“Comparing the incomparable”: Hospital costing and the art of medicine in post-war Britain

Abstract

This paper examines the relationship between medical and hospital accounting discourses during the two decades after the 1946 National Health Service (NHS) Act for England and Wales. It argues that the departmental costing system introduced into the NHS in 1957 was concerned with the administrative aspects of hospital costliness as contemporary hospital accountants suggested that the perceived incomparability, immeasurability and uncontrollability of medical practice precluded the application of cost accounting to the clinical functions of hospitals. The paper links these suggestions to medical discourses which portrayed the practice of medicine as an intuitive and experience-based art and argues that post-war conceptions of clinical medicine represented this domain in a manner that was neither susceptible to the calculations of cost accountants nor to calculating and normalising intervention more generally. The paper concludes by suggesting that a closer engagement with medical discourses may enhance our understanding of historical as well as present day attempts to make medicine calculable.

Hospital accounting and the history of health-care rationing

“…In particular, the emergence of new forms of medical knowledge was of relevance in this context. As suggested earlier, clinical knowledge had historically been perceived to be subjective and experience-based, and therefore inseparable from individual doctors (Armstrong, 1977;Gebreiter, 2015). From the 1970s onwards, there was increasing interest in statistical approaches to clinical practice, including Bayesian models for diagnostic decision-making processes and randomised controlled trials to assess the effectiveness of a wide range of clinical interventions (e.g.…”

“…Miller, Hopper and Laughlin, 1991;Walker, 2008aWalker, , 2008b, hospital accounting also emerged as a subject of historical inquiry from the 1990s onwards (e.g. Bracci, Maran and Vagnoni, 2010;Gebreiter, 2015;Holden, Funnell and Oldroyd, 2009;Jackson, 2012;Jackson et al, 2013;Jones and Mellett, 2007;Preston, 1992;Robbins and Lapsley, 2008;Robson, 2003Robson, , 2007Samuel, Dirsmith and McElroy, 2005). The resulting literature developed a strong focus on examining the relationship between hospital accounting and a wide range of factors in its social and institutional environment.…”

“…Feldstein, 1967;MoH, 1965). The control of expenditure in the NHS was exercised by means of fixed macro budgets, whilst local resources were allocated on the basis of clinical decisions, which were beyond the scope of departmental costing and whose autonomy 'remained sacrosanct' (Robson, 2003, 117;Gebreiter, 2015).…”

“…During the first few decades of the NHS, such decisions were perceived as an art, which depended above all on the skill, intuition and experience of the individual clinician (e.g. Armstrong, 1977;Gebreiter, 2015).…”

An era of governance through performance management – New Labour's National Health Service from 1997 to 2010

“…The Guillebaud Committee found no evidence for vast increases in the cost of the NHS, and did not recommend wholesale changes to its funding or administration (Anonymous 1956). The Committee did however suggest that Burdett's uniform system of hospital accounts, which the NHS had adopted (with few alterations), ought to be supplemented with a departmental costing system, which was more suited to planning, control and performance measurement (Gebreiter 2015;Robson 2003). The Committee reassured the medical profession that these management accounting measures were to be regarded as means to ensure the best value for money rather than imposing restrictions on the Service (Anonymous 1956, 32).…”