How Performance Measurement Could Reshape Value Creation in Public Healthcare

Public healthcare systems around the world are under relentless pressure. Aging populations, rising chronic disease burdens, technological disruption, pandemic aftershocks, and volatile macroeconomic and political environments have converged to squeeze budgets while demand keeps climbing. Against this backdrop, a new exploratory case study published in BMC Health Services Research examines a question that sits at the heart of modern health administration: does measuring performance actually translate into creating value for patients and society? The study, conducted by Alberto Sardi of the University of Turin and Enrico Sorano of the University of Enna Kore, investigates the relationship between performance measurement, performance management, and value creation within a leading national health service, offering one of the first applications of a conceptual framework developed by Smith and Bititci in 2017 to the complex world of public healthcare.

The theoretical foundation of the research rests on a distinction that many healthcare administrators conflate. Performance measurement refers to the technical apparatus of quantifying organizational activity: indicators, dashboards, benchmarking systems, and scorecards that capture how efficiently beds are occupied, how quickly patients move through emergency departments, and how outcomes compare across units. Performance management, by contrast, is the managerial process that surrounds those numbers: the conversations, target-setting exercises, incentive structures, and strategic reviews that determine whether measurement data actually changes behavior. Smith and Bititci’s framework argues that value creation emerges only when these two layers interact effectively, so that measurement feeds management and management, in turn, refines what gets measured. The Italian researchers set out to test how that interaction plays out in a national health service, a setting where profit motives are absent but accountability to taxpayers and patients is paramount.

The methodological approach was deliberately exploratory. Rather than deploying large-scale surveys, the researchers conducted an in-depth case study within a leading national health service, gathering qualitative evidence through interviews with professionals embedded in the organization. The case study design is well suited to questions where theory has not yet been fully tested in practice, allowing the investigators to trace the mechanisms linking measurement systems to managerial action and, ultimately, to value creation. The study was non-interventional, involving only adult professionals, with informed consent obtained from all participants and data treated confidentially and anonymously. No patients, patient data, or biological materials were involved, and participation was voluntary, reflecting the study’s focus on organizational and managerial dynamics rather than clinical outcomes.

The findings reveal a nuanced picture. On one hand, the case organization demonstrated a moderate level of democratic and participative performance management, meaning that staff across different levels had some degree of involvement in how performance was defined, discussed, and acted upon. This participative dimension matters because research in organizational behavior has long suggested that performance systems imposed from above tend to generate compliance rather than commitment, while systems co-created with frontline professionals tend to produce genuine engagement. On the other hand, the study identified significant limitations in the organization’s ability to capture value creation, suggesting that the measurement apparatus, however sophisticated, was not fully translating into a documented understanding of the value generated for patients, communities, and the broader health system.

Value creation in healthcare is a notoriously slippery concept. Unlike private-sector firms, where value can often be proxied by revenue, market share, or shareholder returns, public healthcare organizations generate value across multiple dimensions simultaneously: improved health outcomes, patient satisfaction, equity of access, system resilience, and efficient use of public funds. The study’s finding that value creation was difficult to capture points to a structural gap in how performance frameworks have been designed for the public sector. Many health systems have imported measurement tools from private-sector management accounting, where financial metrics dominate, without adapting them to the multidimensional nature of public value. The result is often a paradox in which organizations measure intensively but struggle to articulate what all that measurement has actually created.

From the interviews, four areas for managerial improvement emerged, and these constitute the study’s most actionable contribution. The first is enhancing organizational alignment, ensuring that strategic objectives cascade coherently from national health policy down to individual departments and that frontline staff understand how their daily work connects to institutional goals. Misalignment between top-level strategy and operational practice is a well-documented failure mode in large public organizations, where performance indicators may be collected diligently at the unit level without ever informing strategic decisions at the system level. The second area is optimizing efficiency and effectiveness, a pairing that requires health managers to look beyond cost containment toward the broader question of whether resources are deployed in ways that maximize health outcomes per unit of expenditure.

The third improvement area is fostering stakeholder engagement, extending the circle of participation beyond internal staff to include patients, communities, and partner organizations. In public healthcare, stakeholders are not merely customers but co-producers of health, and their involvement in defining what counts as valuable performance can reshape the entire measurement architecture. The fourth area is increasing investments in technology, infrastructure, and human capital, reflecting the recognition that measurement systems and managerial processes cannot function in isolation from the material and human resources that underpin service delivery. Digital health tools, modernized facilities, and continuous professional development are not peripheral concerns but prerequisites for any performance system that aspires to capture and create value in a modern health service.

The study’s contribution to the academic literature lies in addressing a gap in the application of Smith and Bititci’s 2017 conceptual framework within a complex and challenging public sector context, namely national health services. By testing the framework in an environment characterized by political oversight, funding uncertainty, and competing stakeholder demands, the researchers have extended its reach beyond the private-sector settings where it was originally developed. The identification of four managerial improvement areas also carries practical implications for health administrators seeking to strengthen the interaction between performance measurement and performance management, with potential downstream effects on value creation. The findings suggest that the pathway from measurement to value is neither automatic nor straightforward, but can be cultivated through deliberate managerial attention to alignment, efficiency, engagement, and investment.

The broader context of this research is a healthcare landscape where performance measurement and management have become increasingly important for the efficient allocation of resources in public health services. Healthcare systems face multiple simultaneous challenges, including technological change, pandemics, and uncertain macroeconomic and political environments, all of which complicate the implementation of performance frameworks. In Italy, where the study’s authors are based, the national health service operates within a fiscal framework shaped by gross domestic product constraints and monitored by the Italian National Institute of Statistics, adding layers of accountability that make performance management both more necessary and more complex. The tension between fiscal discipline and service quality is a defining feature of contemporary public healthcare, and performance measurement systems sit precisely at that intersection.

For health systems worldwide, the study offers a sobering but constructive message. The apparatus of performance measurement, however technically refined, does not by itself create value. Value emerges when measurement systems are embedded in participative management processes, when organizational alignment connects strategy to practice, when efficiency gains are pursued alongside effectiveness in health outcomes, when stakeholders are engaged as partners rather than subjects of measurement, and when investments in technology, infrastructure, and people provide the material foundation for improvement. The four managerial improvement areas identified in this case study provide a roadmap for administrators willing to move beyond the checkbox culture of performance reporting toward a genuine culture of value creation. As health systems continue to navigate an era of constrained budgets and rising demand, the distinction between measuring performance and managing it toward value may prove to be one of the most consequential ideas in modern healthcare management.

Subject of Research: From performance measurement and management to value creation: an explorative case study in public healthcare

Article Title: From performance measurement and management to value creation: an explorative case study in public healthcare

Article References: Sardi, A., & Sorano, E. (2026). From performance measurement and management to value creation: an explorative case study in public healthcare. BMC Health Services Research. https://doi.org/10.1186/s12913-026-15675-9

Image Credits: AI Generated

DOI: 10.1186/s12913-026-15675-9

Keywords: performance, measurement, management, value, creation, explorative, case, public, healthcare, scientific research