Balanced Scorecard Helps Hospital Improve Service and Tighten Funding Allocation

Scorecard in Bridgeport HospitalBridgeport Hospital, a private, not-for-profit hospital in Connecticut, needed to improve its financial management.  The hospital had been operating at a loss despite being adequately funded, and also needed to find a way to make excellence in customer care and employee retention relevant to financial goals. The Balanced Scorecard approach helped Bridgeport to improve fiscal responsibility while improving in key service delivery areas.


Bridgeport Hospital, located in Bridgeport, Connecticut, is part of the Yale New Haven Health System. This private, not-for-profit acute care hospital has:

  • 425 licensed beds,
  • more than 2,600 employees and
  • 550 active attending physicians representing more than 60 subspecialties.

Bridgeport Hospital provides nearly:

  • 250,000 patient care visits annually, including 20,000 admissions;
  • nearly 230,000 total outpatient visits to the hospital (including more than 72,000 emergency department visits and 35,000 clinic visits);
  • 7,200 same-day surgery visits, and
  • 38,000 outpatient rehabilitation visits.

The Challenge

Financial pressures, including federal funding changes and an overall shift towards outpatient care has resulted in widespread downsizing and closures among hospitals in the U.S.

Operating margins at U.S. hospitals were, on average, 20% lower in 2001 than they were four years earlier.

These challenges are forcing hospitals to attend more rigorously to the financial aspect of their business.  However, patient care is still at the core of what they do, and they must find ways of building patient care metrics into their management models.

Bridgeport Hospital, a member of the Yale New Haven Health System, needed to address the financial realities of a challenging funding and operational environment while maintaining an ongoing commitment to excellence in patient care.

Quality, patient satisfaction and staff retention were key areas that the hospital wanted to improve, and they needed to find a way to connect those pursuits to financial outcomes.

Additionally, Bridgeport knew that they had not been completely efficient in allocating funding towards their operations; despite being adequately funded, they were operating at a loss. They needed to find a way to use their capital more effectively and make it stretch further towards organizational excellence.

The Solution

The Balanced Scorecard gave Bridgeport a framework for connecting:

  • quality clinical outcomes,
  • expert clinical care providers,
  • satisfied patients,
  • doctors and staff,
  • volume and
  • market share growth to financial measures.

The hospital began by bringing together management groups to map a course to financial health.  The leadership team, along with the board of directors and medical and administrative staff crafted three scenarios for future success.  Clinical priorities that fit these scenarios were further refined with the help of external community physicians, and ultimately the three scenarios were merged to create a single vision for the future.

The vision was supported by four perspectives:

  • organizational health,
  • quality and process improvement,
  • volume and market share growth and
  • financial health.

As part of the quality initiative, Bridgeport tasked Employee of the Month Award winners to craft an accountability system that translated excellent customer service into a series of simple, measurable activities known as the Service Contract.

The contract was made up of seven daily commitments, such as,

  • “I will introduce myself to patients 100% of the time,”
  • “I will be sensitive and aware of cultural diversity,” and,
  • “I will keep patients and families informed.”

Adherence to the Service Contract was taken into consideration during employee evaluations, and accounted for 50% of the merit increase they could be given.

This gave employees a clear and performable set of behaviors that are directly linked to compensation.

The Balanced Scorecard was also instrumental in helping the hospital to collaboratively prioritize capital budget items.

  • In the first year, the leadership team used the Scorecard to set budget items,
  • but in year two, they were able to tabulate specific scores for budget items listed under each of the four perspectives.

Items with weaker scores were given lower funding priority.

This process has allowed clinicians and senior management to increase their understanding of the clinical and other dimensions of care.  It has also transformed a fairly political process into one that is team-oriented and goal-driven, bringing physicians, clinicians and lay managers together in an open collaboration towards common goals. What used to be determined behind closed doors by the finance department is on openly evaluated in a transparent and understandable process.

The Result

The Balanced Scorecard has given the organization a shared language, which is especially crucial for an organization made up of so many highly skilled, diverse and strong-willed professionals.

  • Clinicians are now able to think in terms of financial impacts, and
  • non-clinicians are able to better understand the clinical measures required for excellence in patient care.

Annual strategic planning takes far less time since the implementation of the Balanced Scorecard, because only the metrics change.  The plan remains essentially unchanged from year to year.

After one year of Balanced Scorecard implementation, Bridgeport had achieved significant improvements in several key areas.

  • They were able to lower the turnover rates among registered nurses and overall staff to exceed the human resources target they had set.
  • Bridgeport met their goals for providing a certain volume of care in all care areas, and exceeded their goal for cardiovascular surgery and diagnostic cardiac catheterization.
  • And perhaps most importantly, patient satisfaction and customer preference increased.

While achieving improved performance in a number of areas, the hospital also met its financial goals.   They were able to increase the price of their managed care services, stay below the allocated staffing budget and achieve supply chain savings of $750,000 in excess of their goal.

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