Creating a balanced scorecard for a hospital system

In 1999, hospitals in Ontario, Canada, collaborated with a university-based research team to develop a report on the relative performance of individual hospitals in Canada's most populated province. The researchers used the balanced-scorecard framework advocated by Kaplan and Norton. Indicators of performance were developed in four areas: clinical utilization and outcomes, patient satisfaction, system integration and change, and financial performance and condition. The process of selecting, calculating, and validating meaningful indicators of financial performance and condition is outlined. Lessons learned along the way are provided. These lessons may prove valuable to other finance researchers and practitioners who are engaged in performance measurement endeavors.