Using Structural Equation Modeling to Examine Causal Relations Among Performance Indicators in the Balanced Scorecard Framework for General Hospitals: The Case of a Public Hospital System
Date Issued
2004
Date
2004
Author(s)
Tung, Yu-Chi
DOI
zh-TW
Abstract
Objective: The objective of this study was to use a public hospital system as an example to examine causal relations among performance indicators in the balanced scorecard (BSC) framework by way of structural equation modeling (SEM). Indicators studied include leading and lagging indicators of non-financial and financial performance.
Methods: This was a retrospective and longitudinal study combing primary and secondary data to explore causal relations and the magnitude of impact among four perspectives of indicators. Those four perspectives were hospital’s learning and growth, internal process, customer, and financial perspectives. The unit of analysis was the hospital. Data was collected from 21 general hospitals in a public hospital system for the 3-year period, 2000-2002. For primary data, a structured questionnaire was mailed to chief executive officers of study hospitals. There are two major parts of it: whether and when hospitals adopted any management activities, and quantifiable and collectable indicators for the learning and growth perspective. Secondary data was provided by the superior institution according to indicators selected for the internal process, customer, and financial perspectives. SEM was used to explore the influence of hospital’s learning and growth on its internal process in the same year, and on its customer and financial performance in the following year.
Results: 1. The results of this study provided partial support for the claim that the BSC model reflects cause and effect relations among learning and growth, internal process (medical quality, and operational efficiency), customer, and financial perspectives. We also verified the relations among indicators within perspectives. It also proved that indicators of the internal process perspective have a direct effect on indicators of the financial perspective without using customer perspective as a mediating variable. 2. The leading indicators verified by this study included the implementation of management by objective, the initiation into Taiwan quality indicator project, total number of beds per nurse, net mortality rate, average length of stay in the last year, and patient satisfaction with physicians' answers to patients' condition in the current year. 3. This study fails to prove a positive and significant effect of market share on profitability, mainly because it had a negative and significant effect on patient satisfaction. 4. The indicators of learning and growth perspective with data from 2000 to 2001 and from 2001 to 2001 were different. This showed that management model is a dynamic model, thus indicators should be modified as time varies.
Conclusion: By using SEM to examine causal relations among performance indicators in the BSC framework, this study confirmed that leading indicators in the current year had positive influence on lagging indicators in the following year. Hospital administrators can apply the results of study to manage the leading indicators is to create organizations’ future value. However, the causal relations between the leading indicators and the lagging indicators must be regularly validated because management environment is a dynamic system.
Subjects
平衡計分卡
因果關係
結構方程模式
Balanced Scorecard Framework
Structural Equation Modeling
Causal Relations
Type
thesis
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