Governance and management: devolution versus centralism

This text has traced the way in which the London hospital system developed and assumed its present shape. Current dilemmas are in part a legacy of history and the advancement of medical science and part the result of changing circumstance and society. Similar developments have occurred in the centres of other large cities like New York, where wealth and poverty exist side by side and where highly specialised medical services and medical schools have grown up over the centuries. However in the United Kingdom, the sheer size of London's 8 million or so population, its role in government and the media, and its wide ethnic mix, make for a clutch of problems not found elsewhere.  It is now time to examine some of the main themes, and the influences which have assisted or obstructed change. The evidence of history is still around us.

The shape of the London hospital system was determined by a number of factors. In the nineteenth century London was the richest city in the world with a rapidly rising population. Medical science was in the ascendant and the London hospitals dominated medicine at least in the UK, a situation now long past.  The hospital services of London were extensive and often of the highest quality. The charitable instincts of wealthy citizens, the prestigious and lucrative private practices of the more eminent practitioners, the presence of colleges and institutions of great renown, and the work of those involved in local government all led to the creation in London, as in other major capital cities, of numerous (if poorly distributed) hospitals. Care outside hospital seems to have been stultified by the hospitals, which provided extensive outpatient services and often despised the GPs nearby.  The plethora of hospitals and the often poor quality of primary care created problems for later generations and gave rise to much antagonism between the interests threatened.

The pattern of the London hospital system was laid down before the development of modem transport systems or the introduction of the telephone. These made the migration of the population from the centre easier; slum clearances forced many people out of the centre as well and post-war re-housing accelerated this.  The reduction in the number of small businesses in central London, the creation of the first council estates on its periphery and the wish of many people to find a better pattern of life in the suburbs, knocked much of the centre out of London, only now to begin to return. Like many parish churches, the central hospitals found themselves serving fewer and fewer local residents. Nevertheless some were rebuilt and many of the teaching hospitals expanded. The development of medicine increased the capacity of the hospitals to help their patients, but investigation and treatment became ever more expensive and total expenditure rose and rose even further as medical education improved and research centres developed. Financial crisis has been a constant threat. It led to demands for better management and injections of public money, followed inevitably by government intervention in administration.

The financial state of London’s hospitals has been one of perennial crisis and remains so today. Before the NHS began, any hospital that found itself in a comfortable position financially would venture on expansion and development, creating new problems. Those under pressure, like The London, would discharge patients more rapidly, thereby increasing throughput and their total costs. Even in thye 21st century this pattern continues. New forms of treatment also increased expenditure.  Financial problems affected the size and distribution of the voluntary hospitals since patients could be treated only if money was forthcoming. It was said that a hospital need never despair as long as it was bankrupt, but the plaintive cry of ‘funds urgently needed and beds closed’ led in the end to the belief that the voluntary system was not only insolvent, but might not be worth saving. The municipal hospitals were also under financial pressure as they expanded their services.  The problem was tackled in three ways, by attempting to make hospitals more efficient, by seeking new sources of income and in the last 50 years by hospital closure, an accelerated programme of amalgamation and reconfiguration of services. The King’s Fund was founded to raise money for the hospitals but soon found itself working to improve hospital planning and administrative efficiency, so as to try to ensure that its financial contributions were not wasted, and much effort has been expended within the context of the NHS to achieve the same objective.

Prior to World War II it was difficult for the voluntaries to maintain that their system had never been healthier, or treated more patients, while conducting a shroud-waving campaign for money. In time, it was recognised that only a small part of the institutional care needed could be provided by voluntary effort, despite philanthropy. What the voluntaries had created was widely admired and they bore the burden of specialised forms of care and the education of the country’s doctors, but did not provide services for the chronically sick, the mentally ill and the mentally handicapped. Even among sufferers from acute illnesses, the majority had to rely on the massive, if somewhat shoddy, services available on the rates. Though the voluntaries tried to broaden the basis of their support by accepting payment by patients and municipal assistance, their financial position remained insecure. Continual crises led to lengthy debates about the virtues of charity, the capacity of patients to pay, hospital savings schemes, insurance and state support. These only ended when the burden of debt was eventually lifted by the NHS Act (1946)

In December 1920 after its interim report had been published, Dawson’s consultative council concluded that hospital care would never be freely accessible if patients had to pay when they became ill. The council recommended a service free at the time of use.¹ Not until after the Second World War was the state prepared to meet the resultant bill. As time passed the role of the hospitals changed. Dowling, writing about the city hospitals of the United States, divides their development into four phases.² In the ‘poor house’ phase, lasting until about 1869, the welfare functions of the almshouse tended to predominate. In the ‘practitioner’ period which followed, medical and nursing became the dominant functions. From 1910, following Flexner’s report, whole-time medical staff took control, and the education of medical students and nurses became of much greater importance. Finally, from around 1965, there was a tendency for city hospitals to seek to become leaders in the health care of their community. Our own situation has been in some ways different for organisations outwith the hospitals have led in defining health care needs, taking into account the need for good community services.  The parallels are however clear. London’s hospitals have similarly broadened their role as the social classes for whom care was provided were extended, the clinical conditions treated steadily increased in number, and educational and research activities developed.

In the nineteenth century it was broadly agreed that the role of the hospitals was to treat those of the sick poor who might recover fairly speedily, while the destitute and the chronic went to poor law institutions. Changing social attitudes and the development of scientific medicine altered this. It became harder to determine whether hospital treatment should be provided on the basis of social class, home care no longer being a viable alternative for the more prosperous. The distinction between the voluntaries, with their tradition of curing the curable, and the poor law infirmaries which cared for the rest, became increasingly distasteful. Preferential admission of the acute sick might have advantages for the doctors and the fund-raisers of the voluntary hospitals, but to transfer the chronic to second-rate institutions was to few people’s liking. It was sometimes argued that this was in the interests of the medical schools, although in fact little priority was given to medical education by the lay governors. The hospital governed the school, and not vice versa. The policy adopted by the King’s Fund in 1905, after the report of the Fry committee, reflected the widely held view that education was a secondary function of hospitals, which were primarily there to care for the sick poor.³

While the voluntary hospitals never abandoned their traditional function of treating the sick poor, the financial crises of the 1920s forced them to open their doors to a wider clientele and to rely increasingly on payment by patients and on the hospital savings associations. The municipal hospitals, as they slowly overcame their association with the poor law, also began to admit patients who were far from destitute, and took some who could afford to contribute towards the cost of their care. A greater variety of social classes came to be found amongst patients, a process culminating in the National Health Service Act (1946), which was intended to remove all barriers of class and open the hospitals to rich and poor on the same terms, free of charge at the time care was required.

The influence of the medical educational establishment first became significant during the Second World War. In line with the concepts of the Goodenough report and the idea of university medical teaching centres, the NHS Act laid a duty on the Minister to provide reasonable facilities for clinical teaching and research. Some of the large local authorities, like the LCC, had traditionally taken an enlightened view of education. Other groups viewed medical schools with mixed feelings. ‘Teaching and research institutions’, said the London community health councils in 1980, ‘not only obscure deficiencies of London’s health care but are, in part, a significant cause of these inadequacies.’⁴ Medical schools, once opposed by anti-vivisectionists and anti-science lobbies, are still not always welcomed by community-based organisations who may see them as a threat to the development of primary care.  Yet their existence influenced health service organisation, for example in the 1990s when the medical schools had amalgamated into five major groupings and more recently with the development of academic medical science centres to encourage new developments to move into general use.

Since 1945 the London medical schools had also had to face the problems of small size, necessitating merger as in the case of hospitals, of a declining population and rising intakes. To provide their students with adequate clinical experience, more teaching has been undertaken in the community, and additional hospitals have been brought into association with the university teaching centres so that virtually all the NHS hospitals in London are used for education. Medical schools have found it necessary to use such complementary hospitals for students, even in the first clinical year, and to establish new academic units away from the main medical school campus. Some of the hospitals now being used first came into association with the medical schools during the 1939-45 war, when the sector system was in operation. This development has continued, alongside the relocation of teaching.  St George's alone among the London teaching hospitals moved a substantial distance from the centre to a poorly served area and although the entry at London's medical schools has expanded, the proportion of teaching undertaken in London has steadily fallen as provincial teaching hospitals expanded and new ones were opened.

Governance and management: devolution versus centralism

Governance and management have always been contentious issues. Hospitals have usually been managed either by ad hoc bodies, established specially for that purpose as were the committees of the voluntary hospitals, by elected authorities and their committees, or latterly by a chairman, chief executive and a board of executive and non-executive directors. The recent creation of Foundation Trusts provides yet another variation. Lord Dawson’s council failed to make a recommendation about this because the members could not agree.¹  Latterly the governance arrangements seem to have depended on the managerial theory current, rather than any analysis.

As medical science developed in the 19th Century doctors increasingly pressed their claim to board representation. They maintained that since it was their skill which established the reputation of a hospital, they should have a say in its control. From its earliest days The Lancet supported them, opposing ‘closed committees’, which were self-perpetuating, and ‘irresponsible boards’ which could not be called to account by any higher authority. Nonetheless, the general view was that hospital control should be in lay hands, and only in the case of some special hospitals did doctors come to dominate. The profession might provide the skill, but the money usually came from elsewhere. Finance could be the key to governance. A hospital genuinely approaching bankruptcy often elected a new chairman. Management committees formed by a democratic process, like the boards of guardians and the LCC, were generally adamant that doctors, however expert, should not sit as members beside elected representatives. It was not until the NHS Act in 1946 that doctors gained a place on authorities as of right, only to lose this representation in more recent organisational changes in favour of a managerial - rather than an elected - élite. The establishment of Foundation Hospital Trusts has restored doctors to a place on the Board.

Another longstanding debate concerns the degree of devolution or centralism that is necessary in a health system. The battles between the Poor Law Board, the boards of guardians and the Metropolitan Asylums Board are cases in point. The argument for devolution rests upon the need for hospitals to be sensitive to local opinion and local needs. The centralist argument, on the other hand, was well expressed by the Royal Commission on smallpox hospitals, commenting on the Metropolitan Asylums Board in 1882.⁵

‘It will bring to a focus, and will be able to give instant and extended effect, to all the experience which will otherwise be scattered with various results, among a variety of bodies not always actuated by broad or accurate views. It will also be able to make the different parts of a large system work into each other, not only for the advancement of practical efficiency, but also for the careful observation, collection and publication of facts systematically observed over the large field which their operations cover. Finally, it will probably be able, from its dignity and importance, to command a higher class of administrators. The Board, if it is one, will be the picked men of the metropolis, instead of the picked men of a parish.’