Inside Hospital Trusts: Management Styles, Accounting Constraints

Citation

Roslender, R. (1999), "Inside Hospital Trusts: Management Styles, Accounting Constraints", Accounting, Auditing & Accountability Journal, Vol. 12 No. 2, pp. 263-267. https://doi.org/10.1108/aaaj.1999.12.2.263.1

The aim of this short research monograph is that of presenting an overview of management’s perceptions of, and the role of accounting in, the management of hospital trusts. A hot topic throughout the 1990s, the Scottish Institute is to be applauded for commissioning the study reported here. It is also to be congratulated for its choice of authors, two of the UK’s leading researchers on contemporary National Health Service management and accounting, in association with a senior figure in Scottish accountancy circles who is also a non‐executive member of an NHS hospital trust. Together they succeed in delivering a contribution to the literature which is to be valued for two reasons. First, the study adds greatly to our understanding of accounting (and management) in action in the British NHS. Second, and perhaps more significantly, it does so in a way which confirms the merits of embracing a social scientific methodology in the study of business and management issues.

The monograph has five chapters together with an executive summary. Chapter one provides the context for the study, namely the introduction in 1989 of the concept of the internal market for healthcare provision, and the reorganisation of the institutional structure which saw the emergence of hospital trusts as the providers of healthcare, now to be purchased in the new quasi market by the health boards and health authorities. The role of executive and non‐executive directors within this structure, and the increased emphasis on accounting and financial information and controls are then concisely presented. Carefully interwoven with this factual material is a clear indication of the main concerns which a variety of stakeholders held about these changes, together with some relevant research findings. The chapter concludes with two comparatively short sections, the first on the authors’ research questions, the second on their chosen research method: three in‐depth case studies in which the principal source of information is derived from thematic interviews with key actors within the hospital trusts.

Chapters two, three and four are narratives designed to convey the everyday reality of management and accounting in three hospital trusts. As such they combine description, analysis and interpretation, which taken together constitute the sort of overview which the researchers are seeking in the project, ie the order of understanding which an empirical social scientific methodology can furnish. In all three trusts the researchers explore a range of issues with representatives of the three groups who constitute the trust management teams: executive directors; non‐executive directors and clinical directors. Interestingly the authors find it possible to report their findings in the case of the clinical directors under the same headings: the interface of management and clinicians; the role of financial information; and the relationship with the health board. Representatives of the executive teams, perhaps understandably, wanted to talk for some of the time about their current, particular difficulties, although some common issues emerge. In the case of the non‐executive directors, who one suspects may have been more difficult to gain access to, the narratives tend to focus on the endeavours of the individual chairmen, and on the frustrations experienced by colleagues in enacting a role which has many dimensions associated with it, not least the poison chalice of importing business awareness into trust management.

In their concluding chapter the authors provide a summary of the key issues arising from their three case studies, much the same material being reported in the executive summary at the beginning of the monograph. It is laudable, although not surprising, to find that they are quite prepared to incorporate a measure of pointed commentary and/or policy implications in setting out their concluding observations. In the case of the impact of accounting controls, while devolving budgets to clinical directorates still offers much room for improvement, the real damage is being done in relation to cash releasing efficiency savings which predate the introduction of trusts. The internal market concept has not been realised in the case of these three trusts. Worse still, the contracting process which has emerged has become confrontational, and too often focused on short‐term issues. The subsequent decision to reject the market concept is therefore to be welcomed. On the evidence of their case materials the authors are of the view that the trust concept should not be abandoned in any future reorganisation of the NHS, since trusts and their management teams have “by and large, worked well” (p. ix), despite operating in a flawed and politically charged environment. However, there is still much scope for improvement. A more critical perspective should be adopted in respect of the role which accounting and finance numbers might play in the future management of healthcare. The division of labour between clinical directors and executive teams needs to be explored further, while the importance of effective communication within any such relationship should never be forgotten. The frustrations clearly associated with the current role of non‐executive directors must also be resolved. Finally, it is important that hospital trusts begin to explore how they might become more accountable to their local communities. As the authors comment in their closing sentence, it is necessary that trusts avoid the “danger of replacing the iniquities of the market with the inefficiencies of centralised bureaucracies”.

The authors have produced an extremely well‐written monograph, largely devoid of the stylistic quirks which all too often deflect the reader’s attention away from the main issues. It is an equally well‐balanced piece of work combining elements of description, analysis and interpretation with contextualising detail and policy implications. For this reader, someone who is not a specialist in the public sector accounting area, the authors succeed in providing rather more than an overview. They offer a wealth of rich insights about what is currently happening inside British NHS hospital trusts, where management teams continue to struggle to accomplish the ideologically‐driven objectives of the few while providing a quality service for the many. The authors are able to do so with such ease because they have embraced and explored the potentialities of a case study approach underpinned by a social scientific methodology. Consequently, this a contribution to the literature which deserves to be read by a wide audience, both in accounting and finance, and across the spectrum of business and management disciplines. As an exemplar of the rapidly maturing tradition of studies of accounting and management in action, it has much to commend it.