Transparency in performance measurement systems: an exploration of rationales and diverging perceptions in the hospital setting

Abstract As a consequence of an increasing economization of the healthcare sector, hospitals need to accommodate professional and managerial logics. This paper studies transparency in performance measurement systems (PMSs) and its potential to combine these logics, with the ultimate aim of mitigating tensions commonly observed in hospitals. Based on a multiple case study of four German nonprofit hospitals, we shed light on the administrators’ rationales to incorporate different levels of transparency into PMSs and illuminate the physicians’ perceptions of these different levels and their responses to them. We find that the anticipation of whether PMS transparency will initiate a profit-centric constructive benchmarking, potentially alleviating tensions between administrators and physicians, or result in a rather destructive competition between departments, leading to tensions among physicians, is crucial in administrators’ decisions on PMS transparency. We further detect gaps in the perceptions of administrators and physicians regarding transparency, anchored in issues related to controllability, reliability and comprehensibility. We find that PMS transparency may support physicians in combining professional and managerial logics at the departmental level with potentially adverse implications for departments’ contributions to the organizational objectives. Overall, the evidence provided in this paper reveals the dual nature of PMS transparency, as it may raise tensions among physicians while simultaneously mitigating tensions between physicians and administrators. By exploring the multi-layered dynamics surrounding PMS transparency, we offer a more nuanced account of PMS transparency than prior research and conclude that PMS transparency may not be a panacea in hospitals.