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U.S. Department of Health and Human Services
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Performance Management & Measurement

The purpose of this module is to introduce the fundamental concepts of performance management and assist an organization to develop a practical strategy for achieving its quality improvement (QI) goals. This module highlights the use of evidence-based performance measures to set QI goals and evaluate an organization's progress in meeting them. The following is an overview of the content found within each section of the module:

Part 1: Overview

Part 2: Performance Management Process

Part 3: Related Resources

Part 1: Overview 


Health-care providers share a common goal: providing high quality care to their patients.  Measuring performance can help you understand how well your organization is accomplishing this goal.  It allows for an analysis of where and what changes need to be made in order to improve performance and the quality of care provided.  Measuring performance also allows providers to understand what is working well; information that can be shared with other providers who can learn from their success.

What Is Performance Measurement?

Put simply, performance measurement is the regular collection of data to assess whether the correct processes are being performed and desired results are being achieved.

The Turning Point Guidebook for Performance Measurement (PDF - 81 pages) provides several definitions of performance measurement including:

  • Selection and use of quantitative measures that provide information about critical aspects of activities, including their effect on patients. Measures of what “actually happened” can be compared to goals set by your organization. 
  • Performance measurement analyzes the success of a work group, program, or organization's efforts by comparing data on what actually happened to what was planned or intended.
  • Performance measurement asks, “Is progress being made toward desired goals? Are appropriate activities being undertaken to promote achieving those goals? Are there problem areas that need attention? Successful efforts that can serve as a model for others?”

The focus of performance measurement is less on the individual provider and more on the organization as a whole to evaluate whether an adequate structure and correct processes are in place to achieve the org

Why Measure Performance?

There are many reasons why an organization should measure performance:

  • Quality Improvement.  Measuring performance can tell you what you’re doing well so you can share your successes and also reveal areas where you need to make adjustments.  Measuring performance tells you whether you are achieving your ultimate goal of improving patient outcomes.  
  • Transparency.  Stakeholders outside of the organization--patients, funders, patient advocates--want to know about the quality of care being provided.  Patients want information that allows them to make informed choices about their health care services.  Sharing performance information can also help an organization gain support and funding for its programs.
  • Accreditation.  Organizations, such as NCQA, the Joint Commission, and the Accreditation Association for Ambulatory Health Care (AAAHC), evaluate health care provider organizations to provide accreditation or certification signifying that those places meet certain performance standards.
  • Recognition as a Patient Centered Medical Home (PCMH).  A Patient Centered Medical Home (sometimes known as a Primary Care Medical Home) is defined as “an approach to providing comprehensive primary care…that facilitates partnerships between individual patients, and their personal physicians, and when appropriate, the patient’s family” (Joint Principles of the Patient Centered Medical Home ).  NCQA, the Joint Commission, and AAAHC offer accreditation programs for recognition as a Patient Centered Medical Home.
  • Participation in financial incentive programs or demonstrations.  For example, The Centers for Medicare and Medicaid Electronic Health Record Incentive Programs provide incentive payments to eligible professionals, eligible hospitals and critical access hospitals (CAHs) as they adopt, implement, upgrade or demonstrate meaningful use of certified Electronic Health Records (EHR) technology.  Eligible professionals and hospitals who participate in the program must be able to record, store, and report clinical quality measures (CQM), which CMS defines as the “processes, experience, and/or outcomes of patient care, observations or treatment that relate to one or more quality aims for health care such as effective, safe, efficient, patient-centered, equitable, and timely care.”  

How Can We Better Manage Performance?

After measuring performance, the next step is to use the information to improve care.  Performance measures provide a picture of your organization’s quality, but further research will be necessary to determine the factors that influence the measure results and how you can learn from positive results and make changes where performance is not at an optimal level. 

Performance management is when an organization uses performance measures and standards to achieve desired results.  It is a forward-looking, continuous process.  Performance management can be implemented at the program, organization, community, and state levels.

From Silos to Systems: Using Performance Management to Improve the Public’s Health (PDF - 44 pages) describes four components of performance management:

  • Performance standards: Establishment of organizational standards, goals, and targets
  • Performance measures: Development, application, and use of performance measures to assess achievement of standards
  • Reporting of progress:   Documentation and reporting of progress in meeting standards
  • Quality improvement:    Establishment of a program or process to achieve quality improvement based on performance standards, measurements, and reports

Choosing goals for performance management

In selecting initial targets for performance management, your organization should ask some basic questions (based on Institute for Healthcare Improvement methodology):

  1. What are we trying to accomplish?
  2. How will we know that a change is an improvement?
  3. What changes can we make that will result in improvement?

For more detail on quality improvement, see Module 3: Developing and Implementing a Quality Improvement Plan.

What Does a Performance Measure Look Like?

A performance measure has several components:

  • Numerator:  The number of patients who meet the definition of the measure.
  • Denominator:  The number of patients who are considered eligible
  • Exclusion:  Certain patients who should be subtracted from the denominator of an individual measure.
Types of Performance Measures

Health organizations like yours have been conducting evaluations and assessments for years.  Some of these tools can help you understand how well your organization is conducting your current set of QI activities and others can help your organization understand whether there is an altogether different set of activities you should be considering. Both of these are important components of providing quality care.  The use of diverse tools will help provide a comprehensive picture of health care quality at your organization. There are three main types of measures:

  • Structural: Measures the organization’s capacity and the conditions in which care is provided by looking at factors such as an organization’s staff, facilities, or health IT systems.
    Example: Adoption of medication e-prescribing.
  • Process:  Measures how services are provided, i.e., whether an activity proven to benefit patients was performed, such as writing a prescription or administering a drug.
    Example: Cervical Cancer Screening - The percentage of women who had a cervical cancer screening with a Pap test.
  • Outcome:  Measures the results of health care.   This could include whether the patient’s health improved or whether the patient was satisfied with the services received.
    Example: Diabetes - Average hemoglobin A1c level for population of patients with diabetes.

Additional measures include:

  • Balancing Measures: Ensures that if changes are made to one part of the system, it doesn’t cause problems in another part of the system.
    Example:  For increasing compliance with regular visits for preventive care or required testing make sure that scheduling capacity is not exceeded.

Example of an Outcome Measure: Controlling High Blood Pressure

Example of an Outcome Measure: Controlling High Blood Pressure.

 Example of a process Measure: Prenatal Screening for HIV

Example of a process Measure: Prenatal Screening for HIV.

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