About Perfomance Management
A new financial discipline helping organizations create value.
Concurrent with the healthcare industry's mounting pressures, the role of finance has gained a new focus in the last decade. It turns out the entire double-entry accounting system, created over 500 years ago, was designed to serve investors, not the managers of the business. Traditional financial structures like balance sheets, income statements, and profitability measures tend to be historical in nature - and provide only limited value in managing the enterprise. As a result, a new field of performance measurement began to emerge in the mid-1990s. The field is perhaps best known by the work of Harvard Business School Professor Robert Kaplan, who introduced the concept of the Balanced Scorecard is a series of Harvard Business Review articles and a series of best-selling books. The Balanced Scorecard suggests that business managers should use a balance set of financial and non-financial performance measures to manage the business. These non-financial measures - in areas like innovation, learning and development, patient experience, and human capital - may represent 80% of the metrics used to manage the business. And with that, the field of "performance measurement" was born. But in practice, the industry took performance measurement further. Rather than keeping scorecards and dashboards in the boardroom, innovative leaders found they could provide these metrics directly to employees, and use them to improve effectiveness throughout the business. And if employee incentives were aligned with key performance measures, they found behavior changed and additional means to further increase value. By managing the organization using performance measures, improved leadership, accountability and focus are possible. And so the field of "performance management" was created. Every management action impacts these financial and non-financial measures. The challenge is selecting the right blend of actions to drive the metrics in such a way to create value - and accomplish the enterprise's mission. Each organization will have its own unique set of measures. One size does not fit all. Studies have shown many organizations across a variety of industries, including health care, have successfully increased their value relative to their peers by managing with this balanced set of indicators. For healthcare providers, MedeFinance offers a starting point for key performance management metrics in areas that address specific issues. Rather than "boiling the ocean" by reviewing and selecting from a sea of possible performance metrics, we provide a starting point for performance metrics focused on particular operational areas - to focus operations quickly and deliver value. So let's not boil the ocean. See Adaptive Web Analytics for more information about MedeFinance's adaptive web analytics, learn more about our Client Services, and when you're ready, contact us to get started.