Performance indicators--can you afford not to have them? Royal Children's Hospital--a structured approach

The thought of performance assessment may send chills through even the most experienced hospital manager. It conjures up the worst facets of negativeness, failure, being 'watched', funding cuts and being 'on trial'. Yet the constructive use of performance indicators is undoubtedly an essential tool to all levels of management within a hospital. Performance indicators are as important to health agencies as they are to B.H.P. Stringent financial restraints, calls from 'shareholders' to demonstrate performance and to be more accountable are placing management under increasing scrutiny. Overseas work points to the use and abuse of indicators, and the difficulty in arriving at appropriate and meaningful performance indicators. A computer search of Australian literature reveals a dearth of papers on the subject of health service performance indicators. Perhaps the cultural norm of reticence towards formal performance appraisal is reflected by this dearth. Within individual agencies, however, performance indicators are being utilised in varying degrees. The Royal Children's Hospital, Melbourne, has compiled a structured set of performance indicators for two purposes--firstly, as a means of monitoring performance on a regular basis, and secondly, as a quality assurance tool. The hospital's chosen indicators cover not only throughput, but attempt to shed some light on efficiency and effectiveness. They are designed to highlight areas/trends which diverge from the 'norm', which act as warning signals to investigate further. Whilst some measures relate specifically to the activities and objectives of the Royal Children's Hospital, many are sufficiently general to the hospital field to be worth considering by any hospital interested in a more structured, formal review of its performance. It may also be possible to obtain many of the measures shown without necessarily having in place extensive/comprehensive computer information systems. Introduction of measures may therefore be undertaken progressively.