What is Healthcare Performance Management?

A Performance Management process aims at improving employee performance, building high performing workforce and delivering high quality services. With a systematic approach, a healthcare organization can manage medical activities efficiently and promote service quality improvement.

Performance Management can be also described as the discipline of setting goals; establishing responsibility, accountability, and monitoring; analysing outcomes; implementing governance; and ultimately, improving performance. There are common measures of performance within and across different organizations and industries, but fundamentally, they must be closely aligned with an organization’s strategic objectives.

Healthcare performance measurements are aggregated, quantified and analysed data on a particular healthcare-related activity. Their purpose is to identify opportunities for reducing costs, improving quality of care and increasing efficiency of care delivery. It is an on-going process.

Here we have shown Performance Management pyramid, which explains the relationship between strategic planning and performance management: the latter are processes, measures, and actions to help ensure that the vision, strategy, and goals set by the organization are achieved.

Performance management particularly in healthcare is very critical as there are needs to deliver high quality and cost effective services like:

Patient outcomes, including health, quality of life, and mortality, are directly related to performance; and,

The complexity, variability, and cost inherent in delivering healthcare services make it difficult to simultaneously prioritize

A) time spent on performance tracking by front-line providers and employees,

B) investments in performance management by senior management, and

 C) investments in activities that seem to more directly improve patient care.

Another reason for the acceptance of performance management may be good principles but often falls short in improving organizational outcome.

Performance management is used in different context like, organisation performance management, individual performance management, technology performance management and system performance management. Herewe will discuss about an organization performance management. Every hospital organization wants to be on the top in various terms such as, financial, quality of care and latest technological advancements. Across the world the main responsibility of the hospitals is to ensure effective treatment of patients and finest care during their stay with hospital organisation. But there is always pressure of limited human and infrastructure resources. That is the biggest challenge faced by health care providers in the organization. With the help of performance management in the healthcare organisation you can identify the areas of performance improvement, planning systematic performance, improvement initiative and setting targets.

In healthcare organization performance management is structured by multiple dimensions such as efficiency, economy and effective because of many stack holders as doctors, entrepreneurs, trusts with conflicting or overlapping interests. Rising in competition, has increased pressure on margins, departmental cost and profitability. With the help of performance management, any healthcare organization can overcome these challenges easily to get desired outcome.

Potential Zones where performance in healthcare organization can be estimated are:

Economical: Revenue streaming, efficiency changes, handling, waste and cost control, movement based costing.

Economy: Partner management and estimating, joint effort openings, readiness changes, working capital and resource management.

Proficiency: Provider encounter estimation, supplier dependability and voice of supplier, learning and development measures, advancement, culture.

Adequacy: Including quiet understanding, engagement, pleasure, devotion, estimating and following voice of patient.

Viability: Measuring and building up the developmental significance of social insurance marketing and confidence in management and patient lifetime esteem.

Performance Management Cycle in Healthcare Organization:

  1. Monitoring and measuring of organizational performance
  2. Analysing reporting
  3. Planning and Forecasting

What are the Benefits of Performance Management in Healthcare?

Performance Management helps healthcare organizations ensure that their goals are consistently met in an effective and efficient manner. More specifically, it can help them achieve goals in areas such as patient-centred care, accountability, quality, cost management, and data management.  Reasons why an organization may choose to measure its performance are mentioned below:

  • Distinguish what appears to be happening from what is really happening
  • Establish a baseline; i.e., measure before improvements are made
  • Make decisions based on solid evidence
  • Demonstrate that changes lead to improvements
  • Allow performance comparisons across sites
  • Monitor process changes to ensure improvements are sustained over time
  • Recognize improved performance

Through the process of building and executing a Performance Management Plan, organizations often establish and continuously refine metrics and standards, reporting, budgeting, and governance.

For example, an organization that establishes increased patient volume without increasing wait times as one of its strategic goals may need to:

  • Ensure that its data collection efforts adequately measure the attributes needed to accurately determine patient volume and wait times;
  • Determine the resources required for monitoring and reporting;
  • Design and implement process changes and stand up both human and technological capital to perform the reporting activities;
  • Carefully plan and manage the organizational changes which might be required; and,
  • Review its Data and IT Governance structure to ensure successful oversight and accountability for the entire process.

Thus, Performance Management goals need to align with both an organization’s strategic goals as well as with its current and future capabilities. Often, a Performance Maturity Model (PMM) is used to communicate an organization’s current Performance Management capabilities, and to define its future goals for Performance Management improvement. There are many models available, but most are adapted from the classic Capability Maturity Model:

Finally, there may be additional motives for a healthcare organization to measure its performance:

  • Accreditation: Government-accrediting organizations and funding sources rely on performance measure to prove resources are used effectively and efficiently.
  • Fundraising: Fundraising success is increasingly tied to documented performance measures.
  • Transparency: Stakeholders such as patients and payers increasingly want to see additional measures of the quality of care being provided

How to identify what performance aspect needs focus on?

Performance measurements should be a good indicator of progress towards a strategic goal, and should be realistic and reasonable given the current capabilities of the organization. As an example, a large hospital system will typically look at many performance measures across different service and care areas to meet regulatory reporting requirements and internal organizational goals. Examples of potential performance measures include: 

  • Healthcare Association Infection
  • Emergency room
  • Patient and family experience of care

Current trends in performance management in healthcare:

Now a day major healthcare organizations the power of performance management approaches for better decision making driven by latest technological development like electronic health record. This helps to achieve results as fast as possible. In simple terminology electronic health records are digital version of paper, charts etc. in hospitals. It contains medical and history of the patients in one practice. Measuring performance in EMR is very important yet challenging

 Primary and secondary data is gathered through stakeholder interviews and artefact reviews, followed by in-depth analysis and evaluation. The assessment is an iterative process, with the assessment team and the organization’s management team working together to identify assessment objectives, reconcile findings with expectations, and formulate recommendations and an improvement plan. The assessment team may continueto be involved in implementing, monitoring, and improving the performance plan.


The impact of well implemented performance management systems in healthcare industry can be enormous. Performance management in healthcare is a systematic process to improve the effectiveness of the organization to achieve the organization’s mission and strategic goal. With implementing performance management u can improve quality, cut cost and get better results. It enables health department more efficient, effective, transparent and accountable.Advancement in technology and analytical methods has made use of large scale information system for performance assessment an improvement increasingly feasible.

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