Chapter 11

Measuring the Outcomes of

Leadership Initiatives
“While the sage advice ‘you can’t manage what
you can’t measure’ is still very much true, in an
e-business environment it is also true that ‘you
can’t measure what you can’t monitor.’”

Peter Drucker
 Learning Objectives
• Describe how health leaders measure and capture
information (called metrics) of efficiency,
effectiveness, performance, efficacy and quality in
health organizations.
• Explain the importance of measurement and
developing criteria for efficiency, effectiveness,
performance, efficacy and quality in health
organizations.
• Demonstrate applicable models and tools that
represent constructs of efficiency, effectiveness,
performance and quality in health organizations.
 Learning Objectives
• Compare and contrast two or more models of health
leader assessment and evaluation and analyze the
process of capturing metrics for this assessment and
evaluation within a health organization.
• Compile and categorize health leader
measures/metrics for assessment and evaluation for
effectiveness, efficiency, performance, efficacy and
quality; compile and categorize measures/metrics for
assessment and evaluation of the health organization
and relate the two categorized lists.
 Learning Objectives
• Appraise, evaluate and justify the use of
performance and quality measures/metrics for a
specific type of health organization (hospital, group
practice, rehabilitation center, etc…).
Measuring the Outcomes of Leadership Initiatives

• With growing trends in the U.S. health industry for

leaders to be efficient, effective and efficacious in
leading people and managing resources, while
simultaneously achieving high performance and
quality outcomes within their organization,
measurement and assessment has become a
necessary competency for leaders.
Measuring the Outcomes of Leadership Initiatives

• Before any leader can do this, he or she must

understand the difference between the constructs of
efficiency, effectiveness, efficacy, performance and
quality, and how the operationalization of salient
variables for these constructs can assist in leading
highly successful organizations
Measuring the Outcomes of Leadership Initiatives
• Early Efforts of the U.S. Health System in Measurement
– Abraham Flexner wrote one of the earliest works on
hospital performance called, Medical Education in the
United States and Canada. This early work on
standards and measures led to improvement in the
scientific method and improved curriculum and
standards in medical education.
• Dr. Ernest Codman of Massachusetts General
Hospital wrote that “ the carrying out of
comparative studies is troublesome, difficult, and
time-consuming and may point to the desirability
of making changes in procedure in organizations
which are bothersome, to say the least.”
Measuring the Outcomes of Leadership Initiatives
• Early Efforts of the U.S. Health System in
Measurement
– In 1918, the American College of Surgeons
launched a program for the standardization of
hospital procedures and organization. The
masterful implementation of these standards has
been responsible for the most constructive results
in the efficiency of hospital operations in the
United States.
Measuring the Outcomes of Leadership Initiatives
• Constructs, Variables and Tools to Measure Health
Leaders and Their Organizations
– Emotional Intelligence and Self-Efficacy
– Strategic Plan
– Market Share/Growth
Measuring the Outcomes of Leadership Initiatives
– Benchmarking
1. Determining what independent and dependent
variables to benchmark;
2. Planning the process;
3. Collecting internal data;
4. Collecting external data;
5. Analyzing differences;
6. Transferring the data to information to
knowledge;
7. Action planning; and
8. Reassessing (periodic reassessment).
Measuring the Outcomes of Leadership Initiatives
– Organizational Satisfaction, Absenteeism &
Turnover
– National Level Systems
• National Committee for Quality Assurance (NCQA)
Healthcare Effectiveness Data and Information Set
(HEDIS) report card and Quality Compass system,
http://www.ncqa.org/tabid/59/Default.aspx, retrieved
August 21, 2009.
Measuring the Outcomes of Leadership Initiatives

• Common Tools to Measure Leadership Outcomes

and Competencies
– Competencies for Assessment and Evaluation
– Objectives
– Survey
– 360-Evaluation
Measuring the Outcomes of Leadership Initiatives

• Models for Leadership Assessment and Evaluation

– NCHL
– GE Healthcare Performance Solutions
– National Public Health Leadership Institute
Measuring the Outcomes of Leadership Initiatives
• Health Efficiency
– Efficiency = Outputs/Inputs (subject to constraints).
– Efficiency is a quantitative term. It is derived
through a process of dividing outputs by inputs (E =
O/I)
– Inputs can be defined based on Design Capacity.
– Design Capacity is determined through
predetermined structures and process. For
example, a clinic might be designed to see 220
patients a day based on available FTEs and
treatment rooms
– Outputs: measured by outcomes
Measuring the Outcomes of Leadership Initiatives
• Health Efficiency
– Outcomes are captured from actual data generated by
the organization. For example, outputs are the actual
numbers of patients seen per day. In this case, let’s
say 180 patients were seen by the facility:
– Efficiency calculation: E = O/I; E = 180 / 220; E =
82%
– The health leader can see that his or her new clinic is
only operating at 82% efficiency. As a result of this,
two possible areas to investigate are immediately
evident:
1. The facility is not meeting its operational capacity
2. The facility’s design capacity was originally
miscalculated or misforecast.
Measuring the Outcomes of Leadership Initiatives

• Cost efficiency focuses on the optimal distribution of

funds to meet daily activities in the health setting.
• Productivity, or process efficiency, measures the
work expended to produce healthcare products.
• Economic efficiency measures the resources
consumed per unit of service output.
• Response efficiency refers to how quickly a system
reacts to a request for service.
Measuring the Outcomes of Leadership Initiatives

• Technical efficiency focuses on optimizing inputs to

create outputs in such a way that no other
reorganization could use resources more fully.
• Operational efficiency is defined as achieving the full
potential of all resources available. It differs from
technical efficiency in that there is emphasis on
avoiding waste.
Measuring the Outcomes of Leadership Initiatives

• Optimization
– Optimization is defined as achieving perfect efficiency
goals
• 100% efficiency
• Health Effectiveness
– Effectiveness differs from the concept of efficiency insofar
that it may be a qualitative variable and not always a
quantitative variable.
– Effectiveness = the degree of (qualitative + quantitative
factors) (interpreted by stakeholders).
Measuring the Outcomes of Leadership Initiatives

• Health Performance
– Performance = (Effectiveness criteria + Efficiency
ratios).
• Health Efficacy
– Efficacy, as related to health and healthcare, is defined as
the resources of the care process (continuum of care related
to prevention, promotion, diagnosis, treatment,
rehabilitation and palliative care) that are attributed to
realizing a desired or improved outcome for the patient and
their family within an environment of respect and dignity.

Coppola, M.N. (2009) Quantitative Analysis Coursepac, (in progress textbook)Texas Tech University Health Sciences Center, Lubbock, Texas 79430
Measuring the Outcomes of Leadership Initiatives
• Health Quality
– QUALITY = Performance + Stakeholder Factors &
Expectations + Professional Standards of Care

Quality Perspective from the

Quality
Donabedian Model

Structure Process Outcomes

- Health Sciences Center, Lubbock, Texas 79430

Coppola, M.N. (2009) Quantitative Analysis Coursepac, (in progress textbook)Texas Tech University
 Chapter 11: Measuring the Outcomes of Leadership Initiatives
Term Definition Function
Benchmarking Benchmarking is a continuous
process of measuring performance Compare Item A to best in class
and services against best in class Item B
cases or organizations

Efficiency Efficiency is a quantitative term E = Outputs/Inputs

expressed as a ratio. It is derived
through a process of dividing
outputs by inputs
Optimization is defined as E = Outputs/Inputs; such that E=
Optimization achieving perfect efficiency 100%
Effectiveness Effectiveness becomes the sum of Effectiveness = the degree of
both quantitative and qualitative (qualitative + quantitative factors);
factors that are individually As interpreted by stakeholders.
interpreted by stakeholders.

Performance Performance in healthcare Performance = (Effectiveness

organizations weds the empirical criteria + Efficiency ratios)
concept of efficiency, and the
stakeholder concept of
effectiveness, into a new,
measurable latent variable called
performance.

Quality Quality is absolute and universally QUALITY = (Performance +

recognizable by all stakeholders. stakeholder factors)

Coppola, M.N. (2009) Quantitative Analysis Coursepac, (in progress textbook)Texas Tech University Health Sciences Center, Lubbock, Texas 79430
 Chapter 11: Measuring the Outcomes of Leadership Initiatives

Sections Required Evaluative Criteria

Leadership 1.1 Leadership: Senior Leadership

1.2 Leadership: Governance and Societal Responsibilities
2.1 Strategic Planning: Strategy Deployment
Baldrige 2.2 Strategic Planning: Strategy Implementation
3.1 Customer Focus: Voice of the Customer
Evaluation (Stakeholder/Patient Engagement)
Criteria 3.2 Customer Focus; Customer Engagement(Stakeholder/Using
Domains Patient Information)
Performance 4.1 (Performance Improvement)
4.2 (Performance Improvement/Knowledge Management)
5.1 Workforce Focus: Workforce Engagement
5.2 Workforce Focus: Workforce Environment (Workforce
Capability)
6.1 Process Management: Work Systems
6.2 Process Management: Work Processes(Design, Manage
and Improve Work Processes)
Results 7.1 Results: Health Care Outcomes
7.2 Results: Customer-Focused Outcomes
7.3 Results: Financial and Market Outcomes
7.4 Results: Workforce-Focused Outcomes
7.5 Results: Process Effectiveness Outcomes
7.6 Results: Leadership Outcomes
While the sage advice ‘you can’t manage what you can’t
measure’ is still very much true, in an e-business
environment it is also true that ‘you can’t measure what
you can’t monitor.’
Peter Drucker

Completion of Chapter 11

Ledlow, Gerald R. & Coppola, M. Nicholas (2014). Leadership for Health

Professionals: Theory, Skills, and Applications, 2d Edition, Boston,
Massachusetts: Jones & Bartlett Publishers