How CEOs use management information systems for strategy implementation in hospitals

The “interactive” performance measurement system and team performance – Towards optimal organizational utility

Purpose

This study aims to highlight the significance of Performance Measurement System (PMS) as an “interactive” system that adapts to the organization's peculiar operational setup, thereby delivering optimal employee performance management benefits. Using Schatzki's (2002) “site of the social” theoretical conceptualization, it aims to empirically investigate the influence PMS's such strategic adaptation could have on employees' team performance through its mediating effect on improving organizational learning and knowledge sharing.

Design/methodology/approach

In pursuit of the set objective, we conducted a survey of 200 employees in public accounting firms located in the two major Indonesian cities of Jakarta and Surabaya. The survey yielded 89 responses of which 87 were deemed fit for empirical analyses. The statistical analyses of the data were performed using SmartPLS.

Findings

The statistical analyses using SmartPLS found evidence that the strategic use of the PMS positively influences team performance, both directly and indirectly, through its role in enhancing organizational learning; however, its role in enhancing knowledge sharing did not demonstrate leveraging team performance.

Research limitations/implications

The study conclusions are based on a relatively small data sample and the context of a developing economy, and, hence, need to be replicated with caution.

Originality/value

The study contributes to the management accounting theory and practice and emphasizes the strategic use of PMS to help improve organizational performance. Its novel “site” and context directs researchers' and practitioners' attention to the “interactive”, rather than passive and standalone, use of PMS to influence team performance and instigates a new debate on the management tool's optimal use.

Do different uses of performance measurement systems in hospitals yield different outcomes?

BACKGROUND

Inspired by the new public management movement, many public sector organizations have implemented business-like performance measurement systems (PMSs) in an effort to improve organizational efficiency and effectiveness. However, a large stream of the accounting literature has remained critical of the use of performance measures in the public sector because of the inherent difficulty in measuring output and the potential adverse effects of performance measurement. Although we acknowledge that PMSs may indeed sometimes yield adverse effects, we highlight in this study that the effects of PMSs depend on the way in which they are used.

PURPOSE

The aim of this study was to investigate various uses of PMSs among hospital managers and their effects on hospital outcomes, including process quality, degree of patient-oriented care, operational performance, and work culture.

METHODOLOGY

We use a survey sent to 432 Dutch hospital managers (19.2% response rate, 83 usable responses). For our main variables, we rely on previously validated constructs where possible, and we conduct ordinary least squares regressions to explore the relation between PMS use and hospital outcomes.

RESULTS

We find that the way in which PMSs are used is associated with hospital outcomes. An exploratory use of PMS has a positive association with patient-oriented care and collective work culture. Furthermore, the operational use of PMSs is positively related to operational performance but negatively related to patient-oriented care. There is no single best PMS use that positively affects all performance dimensions.

PRACTICE IMPLICATIONS

The way in which managers use PMSs is related to hospital outcomes. Therefore, hospital managers should critically reflect on how they use PMSs and whether their type of use is in line with the desired hospital outcomes.

Managerial characteristics and budget use in festival organizations

Festivals are an important part of popular culture and have increased in popularity in recent decades. However, they remain relatively unexplored in the accounting literature, and understanding of the use of management control tools in this context is low. This study aims to investigate the use of budgets in festivals. Informed by upper echelons theory, it investigates how individual and observable characteristics of festival managers are associated with variations in the use of budgets. The study is based on a survey of 61 festival managers from 40 festivals. The findings suggest that festival budgets are particularly important in the planning and coordination process but used less frequently for ex post evaluations. The findings also indicate a positive association between a business educational background and the use of budgets for most purposes, with the exceptions of performance evaluation and reward. This paper contributes to the literature on accounting in popular culture in general and in festivals specifically. Through its application of upper echelons theory, it also contributes to the management accounting and control literature, showing how individual characteristics of managers influence the use of budgets.

Evaluation of the Use of Strategic Management Tools by Hospital Executives in Turkey

This study aims to determine whether public and private hospital executives have knowledge of strategic management tools, what strategic management tools they use, to what extent they are satisfied with these tools and what tools they consider using in the future. The research data were collected via a survey form through face-to-face meetings. The research results generally indicate that private hospital executives use many more strategic management tools than public hospital executives. Moreover, the great majority of strategic management tools tend to be used more by executive directors, who have received training in strategic management and those who perceive themselves as being in a competition. This study indicates that the hospital executives who participated in the study do not have sufficient knowledge of the strategic management tools that constitute the basis of strategic management practices. Therefore, hospital executives should be trained in effective use of strategic management. In particular, former doctors turned medical executives who have not received training on management should be provided with appropriate knowledge of strategic management tools through in-service trainings and various courses, certification programmes and seminars. This will increase their use and understanding of these tools.

Electronic Health Record (EHR) Organizational Change: Explaining Resistance Through Profession, Organizational Experience, and EHR Communication Quality

The American Recovery and Reinvestment Act passed by the U.S. government in 2009 mandates that all healthcare organizations adopt a certified electronic health record (EHR) system by 2015. Failure to comply will result in Medicare reimbursement penalties, which steadily increase with each year of delinquency. There are several repercussions of this seemingly top-down, rule-bound organizational change-one of which is employee resistance. Given the penalties for violating EHR meaningful use standards are ongoing, resistance to this mandate presents a serious issue for healthcare organizations. This study surveyed 345 employees in one healthcare organization that recently implemented an EHR. Analysis of variance results offer theoretical and pragmatic contributions by demonstrating physicians, nurses, and employees with more experience in their organization are the most resistant to EHR change. The job characteristics model is used to explain these findings. Hierarchical regression analyses also demonstrate the quality of communication surrounding EHR implementation-from both formal and informal sources-is negatively associated with EHR resistance and positively associated with perceived EHR implementation success and EHR's perceived relative advantage.

Comparison Between Individually and Group-Based Insulin Pump Initiation by Time-Driven Activity-Based Costing

BACKGROUND

Depending on available resources, competencies, and pedagogic preference, initiation of insulin pump therapy can be performed on either an individual or a group basis. Here we compared the two models with respect to resources used.

METHODS

Time-driven activity-based costing (TDABC) was used to compare initiating insulin pump treatment in groups (GT) to individual treatment (IT). Activities and cost drivers were identified, timed, or estimated at location. Medical quality and patient satisfaction were assumed to be noninferior and were not measured.

RESULTS

GT was about 30% less time-consuming and 17% less cost driving per patient and activity compared to IT. As a batch driver (16 patients in one group) GT produced an upward jigsaw-shaped accumulative cost curve compared to the incremental increase incurred by IT. Taking the alternate cost for those not attending into account, and realizing the cost of opportunity gained, suggested that GT was cost neutral already when 5 of 16 patients attended, and that a second group could be initiated at no additional cost as the attendance rate reached 15:1.

CONCLUSIONS

We found TDABC to be effective in comparing treatment alternatives, improving cost control and decision making. Everything else being equal, if the setup is available, our data suggest that initiating insulin pump treatment in groups is far more cost effective than on an individual basis and that TDABC may be used to find the balance point.

Are performance measurement systems useful? Perceptions from health care

BACKGROUND

Prior literature identified the use of Performance Measurement Systems (PMS) as crucial in addressing improved processes of care. Moreover, a strategic use of PMS has been found to enhance quality, compared to non-strategic use, although a clear understanding of this linkage is still to be achieved. This paper deals with the test of direct and indirect models related to the link between the strategic use of PMS and the level of improved processes in health care organizations. Indirect models were mediated by the degree of perceived managerial discretion.

METHODS

A PLS analysis on a survey of 97 Italian managers working for health care organizations in the Lombardy region was conducted. The response rate was 77.6%.

RESULTS

The strategic use of PMS in health care organizations directly and significantly (p < 0.001) enhances performance in terms of improved processes. Perceived managerial discretion is positively and significantly (p < 0.001) affected by the strategic use of PMS, whereas the mediation effect is non-significant.

CONCLUSIONS

This study contributes to the literature investigating the design and implementation of a non-financial measurement tool, such as the non-financial information included into a balanced scorecard (BSC), in health care organizations. Managers in health care organizations can benefit from the strategic use of PMS to effectively allocate their time to strategic opportunities and threats, which might arise and affect organizational, output-related performance, such as improving processes.

Budget goal commitment, clinical managers' use of budget information and performance

Despite the importance placed on accounting as a means to influence performance in public healthcare, there is still a lot to be learned about the role of management accounting in clinical managers' work behavior and their link with organizational performance. The article aims at analyzing the motivational role of budgetary participation and the intervening role of individuals' mental states and behaviors in influencing the relationship between budgetary participation and performance. According to the goal-setting theory, SEM technique was used to test the relationships among variables. The data were collected by a survey conducted in an Italian hospital. The results show that: (i) budgetary participation does not directly influence the use of budget information, but the latter is encouraged by the level of budget goal commitment which, as a result, is influenced by the positive motivational consequences of participative budgeting; (ii) budget goal commitment does not directly influence performance, but the relationship is mediated by the use of budget information. This study contributes to health policy and management accounting literature and has significant policy implications. Mainly, the findings prove that the introduction of business-like techniques in the healthcare sector can improve performance if attitudinal and behavioral variables are adequately stimulated.

Management accounting use and financial performance in public health-care organisations: evidence from the Italian National Health Service

Reforms of the public health-care sector have emphasised the role of management accounting (MA). However, there is little systematic evidence on its use and benefits. To fill this gap, we propose a contingency-based model which addresses three related issues, that is, whether: (i) MA use is influenced by contextual variables and MA design; (ii) top-management satisfaction with MA mediates the relationship between MA design and MA use; and (iii) financial performance is influenced by MA use. A questionnaire was mailed out to all Italian public health-care organisations. Structural equation modelling was performed to validate the research hypotheses. The response rate was 49%. Our findings suggest that: (i) cost-containment strategies encourage more sophisticated MA designs; (ii) MA use is directly and indirectly influenced by contingency, organisational, and behavioural variables; (iii) a weakly significant positive relationship exists between MA use and financial performance. These findings are relevant from the viewpoint of both top managers and policymakers. The former must make sure that MA is not only technically advanced, but also properly understood and appreciated by users. The latter need to be aware that MA may improve performance in ways and along dimensions that may not fully translate into better financial results.

Time-driven activity-based costing in an outpatient clinic environment: development, relevance and managerial impact

Healthcare managers are continuously urged to provide better patient services at a lower cost. To cope with these cost pressures, healthcare management needs to improve its understanding of the relevant cost drivers. Through a case study, we show how to perform a time-driven activity-based costing of five outpatient clinic's departments and provide evidence of the benefits of such an analysis.