1. IHI 2007 Institute for Healthcare Improvement 2007 Balanced Scorecard Scorecards and Performance Measures Funded by the Office of Rural Health and Washington’s Department of Health

2. IHI 2007 2 On the phone…  20 Years CEO experience in hospitals, health systems and managed care  CEO of United General Hospital, Sedro Woolley, WA 1979-1984  Senior Faculty Member IHI  Consulting work focuses on improving quality and performance Michael Pugh

3. IHI 2007 3 How Does Your Board Answer the Questions… How good is our hospital? Are we achieving what we need to achieve? How do we know?

4. IHI 2007 4 Another Way to Think About How Good…  What are you willing to promise patients about medication safety at your hospital?  What are you willing to promise patients about the use of evidence-based medicine in your hospital and clinics?  What are you willing to promise patients about the level of care and service that will be provided?  What are you willing to promise the community about access and cost?

5. IHI 2007 5 How Good?  What level of medication error is acceptable if you are the patient?  How do you pick the patient that is not to receive evidence-based treatment?  How do you decide which patient should have a surgical site infection?  How do you explain to your mother that it is perfectly acceptable to wait in the ER for 8 hours and receive a bill for $3500.00?

6. IHI 2007 6 1. Prevent Harm from High-Alert Medications... starting with a focus on anticoagulants, sedatives, narcotics, and insulin 2. Reduce Surgical Complications by reliably implementing all of the changes in care recommended by SCIP, the Surgical Care Improvement Project (www.medqic.org/scip)www.medqic.org/scip 3. Prevent Pressure Ulcers... by reliably using science-based guidelines for their prevention

7. IHI 2007 7 4.Reduce Methicillin-Resistant Staphylococcus Aureus (MRSA) infection by reliably implementing scientifically proven infection control practices 5.Deliver Reliable, Evidence-Based Care for Congestive Heart Failure to avoid readmissions 6.Get Boards on Board … by defining and spreading the best-known leveraged processes for hospital Boards of Directors, so that they can become far more effective in accelerating organizational progress toward safe care

8. IHI 2007 8 Building Stronger Health Care Boards Basic Governance Functions – Keeper of the Mission – Set Direction and Expectations – Monitor Progress – Hire and Evaluate the CEO – Represent the interests of the community

9. IHI 2007 9 Scorecards are Tools for Monitoring Progress and Setting Expectations  Financial Operating Budgets and Targets Cash Capital Expenditures Financial Integrity-- Audits  Compliance Legal and Regulatory Board Policy Risk Management  Strategic Progress on implementation of key strategies Results  Quality Patient Satisfaction Clinical Care Performance Indicators Patient and Employee Safety

10. IHI 2007 10 Why Use Scorecards and Performance Measures?  You should be able to look at what the leadership of an organization measures and determine the organization’s priorities and strategy  In God we Trust, all else bring data….

11. IHI 2007 11 Balanced Scorecards Drive Operating Strategies Strategic Feedback /Learning articulating vision strategic feedback review and learning Balanced Scorecard Adapted from The Balanced Scorecard Kaplan & Norton Adapted from The Balanced Scorecard Kaplan & Norton Clarify/Translate Vision and Strategy consensus Communicating and Linking goals performance measures Planning and Target Setting align w/ strategy allocate resources

12. IHI 2007 12 Seven Leadership Leverage Points for Driving Great Performance* 1. Set measured system-level aims and oversee their achievement at the Board level 2. Align aims, measures and strategies in a leadership learning system 3. Channel leadership attention to aims 4. Engage an effective and committed executive team 5. Engage the CFO in this work 6. Engage with physicians 7. Build deep improvement capability *www.ihi.org Reinertsen, Pugh, Bisognano 2006

13. IHI 2007 13 Leverage Point 1: Establish system level measures  Set measured system-level aims and oversee their achievement at the Board level Owned by the governing board Collectively, the measures answer the question: How good are we? Transparent—everyone in the organization should know the Key Measures

14. IHI 2007 14 What Should Be On the Hospital Board’s Performance Scorecard?  Mortality  Readmission Rates  Patient Experience  % of Patients Receiving Care According to the Evidence  Employee Satisfaction or Engagement  Cost per Discharge  Days Cash on Hand  Patient Safety  Access Board performance measures should at minimum include expected aims and results for:

15. IHI 2007 15 IHI Proposed System Level Measures IOM Dimension System Metric Safe  ADEs/1000 doses Effective & Equitable  HSMR  Functional Outcomes (SF-6 for Chronic disease) Patient-Centered  Inpatient Satisfaction  % patients dying in hospital Timely  Days to 3 rd next available appointment Efficient  Health care costs per capita  Hospital costs per discharge Other  Staff voluntary turnover  Investment per capita

16. Critical Questions For Creating Alignment Between Desired Results and Quality Projects Organizational Performance Measures Drivers (Core Strategies and Theories) Quality Projects (Operating Plan) 1. What are your system level aims and aspirations? 2. What are the system- level measures of those aims? (Big Dots) 3. How good must you be, and by when? 1. What are your key organizational strategies for moving your dots? 2. What really has to be changed, or put in place, in order to achieve each of these goals? 1. What set of projects will move the Drivers far enough, fast enough, to achieve your aims? IHI 2007

17. Aligned Operating Strategies and Quality Projects Drive Desired Results Organizational Aims What by When Drivers (Core Operating Strategies and Theories) Quality Projects (Operating Plan) Cost per Discharge decrease by 2% in 2007 HSMR Mortality Rate less than 70 in 2007 Patient Satisfaction 75% rate top box in 2007 Decrease Nosocomial Infections Improve Flow Remove Waste  Surgical Site Infection Project  Ventilator Project  Evidence-based Care Project  Clean Hands Project  ER to Bed Project IHI 2007

18. An Organization’s Measurement System Should Be Linked to Drive Desired Results Organizational Performance Measures Strategic Measures/Drivers Process & Operational Measures IHI 2007

19. 19 Simple Rules for Board Level Scorecards and Dashboards  Measure what is important  Review every meeting  Use topic specific scorecards to drill down at committee level (finance, strategy & planning, quality, safety, etc.)  Use Simple Formats  Set all-or-none target levels for clinical care and safety measures (100% or 0%)  Avoid using averages; use percentiles measured against standards  Avoid color coding to low expectations  Data graphed over time is the most powerful format

20. IHI 2007 20 Color Coded Dashboards Only As Good As Your Targets  Simple, and sometimes too simple  Color coding without numbers can mislead  Tendency is to assume that only the “red” blocks need attention  If used, boards need to frequently ask how the targets are set

21. IHI 2007 21 The Case For All-or-None Measurement Report to the Board Quality Committee “Our MI Core Indicators were greatly improved last quarter. Only one EBC requires corrective action.” Governance Question: “What % of Patients Got the Right Care?”

22. IHI 2007 22 The Case For All-or-None Measures Only 30% of Patients Received the Right Care* *Right Care defined as receiving all of the required EBC elements that the patient was eligible for

23. IHI 2007 23 The Case for Measuring Against Standards/Expectations  Door to Intervention time proven to be critical to Heart Attack outcomes  Standard=30 minutes from presentation to (Thrombolytics or 90 minutes to Angioplasty) Quality Committee Report  “Our data indicates that we are exceeding the national standard. Our average time for thrombolytics is 29.5 minutes.” Great Report or Not?

24. IHI 2007 24 Not. What about the 25% of patients with delayed care? 25% of All Patients Beyond the Standard Average = 29.5 Minutes 30 Minute Standard

25. IHI 2007 25 Anywhere Hospital Heart Surgery Program Board Report 5.9% 1.1% Jan 05 Jan 06 Monthly Mortality Should this be a cause for celebration? “Compared to January of last year, our heart surgery mortality has decreased from 5.9% to 1.1%

26. IHI 2007 26 When do you want to have your Heart Surgery? St. Elsewhere Monthly Heart Surgery Mortality AVG = 3.5% 5.9% 1.1%

27. IHI 2007 27 An Oregon Hospital’s Proposed Governance Scorecard (example)

28. In Partnership with the American Hospital Association 28 Bronson 2004 Scorecard

30. Sample Board Dashboard Format

31. IHI 2007 31 Summary  Every hospital board should adopt a set of high level performance measures and targets used to define expectations and track performance  Content and systematic review is more important than format  Use All-or-None Targets for Key Clinical Measures  Asking good questions the key to successful governance

32. IHI 2007 32 For More Information Michael Pugh Pugh Ettinger McCarthy Associates, LLC P.O. Box 8298 Pueblo, Colorado 81008 719 542-2433 Direct 719 542-2564 Fax mpugh@verismasystems.com Institute for Healthcare Improvement www.ihi.org Center for Healthcare Governance www.americangovernance.com These slides may be used by others only in their existing format with proper attribution/service marks of Pugh Ettinger McCarthy Associates, IHI and the Center for Healthcare Governance

33. IHI 2007 Institute for Healthcare Improvement 2007 Questions/Comments?

34. IHI 2007 34 Future WSHA & AWPHD Programs Governing Board Orientation & Education May 1, 2007 12-1 PM

35. IHI 2007 35 Future WSHA & AWPHD Programs CEO & Trustee Quality Summit SeaTac Hilton May 31, 2007 8 AM-5 PM  Facilitated by Dr. James Reinertsen

36. IHI 2007 36 Future WSHA & AWPHD Programs Rural Hospital Summer Workshop Campbell’s Resort Chelan, WA June 25-27, 2007  Dennis Stillman: Board Self-Evaluation  Brad Berg: Compliance Planning  Jan Jennings: Building Better Boards and Managing a Hospital in the 21 st Century

37. IHI 2007 37 Future WSHA & AWPHD Programs WSHA 75 th Annual Meeting Bell Harbor International Conference Center Seattle, WA October 11, 2007 1:00-3:00 PM  Mock Board Meeting – Relationships, Learning, Decision-making, and Behavior: Larry Walker, playwright

38. IHI 2007 Institute for Healthcare Improvement 2007 Thank you for participating! Please fill out the evaluation.