customer centered services through word of mouth, newspaper articles and social media. But also boost their Net Promotor Score like no other retail company has achieved before, in essence creating a viral marketing engine. This approach seems similar to what Buurtzorg is doing. They are the most (positively) publicized healthcare company in the Netherlands. Zorgfix can take a similar approach by enabling clients, business departments and healthcare professionals to design the best customized customer experience with the help of third party products and services. The next chapter will provide

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Date: 14-09-2015 insights on how the business performance can become transparent, monitored and actionable using management dashboards.

5 Management Dashboards

Organizations can improve efficiency by managing information for decision making. By understanding the interaction of several key organizational, technological, process, and people areas within an organization (Brooks et al, 2015). Management dashboards have been extensively researched as an information source for decision making. The paper “Dashboards for improving patient care: Review of the literature” (Dowding et al, 2015) concludes that the dashboards are typically visualized performance summaries which are often related to the quality or productivity of care to inform healthcare decisions. The authors also indicate that the impact of introducing visualized information in the form of clinical and quality dashboards on care processes and the accompanying results are not sufficiently researched. On positive terms the authors mention that there is some evidence that introducing clinical and quality dashboards can have a positive effect on care outcomes and processes of care. But that it is generally unclear what dashboard characteristics such as type of graphical display, method of presentation to users are related to improved outcomes, nor is it clear how clinicians use dashboards in co-operation with their teams. The authors do note that the method mostly used to identify the status of a particular measured item is a traffic light e.g. green, orange, and red. Furthermore the impact of a dashboard was noted to be highest when the healthcare professional could easily access the dashboard e.g. the desktop background / screensaver, or another easily accessible location. This also requires prototyping with the end-user to determine what works best for him or her.

These management dashboard principles described here have to be included in the framework shown in figure 7 with BSC as the guiding principle for the relevant KPI’s and design thinking as the user centered prototyping process to be able to provide teams with relevant management dashboards in an easy to understand format and enable teams to become Self-Managed Work Team. The initial management dashboard requirements from the Zorgfix departments have been analyzed using interviews and included in chapter 13. The management dashboards that have been prototyped and developed in the two month period using the framework, are described in chapter 14.

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6 Actions by the Self-Managed Work Teams

Empowered decision making by Self-Managed Work Teams indicate a radical change from how work is traditionally organized, structured, and operationalized. It also means embracing responsibility for doing integrated tasks and decision-making authority by employees, which was the responsibility of management-levels in the past. Kaplan and Norton propose a practical structure for the management meetings and reviews of the management system performance, which leads to the discussion and determination of business actions. Thus creating the full cycle of the feedback loop required for the framework. The meeting structure is presented in figure 8 as a guiding principle for the Zorgfix stuurgroep meetings.

•KPI Overviews

Actions

_Scorecard

Balanced

Design

Research

Management

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7 The healthcare self-management system

8 Conclusion

This paper proposes an integrated Management Control System (MCS) approach by combining the performance management system strong points from the Balanced Scorecard with design thinking concepts to create rapid user centered management dashboards, allowing employees to understand idiosyncratic information and take corrective actions based on short, medium and long term performance feedback cycles to enable more focused and better self-management in the healthcare business. Creating and embedding of a management control system is a challenging task. The Management Control System from Kaplan and Norton has served as the blueprint for determining a suitable management control system framework for Zorgfix. (Kaplan and Norton, 2008) The resulting framework is mapped in the following table and presented in figure 9.

MANAGEMENT SYSTEM, KAPLAN AND NORTON 2008

HOME HEALTHCARE MANAGEMENT SYSTEM FRAMEWORK

STAGE 1. DEVELOP THE STRATEGY

Strategy: Development of the strategy by director using evidence based data from the workforce.

STAGE 2. TRANSLATE THE STRATEGY

Balanced Scorecard: implement Balanced Scorecard strategy map and performance measurements

STAGE 3. PLAN OPERATIONS Design Thinking: user centered design thinking per department STAGE 4. MONITOR AND

LEARN

Management Dashboards: develop management dashboards to measure and understand performance and trends

STAGE 5. TEST AND ADAPT THE STRATEGY

Actions to increase, change, or decrease efforts in pursuing the strategy

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The custom MCS framework helps in creating fast workable solutions. The user is in charge of determining the added value of the departmental services design by reviewing and providing directed feedback. Management can determine if the proposed solution is worth the resources, and can re-adjust decision making in each small (weekly), medium (monthly), or large (yearly) design iteration easily. The initial management dashboard requirements from the Zorgfix departments have been analyzed using interviews and included in chapter 13. The management dashboards that have been prototyped and developed in the two month period using the framework are described in chapter 14.

The results from Zorgfix show that people from different departments have many ideas and concepts they would like to explore and test in practice. However, often there are self-limiting and contextual behaviors in place. Examples of this type of behavior is based on assuming there is not enough time, resources, knowledge, or experience. Design thinking can help explore the leanest management dashboard solutions that are fit for purpose, build them by prototyping iterations, and then determine if the solution is good enough in practice or should be developed further based on new insights. Design thinking gathers the inspiration from the organization, and increases inspiration for future developments. Inevitably, it is the collaborative culture built around personal accountability and a contribution mind-set that takes longest to develop. (Strikwerda, 2013) Design thinking combined with management dashboards will provide employees with a perspective on organizational information serving as a much required foundation for discussion about pro’s and con’s to explore or take on particular projects or just simple corrective (behavioral) actions, leading to self-management. This is particularly the case with

•KPI Overviews

Action:

Actions

Plan:

Balanced

Scorecard

Do:

Design

Research

Check:

Management

Dashboards

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Date: 14-09-2015 regards to employee and client satisfaction, which are of paramount importance for a healthcare service oriented organization.

9 Discussion of Management Dashboard findings

The exhibits in chapter 13 provide an overview of the departmental interviews to determine the added value from a balanced scorecard perspective. Based on the interviews requirements were identified. Based on those requirements several management dashboards were designed, prototyped, tested, and further improved. Based on the insights from the management dashboards the departments were able to perform self-management from their perspective. Examples are provided hereafter.

The feedback and improvement loop imposed by the CQI and MTO are 2 years. For an entrepreneurial organization like Zorgfix which has existed 5 years, this is a loop that is not likely to provide sufficient and timely information about the organization's performance in terms of client and employee satisfaction. The organization will benefit by introducing a limited version of both questionnaires every 6 months. This will improve a faster feedback cycles and provide a more rapid understanding of the effectiveness of implemented improvements. The questions asked to employees and clients could should be as simple as possible, contain at least 1 question from each of the categories, and rated on a scale of 1 to 10. This allows the organization to sense its performance continuously, and take action accordingly. Objectivity from both clients and employees in these questionnaires should be pursued.

Nurse level composition

Benchmark comparison of Buurtzorg indicates that 80% of the nurses are of HBO level. The main goal of this percentage is to have all rounded nurses, who can take responsibility for most nursing services. Whereas Zorgfix has the reverse e.g. 20% of the nurses are of HBO level. This has a negative effect on the ability to provide complex nursing services for Zorgfix. In terms of self-managing Teams this would mean a greater dependency on HBO level nurses compared to Buurtzorg teams. Exhibit 6 shows the benchmark data available from Buurtzorg, which could serve as a comparison guideline for Zorgfix.

Self-Coordination by nurses

The planner currently has the responsibility of matching client demand with available nurses. However, after the introduction of the ECD it is possible to empower the nurses to coordinate and plan the nursing work together. This is expected to greatly reduce effort for both planners and nurses, thus increase self-management opportunities. Planning has an important responsibility in training and coaching the nurses to become self-organizing and understand the business logic of allocating resources, incurring cost, and generating revenues from the healthcare services. The ECD contains planning functionality for the nurses. However Zorgfix could still decide that the planning should be done by a planner, this is not recommended. A gradual transition to self-planning by the nurses is highly recommended.

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Handbook with guidelines for meeting healthcare budgets

The nurses have to become more responsible for understanding implications of what types of healthcare services are compensated and which are not. Furthermore they should be aware of how many budget is left, and whether the budget utilization is within established margins. The new ECD will facilitate the nurses with the management dashboard. However the nurses still need to understand how to interpret the data and know how to make decisions based on the data. The knowledge on how to make these decisions should be collected in a handbook.

High expenses for Lease cars

The director requested an overview of lease car cost, since she expected these to be high. Based on the overview it becomes clear that there is quite some cost involved in the lease cars. Which is not too surprising for a home healthcare organization where travelling to the client is part of daily service delivery. However, there are no lease cars with logos of Buurtzorg driving around. This is very a-typical of a home healthcare company. Looking at the cost of Zorgfix, it becomes apparent that the lease park is of high cost e.g. 15% - 20% of all direct expenses. Therefore it might be interesting for Zorgfix to find alternatives to lease cars, such as hiring nurses with private cars.

How can Management Dashboards be implemented to enable self-management teams in healthcare organizations and support the management in decision making?