PERFORMANCE MANAGEMENT AND MEASUREMENT
The purpose of this standard is to introduce the fundamental concepts of performance management and assist an organization to develop a practical strategy for achieving its quality improvement (QI) goals. This standard highlights the use of evidence-based performance measures to set QI goals and evaluate an organization’s progress in meeting them.
Part 1: Overview
Since accountability for performance has become increasingly critical in health care, it is necessary for an organization to understand the key drivers behind its performance and demonstrate the results of its work. Performance measurement has many interrelationships with quality improvement (QI), and focus on the use of the data is one of the four key principles of QI discussed in the Quality Improvement standard. Data used for measuring performance provides evidence of how well an organization’s system is working currently and what happens when changes are applied. Performance measurement data and QI also support and maximize the usefulness of QI tools. Three important concepts are defined as foundational to a QI data infrastructure:
- Performance measures are designed to measure systems of care and are derived from clinical or practice guidelines. Data that is defined into specific measurable elements provides an organization with a meter to measure the quality of its care.
- Performance measurement is a process by which an organization monitors important aspects of its programs, systems, and processes. In this context, performance measurement includes the operational processes used to collect data necessary for the performance measures.
- Performance management is a forward-looking process used to set goals and regularly check progress toward achieving those goals. In practice, an organization sets goals, looks at the actual data for its performance measures, and acts on results to improve the performance toward its goals.
Performance measures should be distinguished from clinical guidelines. Clinical or Practice guidelines are systemically-developed statements to assist practitioners and patients in making decisions about appropriate health care for specific clinical circumstances. Attributes of good guidelines include validity, reliability, reproducibility, clinical applicability, clarity, multidisciplinary process, review of evidence and documentation. (1) Performance measures provide an indication of an organization’s performance in relation to a specified process or outcome. Practice guidelines that outline the expectations of care around a specific issue or disease state are created by a group of subject matter or clinical experts. Because performance measures and standards of care each serve a different purpose, they are not always identical.
This standard describes in detail why performance measurement is important and provides a step-by-step guide for the performance management process.
What Is Performance Measurement?
Performance measurement is a process by which an organization monitors important aspects of its programs, systems, and care processes. Data is collected to reflect how its processes are working, and that information is used to drive an organization’s decisions over time. Typically, performance is measured and compared to organizational goals and objectives. Results of performance measurement provide information on how an organization’s current programs are working and how its resources can be allocated to optimize the programs’ efficiencies and effectiveness.
Performance measurement is well established throughout health care in the core areas of finance, operations, and clinical care services. For example:
- Finance—an organization often measures the efficiency of its accounts receivables (AR); i.e., timely collection of payment for services rendered
- Operations—an organization tracks the length of time it takes for a patient to receive an appointment in the practice, or measures patient satisfaction with the care received
- Clinical Care—an organization measures how often care is delivered in accordance with evidence-based guidelines, or how effective that care is in improving patient outcomes
There are other examples of performance measurement in health care organizations today. As information technology is widely integrated into health care settings, support for performance measurement will also expand throughout the organization.
Why Does an Organization Need to Measure Performance?
There are a number of reasons why an organization may choose to measure its performance. Performance measurement provides a reliable process to determine if an organization’s current system is working well. Also in today’s economy, there is a demand for transparency and increasing scrutiny of an organization’s business practices. These reasons promote an organization’s use of process and outcome data as a means to demonstrate its performance. There are other typical circumstances of why an organization may choose to measure its performance, such as:
- 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
There are additional motives for a health care organization to measure its performance:
- Government-accrediting organizations and funding sources rely on performance measurement to prove resources are used effectively and efficiently
- Clinicians use performance measurement to quantify the effectiveness of evidence-based care provided by their care delivery systems
- Organizational leaders use performance measurement to monitor and improve management, clinical care, and support services
Fund raising is increasingly tied to documented performance
Types of Performance Measurement:
It is useful to categorize performance measures to better understand what systems or processes are measured. An organization may combine different types of measures to provide a complete picture of its underlying systems. There are four types of performance measures:
- Process measure quantifies a health care service provided to, on behalf of, or by a
patient, that is based on scientific evidence of efficacy or effectiveness. It quantifies a specific system; e.g., to get a test done or a service performed.
- Outcome measure quantifies a patient’s health status resulting from health care. In the clinical area, it often measures a patient outcome so it can be compared to a care standard, such as, a patient’s test value.
- Balancing measure ensures that changes to improve one part of the system are not causing new problems in other parts of the system. It examines another part of the system to ensure that improvements in one area have no unexpected consequences in another.
- Structure of care measure quantifies a feature of a health care organization (or clinician) relevant to its capacity to provide health care.
Performance Management
Performance management is a process for setting goals and regularly checking progress toward achieving those goals. It includes activities that ensure organizational goals are consistently met in an effective and efficient manner. The overall goal of performance management is to ensure that an organization and its subsystems (processes, departments, teams, etc.), are optimally working together to achieve the results desired by the organization. Performance management has a wide variety of applications, such as, staff performance, business performance, or in health care, health outcome performance measures.
Because performance management strives to align all the subsystems to achieve results, the focus of performance management should also affect the management of an organization’s performance overall.
An organization can achieve the overall goal of effective performance management by continuously engaging in the following activities:
- Identifying and prioritizing desired results
- Establishing means to measure progress toward those results
- Setting standards for assessing how well results are achieved
- Tracking and measuring progress toward results
- Exchanging ongoing feedback among those individuals working to achieve results
- Periodically reviewing progress
- Reinforcing activities that achieve results
- Intervening to improve progress where needed
One way to design a well-balanced performance management system is to focus on four strategic perspectives derived from the Balanced Scorecard model as shown in Figure 1.2. (4) The Balanced Scorecard is a performance management tool to measure whether smaller-scale operational activities are aligned with larger-scale objectives in terms of vision and strategy. The example depicted below shows that focusing on financial outcomes plus the operational aspects of a program or organization, the Balanced Scorecard helps provide a more comprehensive view, which in turn helps an organization act in its best long-term interests.
Performance Measurement Process:
Step 2: Choose Performance Measures
After an organization discusses what is important to measure, the next step is to choose specific performance measures. Understanding that the delivery of care is a number of systems and processes, performance measures serve as indicators for the effectiveness of those systems and processes. Consider the following in selecting performance measures:
- Measure what is important based on the evaluation of an organization’s community, population, and priorities as determined in Step 1
- Measure what is required to meet funding or contractual expectations
These first two considerations often overlap. Agencies supporting or funding a health care organization may require specific performance measures.
- Include staff in the measure selection process since staff will be involved in the actual implementation of measurement and improvement activities. Buy-in from staff significantly facilitates these steps.
- Use existing measures, if possible. Clinical performance measures are derived from evidence-based clinical guidelines. Measurement allows an evaluation of an important outcome of care for a designated population of patients, and it is a proxy to understand the effectiveness of the underlying systems of care. Just as there are evidence-based care guidelines for many conditions, there also are established measures that indicate how effectively guidelines are translated to practice. National organizations carefully considered these measures, and it is advisable to adopt an established measure. Examples of general sources for clinical measures include:
o Healthcare Effectiveness Data and Information Set (HEDIS)
o AHRQ Clearinghouse of Clinical Measures
o National Quality Forum
- National Initiative for Children’s Healthcare Quality
- If an organization creates its own measure, consider the characteristics of good performance measures and the IOM framework, Envisioning the National Healthcare Quality Report:
- Relevance: Does the performance measure relate to a frequently-occurring condition or has a great impact on patients at an organization’s facility?
- Measurability: Can the performance measure realistically and efficiently be quantified given the facility’s finite resources?
- Accuracy: Is the performance measure based on accepted guidelines or developed through formal group decision-making methods?
- Feasibility: Can the performance rate associated with the performance measure realistically be improved given the limitations of the clinical services and patient population?
- Consider using several measures of different types as described above. For example, diabetes care may best be evaluated by including:
- Frequency of evidence-based testing (process measure)
o Patient blood pressure control (outcome measure)
o Patient satisfaction as diabetes care delivery evolves (balancing measure)
Calculation of co-pays regarding clinical monitoring of diabetes care (structural measure)
Step 3: Determine a Baseline
Once performance measures are chosen, an organization collects the baseline data for each measure. Baseline data is a snapshot of the performance of a process or outcome that is considered normal, average, or typical over a period of time and reflects existing care systems. Determining the baseline involves calculating the measure. As an organization assesses where it is before embarking on a QI program, it often finds its data reflects a lower-than-desired performance. This should not cause alarm but rather provide the opportunity to focus QI efforts to improve performance.
Established performance measures include details about the numerator and denominator to calculate the measure. There is guidance for pertinent CPT or ICD-9 codes and patient exclusion criteria. Specifics about calculating a baseline for the quality measures are included in each clinical standard.
- First Trimester Care Access
Percentage of pregnant women beginning prenatal care in the first trimester of pregnancy
- HIV Screening for Pregnant Women
Percentage of pregnant women who were screened for HIV infection during the first or second prenatal care visit
- Breast Cancer Screening
Percentage of women 40 to 69 years of age who had a mammogram
- Cervical Cancer Screening
Percentage of women 21 to 64 years of age who received one or more Pap tests
- Colorectal Cancer Screening
Percentage of adults 50 to 80 years of age who had appropriate screening for colorectal cancer
- Diabetes – HbA1c {Poor Control}
Percentage of adult patients 18 to 75 years of age with type 1 or 2 diabetes with most recent hemoglobin A1c (HbA1c) greater than 9 percent (poor control)
- Hypertension Control
Percentage of adult patients, 18 to 85 years of age, with diagnosed hypertension (HTN) whose blood pressure (BP) was adequately controlled (<140/90) during the measurement year
Tip: It is wise to be able to explain, teach, and re-evaluate the step-by -step process to calculate the measure for future iterations, and replicate it reliably in the future. Specifically, it is important to record the following for each measure:
- Data source
- Collection method
- Frequency of data collection
- Standardized time to collect data as applicable
Identify staff responsible for measurement and other aspects of the measurement process to create a detailed record.
Step 4: Evaluate Performance
To provide context for evaluating baseline data, an organization may choose to compare and benchmark its data against other health care organizations. Benchmarking is a process that compares organizational performance with health care industry best practices, which may include data from local, regional, or national sources. Benchmarking brings objectivity to the analysis of performance and identifies the strengths and weaknesses of a health care organization.
If an organization is satisfied with its current level of performance, then it may: Acknowledge and celebrate its success!
- Put a system in place to monitor performance periodically. The measure was selected because it is important to the organization; check performance periodically to ensure that the underlying systems involved in performance continue to function satisfactorily.
- Consider another performance measure.
Step 5: Develop a Plan and Make Changes to Improve Performance
If an organization previously worked to improve quality, it is likely there is an established approach for improving quality already. A QI plan is a strategy for identifying and implementing specific changes in processes that may result in improved performance.
Step 6: Monitor Performance Over Time
A critical part of QI is to measure when changes occur. In the same way data for the baseline measurement is calculated, periodic calculations of performance measures should be accomplished. For an organization actively engaged in improvement work, this is often monthly. As performance is measured over time, a trend develops. It is important to use the same methodology to collect and calculate the data each time.
Changes that improve the underlying critical pathway often reflect improved performance on the measure. An organization may choose to continue its improvement efforts as it moves toward its target or goal for the performance measure. An organization that is not experiencing improvement may reflect on the trend data and use the opportunity to re-evaluate its approach. All changes do not result in improvement and reflection on other change opportunities may be required to get improvement back on track. Most organizations continue to test changes and make improvements until their aims have been achieved.