J. Multidiscip. Res. Healthcare

Introducing Performance management in Secondary Government hospitals in Kerala and Tamil Nadu using the Balanced Scorecard framework

K. Ellangovan and T. J. Kamalanabhan

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Performance of hospitals, Balanced Score Card, Decentralized Planning

PUBLISHER The Author(s) 2014. This article is published with open access at www.chitkara.edu.in/publications

Kerala has introduced decentralized planning for more than a decade now. As part of this, the Local Self Governments (Panchayat Raj Institutions) are vested with the responsibility to run the hospitals. The new element of elected representatives coming in the area of hospital administration has created more confusion than before. Similarly, Tamil Nadu has implemented a hospital systems project to improve the performance of secondary care hospitals. This paper tries to analyze whether one of the popular performance assessment tool - Balanced Score Card could be used to create a better administrative environment to improve the performance of the secondary care hospital. The paper conclusively argues that, Balanced Score Card is an important option for these hospitals to improve their performance.


Health care is an important public service. Enhancement of the health of people must be accepted more or less universally to be a major objective of the process of development Sen (1999). However despite India entering an impressive economic growth trajectory of around 8% in the recent past, no corresponding achievement is seen in the health sector. Performance of health care sector has placed India at 118th position in a list of 191 member countries based on the achievements in key functions and objectives of health systems (World Health report, 2000).

Health sector in India is facing number of challenges: absence of a comprehensive health policy, loose regulatory mechanisms, inadequate budgetary allocation, improper man power planning, large scale absenteeism, infrastructure inadequacies, low-accountability, poor management of the Public Health Institutions (PHI) have all contributed in varying proportions to the underperformance. Increase in noncommunicable diseases like Diabetes, Cardio-vascular accidents, re-emergence of tuberculosis, high incidence of HIV, hepatitis and other life style diseases, in addition to other health indicators like, high infant mortality, high maternal mortality, low life expectancy and low percentage of immunization further poses serious challenges to the health sector [ramani and Mavalankar(2006), Bonu and rani(2008)].

Personal cost of healthcare in India is one of the highest in the world. National Sample Survey (60th round) in 2004 identified 63 million individuals (12 million households) falling into poverty due to health expenditures (6.2% of all households). About 79% of them spent on out-patient care, drugs and the remaining 21% due to costs associated with hospitalization. In some states, such as Uttar Pradesh, Maharashtra and West Bengal over 8% of households were impoverished as a result of health expenditures Peters et al (2002) found that on an average those who are hospitalized spend about 58 % of their total annual expenditure on health care, and more than 40 % have to borrow money by selling assets to cover expenditure.

Governing principles on health are equity, access, quality and cost effectiveness. On the issue of equity and accessibility, poor in India suffer more. Though the government hospitals are the centers of first call, long queues, difficulty of getting in, unavailability of specialist services, cost of drugs along with huge opportunity cost due to delay in getting service makes them seek services in private hospitals (Jeffery et al 2010).

However government hospitals also have several problems. They are remotely administered. Major decisions on procurement and development are taken at the state level. Unavailability of timely funds, inadequate delegation, low staff motivation, supply-chain breakdown, trade unionism, poor sharing of knowledge are some of them. In the normal practice, orders are issued from the top and seldom feedback are considered or factored in to the policy making. The leadership’s ability to influence colleagues and coordinate activities between departments are often absent in government hospitals. Central to all these issues is the lack of any credible performance evaluation system with incentives and disincentives built in.

This paper aims to understand the functioning of the government secondary hospitals in the state of Kerala and Tamil Nadu. The reason for choosing these states is that, hospitals here are administered reasonably well indicated by the improved health parameters. The paper provides a policy prescription to put in place a performance management system in these hospitals.While analysing various options available for evaluating organisational performance, effort is made to select the one that suits the Indian context. Of all the models examined, Balance Scorecard framework is found to be suitable for the Indian context

This paper is organised as follows: Section 2 describes the policy issue and underlying contributing factors. The Section 3 discusses the objectives and constraints. Section 4 explores all possible and available prescriptions and discusses relative strengths and weakness of them. Section 5 deals with the evaluation of selected policy alternative including the implementation schedule. Section 6 has evaluated the Policy environment by through stakeholder’s analysis, communication issues and the political context in which this policy alternative will be implemented. Relevant material that could not form the body of the paper is enclosed in the annexures and finally the reference section acknowledges the sources and authors from where information was obtained.

Page(s) 1–18
URL http://dspace.chitkara.edu.in/jspui/bitstream/1/570/3/110001_JMRH_Ellangovan.pdf
ISSN Print : 2393-8536, Online : 2393-8544
DOI https://doi.org/10.15415/jmrh.2014.11001

Introducing a performance evaluation system in secondary hospitals will bring in to focus the underlying factors contributing to performance. Hospitals could be incentivized through financial outlays depending on their performance. The efficiency and effectiveness of hospitals will directly contribute to the wellness of the community to which it serves. As a result, prevalence of disease in the community could come down. Even out of pocket expenses will be much lower than the present level. To a large extent the issue of equity will be redressed as participation of the community is monitored in the programme. Individuals in the hospitals will be become aware of their obligation to the community by way of increased responsibility and accountability.

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