Implementing the Balanced Scorecard in a Public Hospital

Worldwide Balanced Scorecard has been implemented widely in the private sector. Some authors believe that the Balanced Scorecard was originally conceived as a concept addressed the need for performance measurement in the private sector and not fully meet the needs of the public sector in this regard. While in private sector the managers have begun to realize the advantages of this modern tool for monitoring and improving performance, in public sector the situation is different, the phenomenon still being shy.

Even though the costs are high and the lack of specialists constitutes a real obstacle in implementing this instrument in public institutions, we will try in the following to present arguments demonstrating that the Balanced Scorecard can be the most suitable of all the management tools for the public sector. Application of BSC in a public hospital may lead to results very valuable. Currently, hospitals operate in an environment characterized by increasing need for transparency, cost control, simplification and streamlining in organizing. In figure no. 2 we schematized the steps leading the implementation of the Balanced Scorecard in a public hospital.

figure 2

figure 2

Figure 2. Steps preceding the implementation of BSC in a public hospital

Basically, the BSC scheme for a hospital is presented in figure no. 3.

figure 3

Figure 3. Balanced Scorecard for hospital

After analyzing theoretical aspects of the four perspectives, we built a model for implementation of Balanced Scorecard in a public hospital in Romania. Thus, we specifically identified the sources of data that will get financial and non-financial indicators required BSC analysis and specific objectives for each perspective individually. Finally, we determined the indicators, their measurement mode, established targets and persons in charge for objectives.