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Purpose – The purpose of this study is to examine the importance of balanced scorecard (BSC) in Swedish emergency hospitals, that is, to describe its prevalence and its use in these hospitals.

Methodology/approach – The study is based on a questionnaire administered to financial managers in all of Sweden's emergency hospitals. The questionnaire investigates the prevalence of the BSC, the reasons for its implementation, and how BSC is used.

Findings – The study shows that 65% of Swedish emergency hospitals use the BSC. The use of the BSC was motivated by a need to make strategy clear and to obtain a more comprehensive view of organizational performance. BSC is used mainly for measurements connected to the organizations' strategy and to create goal congruence. Performance monitoring is only of secondary importance, even though emergency hospitals with more than five years' experience with the BSC tend to use it for that purpose. The BSC is almost never used in the hospitals' reward systems.

Research implications – The findings suggest that BSC in hospitals is mainly important for implementing strategy and stimulating strategy discussions that create goal congruence. Performance monitoring is only of secondary importance, but becomes increasingly important for seasoned BSC users.

Originality/value of paper – Few studies have surveyed the importance of BSC in healthcare organizations. By pointing out the importance of BSC in Swedish healthcare, this paper calls for similar studies in other healthcare contexts.

In 2000 the Skåne Region (a public authority) and a private contractor made a five‐year agreement for the provision of both in‐patient care and out‐patient medical services to about 30,000 inhabitants in the south‐east part of the region. The Skåne Region is the main provider of health care to about one million inhabitants in the south of Sweden and is responsible for all health care (private and public), including ten hospitals. This paper seeks to answer the question of how the Skåne Region can control and cooperate with a private contractor, entering into competition with the public health care providers in the region.

This is a longitudinal study conducted between 2001‐2006. It is based on 28 taped interviews with employees responsible for the contracting process, participating observations and comprehensive secondary material. The study presents experiences made by the contractor and the public authority on how to work out and follow‐up assignments within the health care sector regarding patient interest, public interest and professional medical interest.

Measurement within the frames of the balanced scorecard (BSC) made it possible to control both volumes and health care quality delivered by the private competing contractor. The political purchaser claims that the Skåne Region has established a cost‐effective and successful control system based on trust and measurement.

This paper reports on a control system, between public purchaser and a private provider within health care, that focuses on and follow‐up not only health care production but also health care quality.