DEVELOPING KEY PERFORMANCE INDICATORS

1 DEVELOPING KEY PERFORMANCE INDICATORS A TOOLKIT FOR HEALTH SECTOR MANAGERS December 2013 This publication was produced for review by the United States Agency for International Development. It was prepared by Steve Rozner for the Health Finance and governance Project 3 The Health Finance and governance Project USAID s Health Finance and governance (HFG) project will help to improve health in DEVELOPING countries by expanding people s access to health care. Led by Abt Associates, the project team will work with partner countries to increase their domestic resources for health, manage those precious resources more effectively, and make wise purchasing decisions.

2 As a result, this five-year, $209 million global project will increase the use of both primary and priority health services, including HIV/AIDS, tuberculosis, malaria, and reproductive health services. Designed to fundamentally strengthen health systems, HFG will support countries as they navigate the economic transitions needed to achieve universal health care. December 2013 Cooperative Agreement No: AID-OAA-A-12-00080 Submitted to: Scott Stewart, AOR Office of Health Systems Bureau for Global Health Recommended Citation: Rozner, Steve.

3 December 2013. DEVELOPING and Using Key PERFORMANCE INDICATORS A Toolkit for Health Sector Managers. Bethesda, MD: Health Finance & governance Project, Abt Associates Abt Associates Inc. | 4550 Montgomery Avenue, Suite 800 North | Bethesda, Maryland 20814 T: | F: | Broad Branch Associates | Development Alternatives Inc. (DAI) | Futures Institute | Johns Hopkins Bloomberg School of Public Health (JHSPH) | Results for Development Institute (R4D) | RTI International | Training Resources Group, Inc.

4 (TRG) DEVELOPING AND USING KEY PERFORMANCE INDICATORS A TOOLKIT FOR HEALTH SECTOR MANAGERS DISCLAIMER The author s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development (USAID) or the United States Government. i CONTENTS Acronyms .. iii Acknowledgments .. v Introduction .. 1 What are KPIs? .. 3 Using KPIS in the Health Sector .. 5 Linking KPIS to Strategy .. 7 Linking KPIS to Programs .. 11 Characteristics of Good KPIS.

5 15 Distinguishing Causes from Results .. 17 Types of INDICATORS .. 18 Setting KPI Targets .. 23 Using Health Information Systems to Manage KPI Data .. 31 Defining the Frequency of KPI Reporting .. 35 Interpreting KPI Data .. 37 Conclusion .. 39 Annex A: Templates for Logic Models .. 41 Annex B. Special Types of INDICATORS .. 43 Annex C. Sample KPIs .. 47 Annex D: KPI Template .. 51 Annex E: References .. 55 List of Tables Table 1. Cause and Result INDICATORS : A Compariso .. 17 Table 2. Inputs, Outputs, Outcomes, and Efficiency INDICATORS : Strengths and Weaknesses.

6 19 Table 3. Input, Process, Output, Outcome, and Efficiency INDICATORS : Some Basic Illustrations .. 21 Table KPI Template .. 51 Table Example of Clinical KPI Using the KPI Template .. 52 List of Figures Figure 1. Using a Logic Model to Sharpen Focus on Strategic Plan Goals .. 8 Figure 2. Logic Model for Program Planning .. 12 iii ACRONYMS ART Antiretroviral therapy ARV Antiretroviral HFG Health Finance and governance Program (USAID) HIS Health Information System GFMIS Government (integrated) financial management information systems HMIS Health Management Information System ICT Information and communications technology KPI Key PERFORMANCE indicator MDS Minimum data set MOF Ministry of Finance MOH Ministry of Health M&E Monitoring and evaluation PI PERFORMANCE indicator SMART Smart, Measurable, Achievable, Relevant.

7 Time-bound TB Tuberculosis USAID United States Agency for International Development WHO World Health Organization v ACKNOWLEDGMENTS This toolkit would not have been possible without the trust, patience, and cooperation of Jeremy Kanthor and the Health Finance and governance (HFG) Program team. Special thanks also go to Fred Rosensweig, Victor Zafra, and Mark Gallagher for their illuminating suggestions and feedback. Of course, any errors, omissions, or contradictions that remain are solely the responsibility of the author 1 INTRODUCTION Over the last several decades, governments worldwide have introduced budgetary and reporting mechanisms designed to demystify government operations and illuminate how public funds are being used to achieve policy goals.

8 Whether dubbed program budgeting, PERFORMANCE budgeting, or results-based budgeting, the trend has seen a conceptual shift from an approach that was heavily oriented to inputs, to models designed to provide government decision makers, parliaments, and citizens with a clearer picture of what governments achieve for the public funds they spend. PERFORMANCE measurement, and the use of key PERFORMANCE INDICATORS (KPIs), is an integral part of any of these models, providing feedback to inform and improve public service delivery and promoting accountability by demonstrating to key stakeholders the results that government is achieving.

9 Few economic sectors depend on PERFORMANCE information as intensively as does public health, where safety, speed, access, and cost can literally be life or death matters. With growing demands to improve health care quality, coverage, and outcomes, health sector decision makers not only face the challenge of allocating resources to the highest priorities, but also of ensuring that those resources are put to good use, deliver value for money, and achieve the intended outcomes or impact. KPIs are central to this agenda. Moreover, because of their importance to both budget management and accountability, KPIs also represent a key point of convergence between ministries of health (MOHs) and ministries of finance (MOFs) or, where separate from the MOF, the central budget authority.

10 This tool provides useful guidance on DEVELOPING and using KPIs and building these into the budget process, with a particular focus on the health sector. Specifically, it offers government managers responsible for planning, program implementation, monitoring and evaluation (M&E) particularly in central or federal ministries of health guidelines and tips for thinking strategically about program planning, defining PERFORMANCE INDICATORS , setting KPI targets, and harnessing PERFORMANCE information. These factors are not presented as a series of steps, and although some may follow a logical order, the KPI journey does not always follow a straight line, but is part of a dynamic process influenced by programmatic, institutional, and political imperatives.