Managing Service Quality: An International Journal

Framework for evaluating performance and quality improvement in hospitals

Clare Chow-ChuaMark Goh

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Clare Chow-ChuaMark Goh, (2002),"Framework for evaluating performance and quality improvement in hospitals",
Managing Service Quality: An International Journal, Vol. 12 Iss 1 pp. 54 - 66
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1. Introduction

Case study
Framework for
evaluating
performance and
quality improvement in
hospitals

This decade will witness an increasing spate

of innovations and knowledge building across
a multitude of industries. For industries
directly involved in critical service delivery,
such as hospitals and nursing homes, the
effect and impact of investing in knowledge
building and innovation generation to provide
better patient care delivery without
compromising on operating cost and quality
will become increasingly prevalent globally.
The health-care delivery system has been
undergoing formidable challenges in the
1990s (Griffith, 2000). Indeed, the current
environment for health-care organisations
contains many forces which demand
unprecedented levels of change such as
increased customer expectations, steeper
competition, and public sector agency
pressures. Today, the emphasis is not just on
financial indicators but it also encompasses
non-financial indicators to take advantage of
key internal and external opportunities and
respond to these opportunities swiftly. For
many hospitals in the USA, various
instruments and frameworks are already in
place to assess the impact of different quality
or productivity improvement initiatives and
performance measurement (Griffith, 2000).
As it stands, managing and measuring
performance for health-care institutions are
increasingly becoming very difficult and
complex as the health-care system moves to
one of greater integration for obvious reasons
of economies of scale. Currently, there are
few tools which exist for assessing and
managing health-care quality. Most of the
tools are rather basic, i.e. Pareto Chart, cause
and effect diagram, process flow diagram,
which are mostly adapted from other fields
(Hewitt, 1994; Chow and Goh, 1999).
However, most of these tools provide only a
static assessment of quality performance and
lack the much-needed ongoing performancemonitoring capability for immediate
corrective feedback.
Of traditional tools, the TQM philosophy is
the most commonly used concept for
managing quality, but this approach lacks a
performance-monitoring facet. In the field of
health care, Feeney and Zairi (1996) have
already proposed the use of TQM as a
framework for quality management.
McLaughlin (1998) has used Donabedian's

Clare Chow-Chua and

Mark Goh

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The authors
Clare Chow-Chua and Mark Goh are both at the Faculty
of Business Administration, Department of Decision
Sciences, National University of Singapore, Singapore.
Keywords
Kaizen, Quality, Health care, Hospitals
Abstract
Based on the research so far on quality improvement and
performance measurement on hospitals and the
health-care sector, there appears to be a need to combine
the various models or approaches to performance and
quality improvement. This paper presents a knowledgebased framework for evaluating the performance of a
hospital using a model based on the Singapore Quality
Award (SQA) criteria and the balanced scorecard (BSC)
approach. A specific case study of a public sector hospital
in Singapore is provided to illustrate how the SQA and the
BSC can be integrated to help a public sector hospital
implement and manage performance-based programs.
Overall, while limitations and implementation challenges
exist, the preliminary results suggest that hospitals can
also use this approach to their advantage, yielding
sustainable improvement in patient satisfaction and
better inter-departmental communication. Through this
framework, hospitals can make better quality decisions
based on structured measurement and knowledge.
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Managing Service Quality
Volume 12 . Number 1 . 2002 . pp. 5466
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DOI 10.1108/09604520210415399

54

Framework for evaluating performance and quality improvement

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Clare Chow-Chua and Mark Goh

(1980) quality matrix to assess ongoing

quality care. Again, this does not define the
specific linkages between cause and effect.
Donabedian's quality matrix only provides a
visual tool for the health-care provider to
assess its quality program with respect to an
existing quality control system.
Given this development, it suffices to
provide a motivation for us to propose in
this paper a conceptual framework to help
assess the quality on an ongoing basis by
taking cognisance of the dynamic
relationship between performance,
continuous improvement and quality of
service. As such, this paper uses the
Singapore Quality Award (SQA) model
(modelled after closely after Baldrige
Award) and balanced scorecard (BSC) to
develop a unified framework for translating
the award requirements into a set of
objectives and measures to achieve the
ultimate results required by the SQA, i.e.
operational excellence and customer
satisfaction. By itself, the SQA award is a
static computation of a company's
performance. One objective of the SQA is to
promote performance excellence and to
encourage a company to achieve it. While it
tells the company a need to achieve
operational excellence, it does not show
how to achieve it. Thus, this paper attempts
to redress this shortcoming.
Specifically, we use the context of hospitals
based in Singapore to bring to light how the
SQA can be further leveraged upon with some
other strategic tool like the BSC to capture
the effect on financial performance due to the
perceived impact of quality improvement
activities. The raison d'etre for this is simple.
Currently, there is little reported empirical
research on the impact of quality practices on
financial performance among hospitals in
Singapore, much less about the use of
innovative quality practices arising from a
knowledge-driven perspective. We posit that
TQM practices will have a direct positive
effect on financial performance and quality
improvement outcomes, be it incremental or
quantum. As rightly pointed out by Hansson
(2000), the ideas borrowed from the private
sector are already driving dramatic changes in
public hospitals in Singapore. Hansson also
asserts that there is, within public hospitals,
the growing recognition of creating
performance indicators to enhance

accountability to customers for the quality of

service.
In terms of the research approach, we seek
to evaluate TQM practices using the
established SQA criteria. The SQA criteria
will help to provide a systematic basis for
uniform comparison across the industry as
some organisations have based their internal
benchmarks on this framework. The key
issues we hope to address and that will
directly benefit the industry (in terms of their
improvement processes and systems) are as
follows. To what extent does the current set
of quality practices improve corporate
performance, the areas of improvement that
can be driven from a knowledge-based
platform, and to what extent do the practices
and financial performance correlate with each
other.
Through a case study, this paper then
presents a framework that integrates the SQA
criteria into the BSC approach to enable
organisations to monitor their quality
progress and measure performance of a public
hospital. The integrated approach has
managerial implications for realigning quality
concentrations to improve organisational
performance without severely influencing
operating costs, a methodology that is
previously not addressed in the quality
literature. Therefore, through this paper, we
hope to establish a unified framework that will
help hospitals make better quality decisions
based on structured measurement and
knowledge.

2. Previous research
While the research suggests that performance
management and measurement are critical,
particularly to health-based environments, to
prevent unnecessary cost overruns, most of
the research so far has focused on the US
health-care system and its peripherals. In this
section, we endeavour to highlight some of
the progress made in this regard. In one
stream of research, Luttman (1998) has
suggested a new quality paradigm which
enforces the Malcolm Baldrige criteria for
performance excellence to clinical processes.
Luttman (1998) has also provided some
principles and applications of integrated
performance measurement systems which can
be adapted to different levels of the
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Clare Chow-Chua and Mark Goh

organization for effective implementation.

Another stream proposed by Kaplan and
Norton (1992) suggests the need to rely on
the BSC. In particular, Chow et al. (1998)
also point out that many health
administrators value the benefit of the BSC as
a good management dashboard to health-care
organizations for both the hospital as a whole
and for the individual subunit.
The evidence of BSC on a unit has been
documented by Wahtel et al. (1999), who
showed that the BSC concept can be applied
to help manage a burn center and other
organizations to develop reasonable
performance measures and pursue longer
term visionary improvements. However,
moving from concept to practice is difficult.
For a start, performance metrics must be
installed in each key category to provide a
discrete set of macro-level indicators for
senior management. To some extent,
Curtright et al. (1999) have designed such a
system to assist the Mayo Clinic in
monitoring key performance indicators.
Mooraj et al. (1999) have even gone the extra
mile of questioning whether the BSC is really
needed and conclude that the BSC is a
necessary good, albeit the entire BSC
implementation process relies on formal and
informal processes for successful
implementation. On balance, the BSC, if
used properly, can help management better to
communicate the corporate strategy,
benchmark against other operations, and
prioritise and motivate other units in the
organization to common and longer term
goals.
Recently, Oliveira (2001) suggested the
need to combine the available approaches
with information-based capabilities,
particularly those related to data
warehousing. In this regard, Oliveira
advocates the use of BSC with data
warehousing. The results are two-fold. First,
the organisation's performance is measured
by the key objectives. Second, the critical
linkages between finance, human resources,
internal processes and customers are
established with respect to the corporate
strategies. Having ascertained this approach,
Oliveira also admits to the need for
substantial amounts of data for the BSC to
succeed. Independently, Curtright et al.
(1999) have recently argued that the new
wave of integrated health-care systems must

develop their own brand of methodology and

system to correctly align organisational
strategy with performance.
Aside from these, some of the other issues
to consider before implementing a BSC effort
include the difficulty in computing the cost
and benefits (Mooraj et al., 1999), applying
management controls at the strategic levels
(Curtwright et al., 1999), and the prevailing
organisational culture and structure (Pugh,
1993). We now look at the Malcolm Baldrige
and SQA models.

3. Malcolm Baldrige and Singapore

Quality Award models
The strategic intent of having a national
quality award is to promote awareness about
the importance of quality, to understand the
requirements for performance excellence, to
provide a standard of excellence that would
help companies achieve world-class quality,
to provide a benchmark as a best practice, and
to recognise quality achievement of
companies (Goh, 1996).
Since its inception in the US Congress in
1987 to promote quality awareness towards
performance excellence, the Malcolm
Baldrige National Quality Award (MBNQA)
is now been accepted widely as a standard for
performance excellence, measured along the
lines of leadership, strategic planning,
customer and market focus, information and
analysis, human resource focus, process
management, and business results.
Specifically, the MBNQA sets out to achieve
four main objectives, namely, to encourage
US firms to embrace quality, to recognize an
organization's commitment to quality and set
a benchmark for others to follow, to establish
guiding principles and criteria that
organizations can use in evaluating their own
quality improvement efforts, and to publicize
successful performance and quality strategies
(Haavind, 1992).
As envisioned, this award was positioned as
a bearer of excellence that would help US
firms achieve world-class quality. Today, the
award is widely accepted and many other
national quality award models have been
fashioned after it (Goh, 1996). On the
benefits side, US organizations that have
received the award were reported to have
experienced lower costs, better customer and
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processes, and the strategic plan. These are

briefly mentioned below.
.
The leadership and quality culture
criterion focuses on top management
commitment towards quality. It requires
commitment in setting clear and visible
goals, creating and sustaining quality
values and systems, reviewing
performance and recognizing employee
participation and achievements.
.
The use of the information and analysis
criterion emphasizes presentation of data
and information to improve operational
and competitive performance.
.
The strategic planning criterion looks at
the organisation's strategic planning
process and the integration of key
requirements into overall business
planning.
.
The human resource development and
management criterion concentrates on
the development and management of
people in the organisation, including
training.
.
The management of process quality
criterion emphasizes how an organisation
improves its processes through improving
its quality and operational performance.
.
The quality and operational results
criterion measures the levels of
improvement in quality and operational
performance.
.
The customer focus and satisfaction
criterion measures the organisation's
knowledge of customer requirements,
customer satisfaction measurements, and
relationship with customers.

employee retention, and improved

profitability (George, 1992).
Prior to 1999, only the profit-generating
enterprises in the services, manufacturing,
small business sectors were eligible to apply
for the award. Since 1999, however, nonprofit organizations like those in education
and health-care institutes were eligible to
apply for the award. This is in recognition of
the increasing costs of health-care and a need
to improve performance in this sector. It was
reasoned that the guiding principles
embodied in the original Baldrige Award
would be able to meet the twin challenges of
cost containment and performance
improvement (Hertz et al., 1994). Currently,
there are newly established Baldrige Health
Care Criteria for performance excellence
which has been specially tailored for the
health-care providers (National Institute of
Science and Technology, 2001).
In Singapore, the relentless interest in,
hunger for, and recognition of superior
quality is akin to that experienced in the USA.
In fact, the SQA model, as shown in Figure 1,
is adapted from the MBNQA. We now review
the SQA model.
The SQA model is a comprehensive model
that covers seven categories: leadership and
quality culture, use of information and
analysis, strategic planning, human resources
development and management, management
of process quality, quality and operational
results, and customer focus and satisfaction.
Performance is measured in terms of two core
results: operations and customers. The
leadership and the quality culture of the
organization drive these results. The drivers
influence the results through the factors of
data and information, the workforce, the

In the SQA model, data and information,

workforce and strategic plan directly affect
performance as with the processes. All four

Figure 1 SQA model

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factors are placed on the same footing and the

SQA model focuses heavily on the customer
satisfaction in determining performance.
Another significant difference between the
SQA and the MBNQA is the difference in the
weights of the award categories. For example,
the leadership category is allocated 100 points
under the MBNQA but it is given 150 points
under the SQA (see Table I).

(2000). As a digression, it is interesting to

note that Griffith (2000) labels those who
consistently score high as champions.
Using data extracted from the Internet, we
applied the SQA criteria on ten hospitals in
Singapore based on bed size, namely: large
(more than 500 beds), medium (between 100
and 500 beds) and small (less than 100 beds).
Five hospitals are found to be ISO 9000
certified (see Table II). Using the SQA
scoring approach, we found that the small and
medium-sized hospitals were mostly medium
scorers, while the large-sized hospitals were
high scorers (Figure 2). Indeed, large
hospitals scored higher in all the SQA criteria
compared to the other hospitals. Looking at
the financial performance, we also observe
better performance for large-sized hospitals
(see Table III). However, given the lack of
good data, we could not perform further
statistical testing to confirm this observation.
While the SQA criteria include many
factors that contribute to financial
performance, it still lacks the capability of
linking the strategic goals with the specific
performance indicators related to quality. As
such, integration of the SQA framework with
some other strategic management tool is
needed. The integration should be able to
provide a comprehensive framework for
linking business indicators and management
of quality through the SQA categories to
enable an organisation to sustain its
competitive edge and improve quality,
thereby yielding total customer satisfaction.

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4. Using SQA as excellence roadmap for

hospitals
We now show how organisations that undergo
the SQA evaluation process are assessed and
classified. To broadly classify the relative
quality ranking of such organisations, the
assessing body classifies organisations that
score less than 40 per cent in each SQA
category as low scorers. The medium
performers are the ones that score between 40
per cent and 70 per cent in each SQA
criterion. Naturally, a high scorer would have
to earn at least 70 per cent in each SQA
criterion. In short, to qualify for the quality
class membership, an organisation must score
at least 400 points out of a total of 1,000
points. The organisations that are medium
scorers would be offered membership to
Singapore Quality Class by the Productivity
and Standards Board (PSB). Such members
can then obtain support from the PSB to
upgrade their operations. Currently, all SQA
award holders are grouped as high scorers. To
date, these are Texas Instruments Singapore
(1995), Asia Pacific Paging Subscriber
Division of Motorola Electronics (1996),
Baxter Healthcare (1997), the Singapore
Housing & Development Board (1997),
Philips Singapore (Tuner Factory) (1998),
PSA Corporation (1999), ST
Microelectronics (1999), Citibank (2000)
and Philips Electronics Singapore Pte Ltd

5. Linking SQA and BSC

In today's competitive market, managers are
more aware of the intangible values within
their organisation, which are the unknown
and untapped treasures of knowledge, knowhow, and best practices to maximize

Table I Comparison of MBNQA and SQA

Malcolm Baldrige National Quality Award
1.
2.
3.
4.
5.
6.
7.

Leadership
Information and analysis
Strategic quality planning
Human resource utilization
Quality assurance of products and services
Quality results
Customer satisfaction

Points Singapore Quality Award

100
70
60
150
140
180
300

Leadership and quality culture

Use of information and analysis
Strategic planning
Human resources development and management
Management of process quality
Quality and operational results
Customer focus and satisfaction

58

Points
150
80
70
160
140
150
250

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Table II Profile of hospitals

Size

Population

Sample

(%)

5
8
7

1
4
5

(20)
(50)
(71)

Small
Medium
Large

ISO 9000 certified

Yes
No
0
2
3

1
2
2

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Figure 2 Evaluation of hospitals based on SQA criteria

highlight the balance between operational

indicators on the one hand and financial
indicators on the other. Keeping these sets of
indicators on an even keel will prevent the
over-emphasis of one set of indicators, thus
allaying the threat of organisational functional
myopia. Used properly, the BSC can act as a
rich source of information and knowledge,
and serves to ensure that participants in the
knowledge-management process (managers,
patients and doctors) are able to
communicate smoothly across these
relationships (Duffy, 2000).
The data needed to implement the BSC are
usually culled from the financial aspect of the
organisation, the delivery process and
customer feedback. A delicate balance
straddles these dimensions. For instance,
financial data measure the financial capability
of the organisation and that includes
information on cost, return on investment,
revenue and economic value added. Data
collected from the customer include customer
orders and expectations, perceived value,
customer satisfaction, retention, market, and
account share and measures the

Table III Average financial performance of hospitals

Financial indicators

Small

Hospital size
Medium

Net profit margin

Current ratio
Debt-to-asset ratio
ROI

0.062
0.226
1.373
0.140

0.856
2.551
0.359
0.557

Large
1.012
2.270
0.280
0.603

performance. The credit for this belongs to

Kaplan and Norton (1992), who were among
the first to suggest a complete approach to
assessing a company's overall performance
based on a totality of criteria rather the usual
traditional single criterion.
Using the BSC approach, we integrate the
SQA model and unite this knowledge base to
provide a better conceptual framework and
added benefits to organisations in terms of
market share gains, customer satisfaction, and
organisational excellence. The BSC, a
reporting tool with a discrete set of
macro-level indicators, provides management
with a quick, comprehensive glimpse of
organisational performance in meeting its
organisational goals. As espoused by Kaplan
and Norton (1996), the BSC is a good tool to
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Volume 12 . Number 1 . 2002 . 5466

organisation's capability in delivery of quality

service. Data from the process include
quality, response time, cost, and new product
introduction and measures the ability to
produce quality goods and services efficiently.
The intent of marrying the BSC with the
SQA would be to utilize better the repository
of resources available to a hospital and ensure
that the organisation's performance is not
compromised by over-zealousness in pursuing
quality objectives (Crane and Crane, 2000).
Also, the BSC approach is useful for
managing knowledge (see Figure 3) by
tracking existing knowledge of variances in
patient care, service gaps, and patient
satisfaction levels. As such, the integrated
system can support a hospital's corporate
objectives and revenue generation by stressing
better, faster and cheaper care with a strong

emphasis on human interaction. A properly

established system will also assist in
continuous improvement by addressing these
queries: ``know how,'' ``know what'', ``know
who'', ``know where'', and ``know why''.
Knowing these will help to streamline the
organisation's internal processes.
As shown in Figure 3, the SQA model can
be regrouped into three broad categories:
driver; system; and results. Under the driver
category, we have the ``leadership and quality
culture'' criterion. ``Use of information and
analysis'', ``strategic planning'', ``human
resources development and management''
and ``management of process quality'' criteria
fall under the system category. As for the
results category, we have the ``quality and
operational results'' and ``customer focus and
satisfaction'' criteria. Now we integrate the

Figure 3 Linking SQA model to BSC

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SQA criteria into the BSC by taking the three

categories and incorporate them into another
set of scorecards defined by similar names.
We also add one more perspective which is
knowledge management. These four
perspectives of the integrated framework are
inter-related in terms of performance
measures. Under each of the perspectives, the
administrator then has to identify the key
performance indicators, which align with the
objectives or mission of the organisation.
We now illustrate the integrated framework
with a case study on Changi General Hospital
(CGH), a large public hospital in Singapore,
to understand better some reasons for CGH's
improvement in quality performance and
CGH's implementation challenges.

People Developer Standard[3], five Years

Outstanding SHARE Program Award[4] and
the Volunteers 1998 Tribute Award. In the
same year, CGH became the first hospital to
be recognized for its environmental awareness
through the certification of ISO 14001. Its
goal is to improve patient care through caring
for the environment. In 1999, the Singapore
Environment Council also presented the
Singapore Environmental Achievement
Award to CGH in recognition of CGH's
environmental contributions.
In all, CGH has achieved remarkable
performance through its commitment to
quality, which is on five principles of quality,
namely, ``bringing quality to a personal level'',
``adopting a framework for world class
quality'', ``a balanced approach to quality'',
``learning from the best'' and ``training and
empowering staff for the quality
challenge''[5]. To inspire quality at the
personnel level, CGH has constructed a
quality statement to stimulate staff by evoking
the urgency to meet patient care needs. In
addition, CGH has adopted the SQA model
of business excellence to assist it in fulfilling
its quality mission. CGH has also used the
approach to monitor its progress to improve
continuously its service to patients. This
approach provides an instrumental gauge to
monitor key performance indicators of CGH
and helps CGH to perform better
benchmarking of the delivery process. CGH is
a firm believer of learning from world class
organisations like the Ritz Carlton, Citibank,
Brigham Young's Women Hospital (USA),
Beth Israel Hospital (USA), McDonald's and
Singapore Airlines. CGH has also
benchmarked itself against other hospitals
outside Singapore, based on 13 key indicators
derived from the Maryland Quality Indicator
Project.
Further, CGH recognizes the importance of
staff management as a critical success factor
in its pursuit of quality. It offers extensive
training for all staff in service quality, quality
circle training, and other functional-related
training so that they have the necessary skills
to address any quality dispute. Since 1991,
CGH has initiated a total corporate quality
program where quality Ccircles are used for
problem solving. Staff are trained to exercise
empowerment. CGH bestows rewards and
recognition to staff for their quality effort.

6. CGH's excellence journey

CGH began operations in 1959 with a total of
396 beds, two doctors, seven nurses, 16
admissions and 27 outpatients. Since then,
CGH has grown to a total of 801 beds with 23
wards, and 16 specialist clinics with 64
consultation rooms catering to outpatient
needs.
In 1992, CGH embarked on a quality
journey by spearheading the service quality
(SQ) club. In 1993, it crafted the first quality
statement with an emphasis on providing a
level of care good enough for mothers without
special arrangement. In 1995, CGH was
awarded the National Productivity Award and
the Outstanding QC Organisation of the Year
Award. In the same year, it managed to
achieve the lowest average length of patient
stay of 4.8 days in Singapore. In 1996, CGH
achieved ISO 9002 certification. In 1997,
CGH was accredited the prestigious
Singapore Quality Class for its quality
excellence and received the National Training
Award. After restructuring in 1998, the
corporate mission was revised as follows: to
improve the health of the community by
providing comprehensive and affordable
health care to meet the needs of the
community living in the East of Singapore[1].
Its quality purpose now is to provide a level of
patient care and services good enough for
mothers without the need for special
arrangements.
In 1998, the hospital received more awards,
namely, the Family Friendly Firm Award[2],
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CGH adopted the SQA framework in 1994

as a guide for its quality journey. Under the
SQA scoring criteria, CGH is a medium
scorer. The SQA framework proved to be
helpful as a roadmap to excellence as CGH
was among the first to receive membership to
the Singapore Quality Class in 1997. Table
IV shows the quality indicators reviewed by
the quality steering committee (QSC). Most
of the performance indicators presented by
Table IV are related to service quality, with a
particular focus on time management. Based
on this set of performance indicators, CGH
then carefully maps programs to support each
indicator. For example, under the
management process quality criterion, CGH
has implemented several IT systems such as
specialist outpatient clinic information system
(SOCIS), SAP in-patient and enterprise
resource planning system to improve
efficiency in the retrieval of patient records.
CGH has made it a priority to develop its IT
capabilities to support the information
management system.
In line with providing a comprehensive
overall set of performance indicators, CGH
has also adopted a BSC approach to
supplement its quality effort, focusing on the
four perspectives of Kaplan and Norton's
(1992) BSC archetype, i.e. financial,
customer, internal business and innovation.
CGH has systematically developed through
its strategic planning process a new mission
statement, operational since March 1998.

The strategic plan of the hospital has two

main thrusts. The first describes CGH's
curative roles and has greater impact in the
near future. They include CGH's ability to
provide comprehensive and appropriate
health care that is accessible, affordable and
good. The second describes CGH's
preventive role, i.e. to improve the
community's health. In essence, CGH aims
to be better, faster and cheaper than
competition. To achieve the goals set out in
the strategic plan, having performance
measures that can both gauge progress and
provide feedback to focus efforts toward
continuing improvement is crucial.
CGH used to track 11 service indicators
and six clinical indicators monthly, and the
results were reviewed monthly by the quality
steering committee. While these indicators
describe the efficiencies of some of the key
operating departments in the hospital (e.g.
specialist clinics, laboratory, radiology,
pharmacy and A&E) and the outcomes,
indicators related to other dimensions of the
hospital's mission (e.g. affordable,
comprehensive) and ultimate success (e.g.
financial performance, market share,
customer loyalty) are missing. Hence, there is
a strategic need for a better scorecard for
review by the QSC. Put simply, the BSC is
intended to provide a more balanced view
through a handful of measures that are most
critical to CGH's mission, and to track
CGH's progress towards attaining established
goals.

Table IV Quality indicators reviewed by QSC

S/n Type

Performance indicators

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.

SC lead time for appointment

SC waiting time for consultation
Waiting time at A&E
Retail pharmacy waiting time
Waiting time for elective operation
Patient seen without case notes
Completion of medical records
Discharged summaries
Turnaround time for laboratory reports
Turnaround time for X-ray reports
Patient feedback recommendation rates
Unplanned returns to OT in 72 hours
Unplanned returns to A&E in 72 hours
Unplanned admission after day surgery
MRSA infection
No. of bedsores developed in wards
Patient falls in wards

Service quality
Service quality
Service quality
Service quality
Service quality
Service quality
Service quality
Service quality
Service quality
Service quality
Service quality
Clinical quality
Clinical quality
Clinical quality
Clinical quality
Clinical quality
Clinical quality

7. CGH's BSC journey

In October 1998, CGH initiated a corporate
effort to restructure the tracking of key
performance indicators using the BSC
approach. These indicators are cascaded
down to departmental scorecards for all
administrative, operations, and clinical
departments. The quality management office
was responsible for completing a review of
departmental action plans and key
performance indicators with heads of
departments to assist in the development of
their scorecards.
The key performance indicators (KPIs) are
designed to track progress in the various
components of CGH's strategy. The
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Clare Chow-Chua and Mark Goh

by clinical services to gauge the rate of

outward referrals.
(4) ``Cheaper'' dimension indicators. Health
services that are affordable and provide
value for money are equally important
factors for patients. Two indicators are
proposed, i.e. average bill size (in-patient
and outpatient), and average length of
stay. Both indicators are available
through the MOH's quarterly workload
reports, with competitive benchmarking
to other government restructured
hospitals. This dimension relates to the
affordability aspect of CGH's mission.
(5) Patient satisfaction. Central to this
framework is patient satisfaction. High
patient satisfaction is likely to result in
higher measurements in the overall
indicators of success. Several indicators
highlighted in (1) to (4) have a cause and
effect relationship on patient satisfaction.
A proxy used by CGH for patient
satisfaction is patient recommendation
rates, which may be obtained through the
analysis of patient feedback returns.

components of this scorecard can be stated as

follows:
(1) ``Overall corporate'' dimension indicators of
success. These are measures that tell the
results of actions already taken. Three
indicators are proposed, including net
income/contribution margin and
customer loyalty/retention rates. The
information on market share in the
eastern sector/Singapore data for the
computation of net income/contribution
margin is available monthly through
CGH's financial systems. Market share
information for the population of
hospitals is available quarterly from the
Ministry of Health's (MOH) workload
report, which facilitates competitive
benchmarking with other restructured
hospitals. Customer loyalty is estimated
using an indicator that measures the
percentage of ex-patients among the pool
of new patients, i.e. patient retention rate.
This indicator also provides additional
information on the rate that CGH is
attracting new business.
(2) ``Better'' dimension indicators. Patients
judge a hospital's service to be better than
another when the treatments received are
appropriate, clinical outcome is good,
services are accessible and lead-time to
see a doctor is short. Hence, three
indicators are proposed: clinical
outcomes unplanned returns to CGH
over time, A&E and from admissions
accessibility telephone service factor
(TSF) and calls abandon rates and lead
time for appointments. All three
indicators are currently tracked by the
QSC. The TSF and call abandon rates
indicators allow generic benchmarking
with service excellent companies like
Singapore Airlines. This dimension
relates directly to the good, accessible,
appropriate and comprehensive aspects of
CGH's mission.
(3) ``Faster'' dimension indicators. In addition
to efficacious health services, patients
expect their experiences to be hassle-free
and be served expeditiously. Two
indicators are proposed, namely, total
turnaround time for outpatient services
rate and referral of patients out of CGH
due to lack of services. An initial study on
total turnaround time for outpatient was
conducted in May 1998. About the same
time, a special study was also carried out

Quality indicators that are not included in this

framework for CGH corporate BSC are
tracked at the departmental level via the
respective departmental scorecards.
This proposed framework and the
corresponding KPIs provide the initial
impetus for the CGH BSC effort. Analogous
to the cost of quality initiative drive, these
indicators are continually reviewed, refined
and replaced with better measurements when
they become available.

8. CGH's BSC implementation

CGH's performance for each dimension is
tracked against established targets and
national averages for similar acute care
hospitals. The scorecard is presented to the
quality steering committee on a quarterly
basis, as several indicators used in the BSC
are constructed from the Singapore Ministry
of Health's (MOH) quarterly statistical
report.
In the implementation of the BSC
approach, it was found that communication
of the scorecard to staff is just as important as
the accurate and reliable collection of data for
key performance indicators. Staff need to be
aware of the performance of the hospital in
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Clare Chow-Chua and Mark Goh

key dimensions so that they may align their

individual and departmental efforts toward
improving areas that are found lacking. To
this end, the steering committee developed a
version of the corporate BSC that is accessible
to staff of CGH using a Web browser. The
latest updates to key performance indicators
are also obtainable through this means. This
is consistent with the comments of Lanser
(2000) who mentioned that for the
organisation to move in the same direction
toward the corporate goals, communications
must be formalized on a regular basis.
Likewise, performance and operations data
should be shared frequently so that issues and
trends are detected early.
Further, at the departmental level, all
departments have a departmental BSC
organised around the same dimensions of
``better'', ``faster'' and ``cheaper''. These
scorecards are reviewed by the respective
administrators and are updated to a
Web-based version for access by all other
staff. By monitoring progress in this
incremental mode, issues and areas of
performance concern can be addressed while
they are relatively minor and at the functional
level. In addition to identifying the
problematic areas in organisational
performance, it can also serve to provide
information about organisational functioning
(Crane and Crane, 2000).
The choice of key performance indicators
for the corporate BSC and the departmental
scorecards are subject to periodic review.
Where more effective and relevant indicators
become available, recommendations are
made to the quality steering committee and
the respective heads of departments to adopt
them. However, preliminary communication
reveals that all departments purport to have
KPIs to monitor progress towards achieving
goals set out in their departments, even
though few formally report them on a regular
basis for review (Foo, 1999).

within and across departments whenever

change is involved (Pugh, 1993). An
environment that supports and motivates
teamwork, and cross-functional evaluation of
performance helps employees to learn more
about the organisation and helps ensure the
success of the BSC approach. Second,
hospital management must be highly
committed, as involving two very
time-consuming measurement processes
(SQA and BSC) for performance
improvement would require wholehearted
endorsement from senior management.
Indeed, senior management must be an
integral part of the process or be seen as
champions of the implementation initiative.
Third, management should establish a clear
understanding of the measures of
departmental and organisational success and
how the results of the SQA and BSC
approaches can be put to good use.
Implementing the BSC approach or assessing
the organisation along the SQA criteria is a
form of change that requires the guidance and
support of the organisation's top leadership.
Fourth, managing and measuring
performance and quality will become
increasingly complex and multi-dimensional.
There is a need to develop a sound
methodology and system to align
organisational strategies with good
performance management and measurement.
The BSC approach, or what Curtwright et al.
(1999) call dashboard reporting, is only one
mechanism. There is need for more such
mechanisms which are customised to the
organisation's peculiar operating
environment. Fifth, with the SQA criteria and
BSC approach, the role of middle
management is re-defined. The traditional
view of middle managers in public hospitals in
Singapore is that they are relatively weak, with
relatively little power to do anything other
than pass communications up and down the
hierarchy. Implementing the BSC down to
the departmental levels will see middle
managers personally undertaking more
important roles of performance improvement
and measurement, and be true stakeholders in
the process. While senior management needs
to conceptualise the framework, it is still the
middle managers who have to operationalise
the framework and make it meaningful to the
stakeholders involved.

9. Managerial implications and

concluding remarks
There are several management implications
for the successful implementation of the
framework described thus far.
First, it is essential that the organisational
culture encourages and supports teamwork
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Clare Chow-Chua and Mark Goh

For this case study, one limitation is the

extensive period of time involved in
implementation and execution of the
knowledge-based platform. In the case of
CGH, developing a knowledge-based
platform for performance management
involves time which can tire the nurses,
doctors and hospital administrators who are
already burdened with too much
administrative baggage. The other limitation
to this study is that of cost. With hospital
administrators expected to do more for less, it
is difficult to foresee complete and thorough
follow-through of the new framework.
Nevertheless, there is no standard
cookbook approach to implementing quality
improvement and performance. CGH has
shown that adopting the SQA criteria
requires certain ingredients for success, i.e.
strong leadership and customer focus,
commitment to employee training,
empowerment, involvement, and application
of TQM techniques in problem solving to
foster continuous improvement. We have
described a holistic approach that marries
the SQA model of business excellence with
the BSC approach. The use of the BSC
approach will help management to have a
balanced view of various dimensions that are
deemed critical to the mission of CGH. It
also helps in the alignment of departmental
and individual staff effort through the
departmental BSCs. The management of
CGH firmly believes that measures will drive
behaviour (Foo, 1999). Through this case
study, we have established an effective and
comprehensive framework that will help
hospitals to make better performance
evaluation based on knowledge
management. The indicators developed can
be used for both senior and middle
management to obtain a comprehensive
glimpse of the organisation's performance in
meeting its quality, operational and financial
goals. Future work will focus on
transplanting this framework to other
hospitals in Singapore and the region.

policies, i.e. flexi-time schemes, free employee

health screening services, and on-site child-care
facilities.
3 This award is the national standard for human
resource development. Winning the award puts
CGH in an advantage in view of special support and
assistance from the PSB and other agencies for staff
training.
4 It is awarded by Community Chest, recognizing the
spirit of giving by hospital staff.
5 http://www.cgh.com.sg/quality/quality_main.html

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Notes
1 http://www.cgh.com.sg/about_cgh/intro/
intro_main.html
2 Award was conferred by the National Employers
Federation based on CGH's outstanding pro-family

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Clare Chow-Chua and Mark Goh

Managing Service Quality

Volume 12 . Number 1 . 2002 . 5466

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