Swiss Hospital Heals Itself

Switzerland's Kantonsspital Obwalden is a general community hospital with a long history dating back to an infirmary mentioned in the 16th century. The hospital expanded rapidly in the 19th and 20th centuries, and in 1996, following a three-year construction project, it opened a modern treatment center.

However, the most dramatic change in the hospital's recent history occurred on January 1, 2000, when the canton of Obwalden changed its hospital law and the Kantonsspital became an independent organization under the principles of New Public Management. This change meant not only that politicians would cease to have strong influence over the hospital's operational affairs, but the hospital would also have the challenge of meeting new annual performance targets. Kantonsspital Obwalden chose SAS to help it meet this challenge.

Adopting a Modern Management Approach
As Paul Flückiger, director of Kantonsspital Obwalden states, after 10 or 15 years of neglect, the task of putting the hospital back on its feet in a short timeframe was a considerable challenge. "Until the changeover, the hospital had been organized along classical hierarchical lines, and this left the middle management disenchanted. So we have abandoned the old departmental structures as far as possible, and adopted the modern, process-oriented management approach with the basic principle of structure-follows-process."

In this approach, small teams are built around a particular clinical process, so that the right people come together and deliver the appropriate treatment at the right moment. This meant taking on a wholly new mindset in which doctors, nurses and other care professionals had to overcome communications barriers established over past decades.

"The problem is that clinical training traditionally inhibits thinking in terms of the big picture," says Flückiger. "Doctors are taught to be excellent healers, but they are not taught how to lead people strategically." As part of the change process, mid-level management was thoroughly restructured. In the new setup, there are four business processes under the general hospital management: surgery, gynecology and midwifery, medicine and psychiatry; these are supported by 13 competence centers, offering services such as anesthetics, physiotherapy and radiology.

To support staff that now had new areas of responsibility, such as the management of costs and budget within their business processes, Kantonsspital Obwalden decided to introduce a balanced scorecard system to monitor and communicate performance improvements. The idea behind such a solution is to measure performance across several dimensions, such as finance, customers, internal processes and innovation. Strategic goals are arranged in these four dimensions and their interrelationships are modeled – in this way people will be able to draw conclusions such as: "If we want to improve x, then we have to change y." Older management systems focused simply on measuring how much x had changed after the event, so they were of limited use in driving change.

A Partnership to Empower People
The hospital chose SAS Strategic Performance Management to implement the scorecard system. According to Flückiger, the scorecard system is already well advanced for the hospital management and for the four business processes, though it has been more of a challenge to build scorecards for the competence centers because of the smaller number of staff involved and the lower volumes of data. Building the scorecard is a valuable exercise in itself, as it highlights the interdependencies in an organization, facilitating better communication.

"We now set the scorecard objectives in the autumn of each year and publish scorecards on the fifth working day of each month," says Flückiger. "This means we can provide frequent and rapid feedback to the process owners about how things went in the previous month." There is an automatic feed into the scorecard system from operational systems and additional data is input manually. Flückiger believes there will always be some manual input regarding "soft" metrics such as patient satisfaction. He was impressed by the way SAS managed to build the system from such a variety of data sources. "Our partnership has been very successful. SAS was very quickly able to extract valuable information out of what many would regard as medieval data systems. This included identifying and correcting mistakes in old reports.

"The scorecards enable us to identify and act upon areas of underperformance," continues Flückiger, who has identified a range of benefits. "For the hospital's senior management, the main impact has been to demonstrate the autodynamics of processes. This has given managers the confidence to empower people to be more responsible for decision making. It has enabled us to take more of a hands-off approach to day-to-day operations. At the same time, we can see any problem areas quickly and support appropriate action."

Building Confidence
"There are also benefits for the clinical professionals in the four process areas, who are often less experienced in management," states Flückiger. "The scorecard has helped build confidence, to change people's mindsets so that they are more ready to accept that mistakes are sometimes made, that processes can sometimes break down, but we have to learn from these mistakes. The scorecard is not there to judge individual performance but to help improve the hospital's performance. We're more of a learning organization now, and with learning comes improvement."

Flückiger is very pleased with the progress to date but recognizes that there is some distance yet to cover. "We have achieved a lot in a very short time. Things are very satisfactory at the organizational level of the hospital. There is still work to do at the level of the processes. The deeper you go into the enterprise as a whole, the more difficult it is to define concrete objectives. For example, the performance of radiology is somewhat dependent on other functions, and relationships with internal and external clients are difficult to measure.

"Overall, however, the SAS scorecard system is helping us to transform Kantonsspital Obwalden into a patient-focused, objectives-driven organization. We have abandoned management by directive and developed 'treatment plans' that are loose guidelines about the optimum approach, allowing us to improve from experience. In general, I want to regulate as little as possible; we have highly competent and professional employees who can deal with all of the day-to-day issues they face."

Following a New Path
"The new hospital guidebook we are producing offers principles but not regulations," concludes Flückiger. "Every patient and every case is different so professionals need flexibility. For such an approach to work requires people with the right mindset. It also requires a new type of IT system, and based on the good experience we have had with SAS in building the balanced scorecard, we are also addressing other information delivery requirements.

"A classical reporting system is like forensic science, it helps you to analyze what has happened in the past – interesting but not always very helpful. By contrast, the balanced scorecard that we have implemented with SAS Strategic Performance Management has allowed us to follow new paths. It helps us to identify the areas we need to change in order to achieve the results we want in the future."

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