THE LEVEL OF a country's well-being and economic growth can be seen and measured by the scope of rights and the quality of life enjoyed by the population. Consequently, the right to health is evidently a perfect universal indicator of people's rights and their quality of life. This finds confirmation in the fact that the world's most developed countries have been increasingly committed, primarily during the last century, to considering health as an inviolable right of the population and, thus, to implementing appropriate policies and strategies to guarantee this right, not only in fighting disease but also more generally in assuring acceptable levels of physical and mental well-being. However, this is in contrast with the limited resources allocated to meet health needs. Year by year, these resources are becoming increasingly scarce as growing expectations among the population and technological evolution create a progressive increase in the demand for healthcare services. The cost of public healthcare in Italy is at a compound rate of approximately 7%.1

The paucity of funds available for providing healthcare services is a particularly serious problem for the Campania Regional Government. For years, the local health service has shown a substantial deficit, and specific measures have recently been adopted in an attempt to reduce it. The Regional Public Health Service in Campania showed a consolidated debt exceeding Euro 5 billion as of December 31, 2005. Because of this critical situation, So.Re.Sa. SpA was founded (by Campania Regional Government resolution no. 182/2005) to identify real estate and financial operations, tools, and subjects by which to assess, consolidate, and eliminate the accrued debt, as well as to achieve a balanced budget in the present management of the Regional Public Health Service. The Regional Government's constant concern with bringing the healthcare deficit under control has not, however, been supported by an effective process of strategic planning. Indeed, their attention has been focused on short-term management with a view to reducing costs, thus neglecting the long-term situation and often losing sight of the health objectives set out in the Regional Public Health Service Plan.

To remedy this shortcoming, a study group was set up to define a strategic map and then to apply the Balanced Scorecard (BSC) to the objectives of the Regional Public Health Service Plan in accordance with the commitment to cover the deficit as provided by Campania Regional Government resolution no. 1843/2005. This action, as was the intention of the study group, resulted in the creation of a BSC for the Aziende Sanitarie (local health authorities) in Campania to adopt by designing their own specific BSCs consistent with the objectives formulated at a regional level.

GOVERNANCE AND STRATEGY

The governance and management of organizations can be seen in the choice of development plans and courses of action used to implement them. Governance entails making decisions about survival,2 which lead to the implementation of appropriate management policies through concrete actions regarding operational aspects. If we look closely, however, this latter phase is possible only if the perspectives of organizational evolution based on predetermined objectives satisfying the organization's core values have a clear direction. In a vision of procedural rationality,3 guidelines are subordinate and instrumental to objectives, which are separate from them but interconnected according to an analytical vision and evaluation of effectiveness, which is the purpose of planning. The objective is innate in the system of decision making and managing operativity throughout the entire business system.4

In positive realism, however, what it underscores, for management purposes, is the formulation of a strategy because its design is vital for its deployment. A strategy can be designed only by an actor capable of selecting and choosing where and how to use available tools to pursue predetermined goals: the governing body.

The choice of where and how to use these tools is part of a subjective systemic condition in a set of decisions, objectives, and actions, a set that is found recursively at different levels of organizational activity. It is thus possible to distinguish an overall or corporate level, when the conception of the combined set of goal-oriented elements is concerned with the complex future of the system as a whole, from a competitive or business level, when instead this combination regards the environment and the units in which the relationship with other individual subjects (supraordinate or subordinate, depending on their degree of influence and/or criticality, from which the basis of the measure of value derives) occurs electively, and at a functional, or political, level, when the choice of directions and actions regards homogeneous sets of activities.5

In a viable systemic reality,6 whose aim is to create value to survive, it is the capacity of the governing body to rise to a dominant position in defining the most appropriate dynamics that guarantees the future of the system itself. Therefore, to "ensure that the system evolves in a unitary manner towards the achievement of competitive advantages," the governing body must make choices and take decisions that require a unitary direction if they are to be carried out effectively. Achieving, maintaining, and developing unitariness requires cohesiona and integration to prevail "over the centrifugal forces that each structural element is able to exert and which could, in the long term, bring the system to its dissolution"[horizontal ellipsis]"to attain in the most appropriate manner[horizontal ellipsis]coordination, the governing body must, according to criteria of cost and efficiency, create adequate links both with the operational structure and amongst its component parts so that the flow of information is rapid, the objectives of the actions to be performed are communicated swiftly and clearly, and, above all, so that external events which have a particular impact on the performance of the organization are promptly assimilated and correctly interpreted." "Systemic effectiveness is attained by transforming the organization into a conscious system, a system that is capable of correctly perceiving the stimuli that influence its future, interpreting their meaning, and therefore their impact on the goals to be reached."7

Hence, there is the consideration that such an approach to the "formulation of business management" does not necessarily come about in a formalized manner and so become clear through plans defining the procedures by which it took shape. It can also emerge intuitively and be formed implicitly during the process through which a resolution is determined by a particular subject; in other words, exposition through an act of will.

But it is the element of consciousness that must not be lacking, the element of institutionalization in the sense of the foreshadowing and consolidation of a phase in a process of procedural rationality that is necessary above all in complex situations, where the will of governance is not formed at only 1 time and in 1 place but becomes the synthesis of succession of different phases.

This condition chiefly belongs to organizations involved in collective systems of public interest and typically in public administrations. In this case, conceptual and transferable tools linking the different phases in which management is defined can be very useful in achieving and maintaining unitariness in identifying guidelines that create links with the environment and its workers.

In the public sector, this particularly requires clearly identifying which level of the system is involved, making it is necessary to reformulate the process at different levels, just as different types of decision and a different range of action will correspond to each level.

The use of the BSC undoubtedly makes it possible to render the system of links clear, visible, and transferable so that they can be defined, stigmatized, and shared (and controlled).

In proactive terms, it is possible to obtain, in the present case, a further indication as to how the model can be adapted and used more effectively in the health service. It is apparent that each logical part of the process corresponds to a different phase in defining the pathway by which the vector of management is given physiognomy. Each situation/decision lies within the competence of strategic formulation and is characterized by the hallmark of the governing body that created it and by teleology, giving rise to "creative causality," the fertile ground where "the plan prepared by the governing body, albeit in the presence of a high level of environmental complexity," can take root.8

The BSC should be considered from a managerial perspective, and although its function remains consequent on the formulation of the strategy, it has a wider role than in the past in its response to the increasingly strong external pressures exerted by rapid change and uncertainty (in a word, complexity) to which organizations are subjected. Unlike the planning rationales of the 1960s and 1970s, the context of planning today has shifted, leading to the introduction of new variables, a change in the conceptual structure of the elements that require an answer, and, thus, the identification of new forms that are explanatory of these altered systems. The BSC, therefore, must incorporate characteristics of dynamism that need to be made clear in a mission statement identifying the qualitative and relational elements in different phases (hypothesis 1), but if it is to be fully translated, it must involve the entire management cycle (hypothesis 2).

THE STRATEGIC FRAMEWORK OF THE PUBLIC HEALTH SERVICE IN ITALY

Any description of the strategic framework of the Public Health Service in Italy needs to take into account the environment in which it functions and the role of suprasystems (order systems L + 1) that have a major influence in defining national strategic objectives. The first of these suprasystems is the World Health Organization (WHO), which defines overall health objectives on a worldwide level aimed at reducing the causes of mortality and morbidity and promoting living conditions that contribute to greater physical and mental well-being (Figure 1).

Figure 1. The strategic framework of the health objectives system.

The overall objectives defined by WHO worldwide are then taken into account in European Union plans that define the public health services required to meet WHO objectives. European Union plans are in turn taken into account by each member state, which defines its own country's health needs based on these guidelines and on epidemiological analyses conducted within the country itself.

This is also the case in Italy, where identified health needs are filtered through a system of restrictions defined by so-called essential levels of care (Livelli Essenziali di Assistenza, or LEAs). These are the services to be provided to the population defined on the basis of epidemiological and clinical data in relation to the amount of resources available (article 1, subsection 4 of legislative decree no. 502/92 and presidential decree of November 29, 2001), which become binding values. In particular, healthcare services provided on the basis of LEAs must be:

* indicated in the National Public Health Plan

* ethically accepted

* of a scientific nature

* compatible with the budgeting system

Therefore, LEAs are the country's broad areas of interest in terms of public health, and thus, health services must refer to LEAs if they are to be guaranteed by the National Public Health Service. In this case, either they are "guaranteed" free of charge or part of the cost is shared by the user. Consequently, certain types of care and services are excluded from LEAs provided by the National Public Health Service when they:

* do not satisfy principles of effectiveness and appropriateness (their effectiveness cannot be demonstrated on the basis of currently available scientific evidence and/or are used for individuals whose clinical conditions do not correspond to the recommended guidelines);

* do not conform to the principle of production efficiency (they do not guarantee an optimum use of resources in how the care is organized and delivered); and

* do not satisfy primary health needs.

By applying the filter of LEAs to health needs defined countrywide, health services capable of satisfying defined needs can be divided into:

* a demand for services that may be described as correct and is therefore guaranteed by the National Public Health Service

* a demand for services that may be described as incorrect and is therefore not guaranteed by the National Public Health Service or, to be more precise, is guaranteed but not using National Public Health Service resources (using instead regional resources allocated to Regional Health Plans, for example)

On the basis of health needs that meet the requirements indicated by LEAs, a 3-year National Public Health Plan is formulated. Within 150 days after the National Public Health Plan comes into force, regional governments must adopt or modify their Regional Public Health Plan and define which health objectives they intend to pursue over the 3-year period according to national objectives and specific local health needs. On the basis of the objectives they define, regional governments then decide what resources are required to achieve these objectives (the specific structure based on the conceptual matrix that highlights roles, relationships, and effects). In particular, they define what resources are currently available, which resources to use (in other words, to activate), which resources to reconvert (eg, reconverting beds for acute patients into beds for long-term patients), and which resources to acquire ex novo. After identifying objectives and resources, the Department of Health, together with regional governments, defines a set of indicators to monitor how effectively the plan is performing so that corrective measures can be adopted to better steer planned actions toward the achievement of objectives and so that health objectives defined at a national and regional level can, if necessary, be modified.

In redefining the components of the structure that relate to objectives, regional governments define guidelines, on the basis of resource planning, to give hospitals and local health authorities the necessary indications to modify their own resources and adjust them to the objectives. These guidelines create a link with the operational units of the system and act as a basis for the implementation plans of local health authorities. In accordance with the indications contained in regional guidelines, local health authorities plan hard measures regarding organizational restructuring and reconversion (the opening of new wards, the closing of wards, etc) and soft measures affecting the type of services provided (case mix). In addition, regional guidelines affect the negotiation of contracts with health services providers for accreditation. These contracts, in turn, have an indirect effect on the type of case mix planned by local health authorities.

THE IMPORTANCE OF IMPLEMENTING THE BSC

The BSC was first developed in 1992 by Robert Kaplan and David Norton.9

The BSC introduced a holistic approach for measuring the performance of organizations, thus going beyond the limits of an approach based on traditional financial accountability: financial performance measuring systems focused almost exclusively on short-term behavior and immediate performance, sacrificing the creation of value in the long-term. The model developed by the BSC is based on the assumption that relying solely on financial measures can be misleading for organizations, in that financial measures are retrospective indicators providing information about actions that have already been carried out. It then goes on to be argued that retrospective indicators must be supported by prospective performance indicators.

In 1996, the BSC underwent an evolution, and from being viewed as a performance measurement framework, it came to be seen as a process of strategic management.10

The BSC represents a method of strategic control to describe, implement, and manage the strategy of the entire organization to translate missions and strategies into a complete set of performance measures. With the emergence of this new system of management, the advantage of the BSC is that it links short-term operational objectives with long-term strategic objectives by comparing financial and nonfinancial measures, retrospective and prospective indicators, as well as internal and external performance perspectives. The need to have an overarching view of the entire organizational situation means that no performance indicator can be considered individually; it is necessary to build an organized set of indicators that can be interlinked to obtain a global evaluation of organizational performance. For this reason, the BSC analyzes the outcomes of the organization in 4 key areas:

* financial performance perspective, linking the outcomes of the organization with expectations in terms of financial equilibrium

* customer perspective, referring to the need to align activities to satisfy the needs expressed by the customer to achieve a competitive advantage

* internal business processes perspective, aimed at identifying critical success fac tors for customer satisfaction to achieve objectives at different organizational levels

* learning and growth perspective, closely linked with innovating processes and education that lead to overall organizational development in terms of capabilities and competencies of employees, motivation, accountability and engagement of personnel, and information systems

In relation to the 4 perspectives chosen as the basis for measuring its performance, each organization must have a clear perception of how organizational processes can lead to the achievement of financial objectives and drive the organizational structure toward strategic choices aimed at either maintaining or achieving a competitive advantage.

The BSC has a top-down rationale in that decisions taken at a strategic level determine what happens at lower levels. The first stop is therefore to define a strategy that then needs to be translated into actions by using strategic maps. The team in charge of initiating the BSC must therefore:

* look for cause-and-effect links among mission, strategic objectives, and managerial variables; and

* give careful attention to the process by which the strategy is translated into actions of operational management.11,12

THE BSC AND THE REGIONAL PUBLIC HEALTH SERVICE IN CAMPANIA: THE CONDITIONS FOR ITS EFFECTIVE APPLICATION

The different roles of governance that the regional government may choose to play in the Regional Public Health Service do not question in any way the fundamental role of strategy in local health authorities or, above all, their discretionary powers in defining strategy. Although it is true that any increase in the regional government's dirigiste role corresponds to a reduction in the strategic autonomy of local health authorities, it does not nullify their strategic autonomy completely. Everything depends on the ability of each local health authority to interpret its own role within the limits set by the regional government (Table 1).

Table 1. The balanced scorecard in the regional public health system in Campania

Table 1. No caption available.

Table 1. (continued)

Table 1. No caption available.

The question of how much strategic autonomy can be attributed to local health authorities is often the subject of much debate. However, it should be remembered that this type of problem is part of a broader evaluation of how much autonomy public institutions have in general, institutions that, by definition, operate in a strictly regulated environment.13

As we said before, the fact that there is room for strategy in public institutions, in general, and in local health authorities, in particular, cannot be denied. Indeed, all public institutions operate in environments with some degree of dynamism, which is enhanced by processes of deregulation and the devolution of powers. It is therefore increasingly important that they carry out a dynamic analysis of their own position on the market and the role they can play in satisfying the needs of the population. Adopting a strategic approach and implementing the necessary tools are of paramount importance if the local health authority is going to be able to integrate with its environment and respond effectively to the health needs of the community.

Having clarified the discretionary powers of local health authorities in terms of strategy, it is necessary to define how these discretionary powers can be reconciled with the dirigiste role of governance exercised by the regional government. The question is how the regional government can "influence" the strategic behavior of local health authorities so that this is consistent with its own strategic goals, above all in situations of severe financial crisis such as the Regional Government of Campania is experiencing. This is by no means an easy question to address. The Regional Public Health Service, taken as a whole, can be seen as belonging to the group of flexible planning systems, or umbrella strategies,14-17 where only general objectives are defined at executive levels and it is up to lower levels to make their own strategic choices consistent with these objectives. "Those at the top of the strategic pyramid can only set general courses of action. This kind of set-up exists when the environment is complex-varied, uncontrollable, unpredictable-and underscores the existence of a vision shared by executive leaders (the strategy is desired and decided in general terms but not in detail), but at the same time the freedom to interpret this vision, which nevertheless needs to be kept under constant control to make sure the right course is being followed."18

An umbrella strategy, therefore, might not guarantee that the strategic choices made by local health authorities are fully consistent with the strategic objectives set by the regional government health department. As we have seen, this could lead to instability, in view of the fact that the Regional Public Health Service is in serious debt. To ensure consistency between the strategic objectives of the Campania Regional Government Health Department and the strategic choices made by general managers of local health authorities, the BSC was implemented to render the department's strategic, health, and financial objectives clear and operative. This tool alone, however, is not sufficient to ensure that all the actions performed by local health authorities are actually wavelength with regional objectives. It is necessary for the Regional Public Health Service to exercise a "controlling" function that is effectively able to make sure that the strategic and operational behavior of local health authorities is consistent with the priority objectives of the Regional Health Department.

By adopting the BSC (the following map shows the main sections) as a tool to describe, implement, manage, and assess its predetermined strategy, the Campania Regional Health Department is able evaluate correctly the outcomes achieved by different health facilities. However, it requires a much greater managerial effort from the local health authorities; in addition, looking to achieve their own strategic objectives, they will also have to strive to attain regional objectives. The strategies formulated by each individual health facility cannot ignore regional strategic guidelines. On the contrary, they must be absolutely consistent.b

REFERENCES