Healthcare system is large, spending accounted for 17% of the GDP in 2011 and was expected to increase (Kaplan & Porter, 2011). By 2014 this had risen to 17.5% of GDP, with a monetary value of $3 trillion, equal to $9,523 per capita, employing approximately 10 million people within the sector (CDC, 2016). The largest single costs are those associated with hospitals, accounting for 32.1% of all healthcare expenditure, providing approximately 1,200 stays for every 10,000 members of the U.S. population, with physician and clinical services accounting for 19.9%, prescription drugs 9.8% and nursing care/continuing care retirement facilities 5.1% (CDC, 2016). The cost of healthcare far exceeds costs seen in other high income countries, for example in 2013 when healthcare costs were 17.1% of GDP in the U.S., they were 11.6% in France, 11.5% in Sweden and 8.8% in the UK (Squires & Anderson, 2016). Despite this higher spending level, there are poorer healthy outcomes and life expectancy compared to other developed nations (Squires & Anderson, 2016).
There are numerous reasons for the differential, including a higher use of technology in the U.S. a, but there are also higher healthcare process (Squires & Anderson, 2016). The structure of the healthcare industry...
is different, with healthcare provided through private decentralised suppliers, without any significant Federal Presence. There are different ownership structures and organisation type. Of the 5,627 hospitals register in the U.S., 4,926 are community hospitals, with 213 Federal hospitals, 403 non-Federal psychiatric hospitals, 75 non-federal long-term care hospitals, and 10 institutional hospitals, such as prison hospitals will contribute in families et cetera (AHA, 2016). Of the 4926 community hospitals, 2870 operate as nonprofitmaking, 1053 are for profit facilities, and 1003 are operated by state or
local government as community hospitals (AHA, 2016). The majority of hospitals are located in urban areas, with 3071, and only 1855 or in rural areas (AHA, 2016). Committee hospitals are part of the larger group, with 3183 being part of a system, where membership is made up of at least three different hospitals, and 1690 part of a network, working with other agencies (AHA, 2016).
This indicates the fragmentation within the U.S.
health service. With this in mind, it may be unsurprising that Kaplan & Porter, (2011) argue that one of the main problems with the service is the inability to accurately cost the way in which healthcare is delivered resulting in reimbursement that is based on inaccurate, or arbitrary assumptions regarding care. Furthermore, they argue that where different elements of the service cannot be measured accurately, there are likely to be misunderstandings regarding the way in which costs are incurred, as well as reduced ability to improve
performance or reduce costs (Kaplan & Porter, 2011). At One approach which may be utilised to help improve control over healthcare, by providing accurate input information including consideration is the use of the
balanced scorecard (BSC). This has been demonstrated as useful, for example Motorola reduced costs by trimming 33% of the time of their manufacturing cycle using results from the BSC (Morgan, 1998). The BSC can be designed to meet the needs of different organisation, and also used as a tool for
benchmarking, while giving a holistic…
