Dr Errol Pickering, International Hospital Federation Director-General, on hospitals' changing role

Money has always been a major influence on hospitals, and the problem has never been a superfluity of it. In recent recessionary times, cost pressures have caused us to think about how we do our work and the nature of the work we do. In general, our task has been to do much more work with much less money. Indeed, the whole financial system of hospitals and health services has been restructured in many countries to the point where there is some convergence of views being established. I refer, of course, to the development in the US of health management organisations and their related managed care systems and to the funder/provider split concept operating in the UK. This funder/provider split concept is now being introduced by other nations.

What we have is therefore a kind of general view that controlled competition is a useful approach in not only controlling costs in hospitals but also to appropriately change their roles to more effectively meet the needs of their communities. Both systems provide incentives to treat patients at a lower level of the service and to focus responsibility on the 'gatekeeper' - that is the GP gets to direct the health services traffic. These systems have resulted in higher patient throughput, shorter lengths of stay and hence to bed closures. Hospitals have also been extending their roles to seek new markets as an alternative to closure.

There has also been experimentation with other forms of negative financial incentives. In Germany for example, a threat by government that would have had a potential negative impact of only 1 per cent on physicians' salaries, with regard to appropriate medical prescribing, resulted in massive national savings on drugs. In Australia also, policies of non-reimbursement by the government insuring scheme only for specific medical procedures has greatly influenced the provision of such services.

One aspect of hospital financing is of particular concern: the issue of allowing private for-profit hospitals to operate in poor countries disturbs many of my developing nations colleagues. They tell me that this policy is very destructive of the 'Robin Hood' approach to the provision of care to indigent people which had existed in their countries in the past. That is, they were able to take fees from the wealthy in their higher category wards to pay for the care of the poor in their lower category wards. Now the wealthy seek care in the for-profit private sector and the rich are no longer available to be robbed!

Increased public awareness and government insistence have encouraged us to see our role as not only providing health services but quality services. The expansion of hospital accreditation schemes to many countries is having a beneficial impact on standards and practices and is beginning to bring about an 'internationality' of patient care standards.

'Total quality management' systems too are changing the ethos of hospitals to be more concerned with quality as a central focus. New forms of quality measures, however, are perhaps of particular note. I refer to the British patients' charter in particular. This is now much copied in other nations and is adding a dimension to the question of quality by focusing on the patients' perspective. The British government has gone further with this and published 'league tables' of hospitals. A table of hospitals, that is, which best complied with this patients' charter.

In the US, and now in other countries, you also see the public display of mortality data for hospitals for a particular diagnosis. Also, new approaches to the organisation of care emphasise the patient's perspective. These are of course the new patient focused care systems. This approach to care, in turn, is nurturing multi-disciplinary staff evolution.

Research is also showing us that quality improves with volume of specialist procedures. This is promoting rationalisation of speciality units and changing their roles from generalist to specialist facilities. A general observation is that quality issues are changing hospital roles to be more subservient to our communities and less a model of aloof professionals.

Financial stringency of governments and insistence of insurers have forced hospitals to see themselves less in a charity role and more as an industry. This has led to the spread of diagnosis-related groups in various guises around the world and, in turn, to standard treatment protocols for particular diagnosis. In turn, we see the increasing use of diagnosis-related critical paths for treatment organisation and timing.

It occurs to me that the next natural step is to link the German physician financial disincentive approach to the clinical path process. Apart from a minor or major medical revolt, I wonder what the impact would be?

Computers, which are a central tool for these techniques, have also provided us with opportunities to change our service role. Increasingly hospital patient data is 'on line', with computers connected to GP offices and community health centres. This can compensate for our shortened acute phase stays and provide information for continuity of care.

Politics and political ideology have been a potent force in changing hospital behaviour. Indeed, it used to be that hospitals were built at whim for political purposes. However, there is an increasingly mature political environment. Indeed, hospitals which used to be politically sacrosanct are, in some circumstances, the focus of political attack.

In many nations, whilst there may be more maturity concerning the numbers and scale of hospitals, there is, however, a new form of political naivete influencing health service development. There are at least three elements to this. Firstly, some politicians and their advisers think that good community health care is cheap when in fact it is an ever-expanding universe of costs with many a black hole awaiting to funnel in money. Secondly, they see that by addressing the demands of the community 'squeaky wheels' quality care is being delivered. Thirdly, they believe that health promotion is a long-term solution to health care costs.

It is essential, therefore, that decisions about the roles of health service providers should be based on measures of quality of service not on unproven notions.

Another quasi-political social development is forcing some changes in hospital services. This is of course the ageing of many nations' populations. This has in some cases solved potential problems of hospital closures in that some hospitals are suitable for reconfiguration as long-term care facilities.

A further sign of political maturity is that governments are more trusting and permit decentralisation of power to hospital level. This gives the hospital the opportunity to develop its role according to community needs in addition to allowing management innovations.

The OECD estimates that 5 per cent of hospital cost-inflation relates to technological development in medicine. But apart from cost, technology has profoundly affected hospitals. Up to 70 per cent of all elective surgery is now being done on an ambulatory care basis. In other hospital areas, technology has increased our speed of diagnosis of treatment. As well as increasing the volumes of work we can deal with, technology has enabled us to be a rapid input-output facility. Micro-technology is also enabling health clinics and practitioners to do more procedures outside hospitals and in turn affecting the role of hospitals.

The scenario is rapidly developing whereby hospitals are but large intensive care units with ambulatory care satellites with computer linkages to other providers.

But what about the future impact of technology on hospitals? Biogenetics research is presenting us with potential to treat some 4,000 previously untreatable diseases. It also provides the possibility for new forms of vaccines to prevent disease. I think it is not possible to predetermine how this will affect the hospital role. However, from what we've seen to date, for example, with the care of cystic fibrosis using biogenetic agents.

It would seem that the hospital will be playing a very major part in this new medical dimension.

I am sure that telematics and robotics will also change the way we provide hospital services but again to be specific would only be conjecture.

Many nations are now setting up bodies which research medical procedure efficacy and assess technology. These are already impacting on the role of hospitals. Epidemiological assessment of health service needs is also replacing our previous guess work methods and hence allowing rational resource allocation.

Governments are also developing formal means of assessing health gain related to their health resourcing policies. All of these approaches are already impacting on hospital roles. The speed of this is however likely to dramatically increase, that is, I foresee 'Oregon' type thinking affecting the nature of the work we do. This model involves a rational rationing approach to health care delivery.

The hospital will remain, even in its changed role, a powerful community symbol involved in many aspects of the lives of the citizens in its community. That is, in employment, local economics, health status and general welfare. It will make politicians' work easier if they make use of this symbolism by asking hospitals to see themselves as part of the overall health systems objective of raising the health care status of its community.

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©Kensington Publications 1996