1. Nov 2001 00:00 1. Feb 2004 15:00

State takes over all public hospitals

The State takes over responsibility for the hospitals fra january 1. 2002. Why is that?

In April 2001, the Norwegian government put forward the bill concerning central government take over of all public hospitals. Commenting on the background for the bill, current health minister Tore Tønne said:

“The aim of the hospital reform is to offer professional and consistent health services to all who need them, when they need them, regardless of place of residence, age, sex and personal economy.

A steadily increasing portion of society’s resources goes to the health sector. Society uses NOK 40,000 million annually on the hospitals and other specialist health services.

Health spending in Norway is among the highest in Europe - and highest among the Nordic countries - and we will continue to use more. But at the same time we will organise our affairs so that we get as much as possible out of this money - to the benefit of all who require health services.”

The crux of the bill is that the State takes over all public hospitals. They will be run as public health enterprises wholly owned by the State.

The State will have total responsibility for the public hospitals in Norway. Five regional public health enterprises are to be established with responsibility for hospitals and other specialist health services within their respective regions.

The public health enterprises will assume employer’s liability for the employees, who will continue with the same rights they have today.

A democratically elected advisory body will be established for each of the public health enterprises. Through these, locally elected representatives will get the opportunity to influence the development of the regional health service.

In accordance with the bill, the public health enterprises will also have a duty to call on the advice and experience of patients and other users of the services.


INTERNAL REFORM
Renewal based on the values of the welfare state
The proposed reform that is presented here for the specialist health service will build further on the welfare state’s fundamental values of equality, fairness and solidarity.

It is the responsibility of government to give the entire population equal access to professional health services. The renewal is combined with continuity and respect for that which has already been achieved.

This value-oriented anchoring in the ideals of the welfare state is therefore inherent in the proposals for changes in relation to ownership, organisation and responsibility.

However, the Government’s ambitions with this reform are not limited to taking over ownership and drawing new organisational charts. The reform will give a substantial and regenerative content, where accessibility, quality and care for the individual will be able to be combined with an efficient resource management and a consistent social and administrative responsibility.

In its aim, this is a reform for allocating responsibility. Ownership is to be regarded as a tool for taking over total responsibility. The taking over by the State of ownership and responsibility through the establishment of enterprises is to be regarded as a tool and not as an expression for any all-consuming ambition to control.

The aim of the State taking responsibility through this reform is to release and redeem resources, initiative and competence for the benefit of the country’s population and health service. By assuming responsibility, the Government will aim at getting rid of undesirable situations, whether it be unreasonably long waiting time or an accumulation of corridor patients.

It involves organising the health service so that we are in a better position make use of the country’s entire professional and material health resources. Spare capacity and skills must be used to solve unsolved tasks.

Organisational and electronic networks will enable closer cooperation and teamwork, as well as more exchange of information, transfer of competence, and training within and between the regional public health enterprises. Such an organisation of cooperation across physical and institutional boundaries is designed for a country with Norway’s geography and distances.

The numerous and relatively small units in the Norwegian health sector can be sustainable through connecting such virtual organisational networks.

In knowledge-based institutions such as hospitals, documentation and reporting form important administrative and managerial elements. Through fact-based reports and decisions we can pave the way for a transparent and evaluative culture with emphasis on learning, development and adaptation.

Continuous documentation and reporting is therefore important as a common point of reference, both for understanding and taking action. However, reporting is equally important, vis-à-vis the surroundings, to patients and population, public and authorities.

The enterprise organisation, therefore, should be accompanied by clear reporting procedures with a view to making the results of the hospitals’ activity as accessible as possible. In an information society, consequential reporting and documentation also has an important democratising dimension.

The proposed reform places as much emphasis on cooperation as it does competition. Cooperation between units that alone stand vulnerable will be a condition for taking care of the essential considerations to quality, service and accessibility.

Cooperation is also a prerequisite for avoiding unnecessary and expensive duplication of equipment and personnel and to avoid inexpedient competition for scarce human resources. Nor is it in society’s or the patient’s interest that hospitals compete over patient groups where the consideration of critical volume promises a certain concentration.

At the same time, the hospitals must expect to be measured and compared against the requirement for accessibility, quality and cost-effectiveness. The hospitals must be prepared for a degree of competition under framework conditions that are as equal as possible otherwise.

In a system with free choice of hospitals and result-oriented financing, it is presupposed that the hospitals adjust to the operational challenges that result from these arrangements. The considerable authority granted the individual hospital as a result of the reform simultaneously implies that the hospitals to a greater degree will have to be made responsible for the results achieved.

An aim with State take-over of the hospitals is to create simpler and clearer conditions of responsibility for the hospitals and the other specialist health services. The enterprises will be given broad powers to arrange organisation and day-to-day management.

With the principles of State ownership control as a basis for the reform proposal, the hospitals will be protected against direct State involvement. On the other hand, the State, through its ownership role, will ensure that the authorisation of the individual enterprise does not come into conflict with fundamental health policy targets.

THE VISIONS
State ownership in itself will not solve the health sector’s more fundamental problems and challenges.

We know that an ageing population will demand more of the health service, that a better informed population has greater expectations to what the health service should provide, and that new methods for diagnosis and treatment are launched in increasing measure.

Active use of genetic engineering methods can both solve and create problems, for example by early diagnosis of ailments for which there are no effective solutions.

Commercial pressure combined with an ever increasing demand for health services from a population that to a greater degree will be more concerned about quality and service, will sharpen the requirements for employees in the health sector. T

he employees, therefore, must secure a competence that enables them to carry out their tasks in a professional and consistent manner.

The Government acknowledges, therefore, that structural reforms must be combined with internal reform. Through change of ownership, therefore, the State will clarify the apportionment of responsibility and tasks between the various levels and links in the management and enterprise chain.

In its ownership and management role, the State will ensure that all levels in the health service, from administration and enterprise to the individual health worker, will have a common understanding of their tasks so that the patients and their families feel that the reform also concerns them.

· Available and efficient health services that satisfy the requirement of the population

The patients are entitled to a health service that takes their problems and needs seriously. It means that patients and their families must be able to expect that their problems are evaluated professionally and competently and to obtain access to necessary hospital services when so required.

The thresholds for access to specialised health services will be comprehensible and practicable. Time must be allocated for clinical examinations, dialogue and communication about which action is best for the patient. In his or her contact with the health service, the patient must be able to expect to be met with discretion, dignity and compassion.

In addition, the patients must also be reasonably sure that the treatment offered gives a health benefit. The health service’s offer must therefore be based on the best knowledge possible.

The enterprises and the individual health worker must work together to establish a culture that continuously questions whether the treatment offered works and how effective it is.

These critical questions and the impact of the treatment offered can only be answered adequately if they are underpinned by methodical competence and applied clinical research at our hospitals.

A general strengthening of the professional basis for quality assurance is a precondition for preventing the use of treatments that have no or only a marginal impact.

Solid professional documentation is perhaps to an even higher degree a necessary condition for phasing out established treatments that have no positive or only a marginal effect. Such critical appraisals are necessary with regard to both the patient and society.

For the patient it is both undignified and stressful to be exposed to demanding and ineffective treatment regimes. For society it is important to obtain the greatest possible effect from the resources used, not least to give room for new and effective treatments that we know will come.

When new methods for preventing, diagnosing and treating (including rehabilitation) ailments are taken into use, this must happen in a controlled manner and in ways that make it possible to learn something about the introduction.

Before such new methods are taken into use on a large scale, there should be available documentation about the positive effects from controlled tests or other reliable documentation. Clinical research and development work must focus on such problems to a greater degree.

The public health enterprises must remain loyal to national priorities. The enterprises’ autonomy should not be used to outbid each other with offers that break with the national priorities.

In addition, the services offered to patients must be consistent with existing national and international documentation.

The public health enterprises, therefore, must be supported by national systems that take care of and combine the professional requirements for documentation and service with the health policy terms for principal priorities.

If national systems for prioritising are to have effect, there must also be systems that take care of the need for a reasonable geographical distribution of qualified staff.

· Quality and conformity

The patients expect to encounter a health service where the quality is high. Quality is a difficult term that deals with everything from service to the result following final reporting or treatment.

Traditionally, health personnel place great emphasis on the clinical quality of the services and are interested in improving this. This is shown by numerous initiatives taken nation-wide.

Quality is created by the individual health worker. The most important quality criterion is that care and medical practice is knowledge-based.

The enterprises are particularly responsible that this happening and that new methods are introduced in a satisfactory manner. The prioritising tasks that will be dealt with at enterprise level must be based on such an approach.

The population must also feel certain that the post-treatment result is of high standard. It must therefore be organised such that practice and results are measured and that information about the result is made available.

This will stimulate a greater interest for professional issues in the health service, and the patients will be able to actively use this in choosing a hospital.

Efficiency is often presented as an obstacle or limitation for professional quality. This is not the case. Quality is about making the correct things right. There are many examples, even in Norway, which show that quality does not necessarily diminish simply because efficiency improves.

· Competence and life-long training

The patients and their families rely on the health personnel. These, therefore, must have knowledge and skills that ensure they are not only professionally updated today, but that they can also change practice and take on new tasks as new knowledge gradually becomes available and the health service’s form and content continually changes. This demands life-long training and development. Such training is also an investment in quality.

Training and development plans will therefore be important for the enterprises, both with regard to recruiting and the working environment, but also as a competitive advantage.

Nevertheless it is even more important that the population can always rely on meeting a modern and updated health service. The enterprises will also have a special responsibility for making the best use of competence across levels and units in the health service.

Through its role as owner, the State must ensure that these bold objectives can be realised through establishing national schemes that offer qualified post-experience courses.

· Management, organisation and cooperation

The proposed organisation of the hospitals as enterprises sets major requirements for managerial responsibility at all levels.

Hence a stronger focus on managerial competence both in the primary and professional level. To create and maintain efficient organisations with high quality, the enterprises’ management must rely on traditional financial control and management.

This needs competence, tools and continuous management data, but also acceptance in the rest of the organisation that such a primary management is important to achieve results. The professional environments, therefore, must contribute by taking joint responsibility and through joint leadership.

However, in order to motivate the professional environments to take on joint leadership, it is an important prerequisite that the top management show understanding and respect for the diverse and complex professional premises on which the hospitals’ activities are based.

Based on cooperation with the professional environments, the senior manager must also be responsible for the enterprise being knowledge-based, on which basis new methods in the health service can be introduced, how the quality is, how one continually assures that the personnel are professionally updated, etc.

It must be recognised that quality is created, not decided. In their reporting, the enterprises must account for such aspects in the same way as operational and financial reports.

The work in the enterprises must be organised so that the patients’ problems are solved quickly and efficiently. This presupposes a capacity to cooperate, a willingness to accept change and effective teamwork.


. From administration to management
We don’t have to go many decades back to find a Norwegian hospital management that was primarily characterised by administration.

Clear evidence of this previous administrative culture is still found today. However, during the past ten years there has been a substantial development in the direction of greater interest for active management and organisational development in the hospitals.

Several initiatives have contributed to this, instigated by the individual hospital, the county municipalities as owners, and the State through various pilot projects. More recently, it is worth mentioning the nation-wide cooperation in Forum for Organisational Development.

Compared with the almost continuous scientific and technological revolution that happens in medicine as a profession, it must be stated that investment and development in management and organisation has been moderate. A

lmost the same conclusion can be drawn if we use the development in a globalised economy and modern information technology as reference. An increasingly informed and demanding patient with clear expectations about more individual and customised treatment and following up is also part of the overall picture of change.

Such accelerating processes of change in medicine, medical technology, finance, IT and patient behaviour create considerable managerial and organisational challenges in the health service. The challenge is to develop management skills and organisational forms that can match this dynamic in and around the medical profession.

Why are the hospitals so difficult to manage?
The symptoms that hospitals are difficult to manage are many: regular and considerable deficits, conflicts between occupational groups, regular changes in senior management, either because the managers have “had enough” or they are asked to leave. Nor does the rate of turnover of senior managers make it any easier to recruit new leaders.

Many potentially well-qualified managers with solid experience from other large private and public sector companies decline to take on the primary responsibility of managing hospitals. This description of reality prompts critical reflection. There are no easy solutions. Perhaps we must therefore search for possible explanations of what makes the management of hospitals so difficult.

If we look for the answer inside the hospital organisation, it is the tension between the professional medical staff and the senior management that makes leadership particularly difficult.

This tension is primarily an expression of the fact that the hospital management has a legitimacy and authority problem in relation to the medical staff, and that the medical staff refuse to accept joint responsibility for the whole.

Thus, compared with most other enterprises the hospital management’s authority appears to be more critically challenged by the staff. In a nutshell, management is often regarded as an adversary. This is reinforced by a culture characterised by a lack of common language, references, perceptions of reality and objectives.

The management problem in hospitals is further amplified by the increasing specialisation and fragmentation on the medical side. As such, the various professional environments also lack mutual frames of reference or criteria in order to balance and articulate their interests and preferences.

Consequently, the professional environments lack both a culture and tools to deal with the many zero-sum situations that will always characterise resource management in hospitals. This situation invites opportunistic alliances and ad hoc solutions that tend to under mine rather than underpin the top management.

However, some of the leadership’s authority problems must be attributed to the hospitals’ external anchoring, stipulated in detail in the framework conditions to which the hospitals are subordinated. Organised as a part of the administration, the hospitals have often lacked the necessary freedom of action to find more flexibly adjustments to more turbulent surroundings.

Indeed, in a hospital sector under social control this scope for manoeuvre will never be the same as in a private enterprise. Nevertheless, there are features of the administration’s culture, procedures and rules that contribute to making the task and responsibility of management more difficult.

Administrative organisations are not primarily designed to solve operational and managerial tasks. With reference to these internal and external restrictions, it is not immediately clear that the conditions for practising effective leadership exist in today’s hospitals.

. Enterprise organisation as a responsibility and leadership reform

With ownership and enterprise organisation as tools, the State will define the responsibility for the hospital sector. By separating the hospitals from the administration and making them into independent enterprises, the hospital managers are in a better position to practice leadership and take responsibility.

It is a question of precisely defining and objectifying the responsibility and linking authority and freedom of action to the responsibility. This can thus be regarded as much as a responsibility and leadership reform as an ownership reform.

As one of modern society’s most complex and technology intensive knowledge enterprises, the hospitals differ fundamentally from the administration. The hospitals today appear as perhaps our most typical supplier of knowledge-based services.

As a result of increasingly turbulent and demanding circumstances - in relation to the knowledge and technological front as well as the demand front - it is increasingly important to have a hospital management that is able to manoeuvre. This management must have an ability to quickly intercept signals from the surroundings and implement the necessary adjustments.

As hi-tech enterprises, the hospitals’ capital outlays are increasing. Through the enterprise organisation, these capital expenditures are brought into the accounts.

This enables a more efficient capital management where requirements are set for making the best use of the capital to increase the social benefit of the investments. Simultaneously, this means that the capital must be written off to ensure the future capital renewal required for the hospitals to keep up with medical developments. Such write-off arrangements will also enforce a more effective balance between use of capital and human resources.

Some of the same arguments can be used in relation to the human knowledge assets. As knowledge enterprises, the hospitals will be totally dependent on being competitive in relation to the highly qualified workforce.

Even though this sets limits for the mutual competition between the hospitals, the hospitals’ workforce in several fields will be more exposed to competition in relation to other sectors.

Thus, the enterprise organisation provides greater room for managerial manoeuvring than that which is normal in the administration. To fully exploit this room managers require a broad understanding of what is involved in running modern knowledge enterprises.

Managerial challenges

In the final report from Forum for Organisational Development in Hospitals, some of the most central elements of management are summarised as follows:

· Takes full and total responsibility for the results and the quality the unit creates, and for the work being undertaken within the framework set by the authorities and owner (operational responsibility)

· Continually evaluates the need for, initiates and implements necessary change processes (the strategic responsibility)

· Take overall personal responsibility for all personnel and occupational groups within the organisation

· Take responsibility for ensuring that the working environment and organisational culture match the tasks to be solved

· Show ability and willingness to exercise management through formal authority, formal and informal decisions and use of delegation.

The report emphasises the need for clarifying the framework conditions around management in hospitals on various levels. This applies not least in relation to the owner, where the enterprise reform is expected to strongly contribute to such a clarification.

But it is equally important to define and give concrete content to the responsibility that will be exercised by managers at various levels in the hospital.

The importance of developing good role models for managers is strongly emphasised. Otherwise, one of the main points in the report is that the focus on leadership quality in hospitals must be sharpened, and that the aim of all management involves providing the best possible services for the patients.

Consequently, the managers in hospitals have a special responsibility for ensuring that the objectives in the report “Pasienten først” [The Patient First] are realised.

We described earlier two situations that contribute to making management in hospitals difficult: vague and unpredictable framework conditions on the one side, and the tensions between top management and the medical staff on the other.

While it is presupposed that the framework conditions are more transparent as a result of the enterprise reform, the tension between hospital management and staff is so endemic in the hospitals’ tradition, division of work and professional system that the reform as such will not solve it.

Specifically, the relations between hospital management and staff must be dealt with through strategic culture- and communication-building in the hospitals. But such internal bridge-building also requires support and legitimisation from society, both in the form of a requirement for and organisation of improved interaction.

The challenge lies in creating more overlapping zones for development of common experience and reality understanding. The hospital management must get closer to the staff in order to better understand their problems and day-to-day activities.

The individual professional environments and staff representatives must develop a greater understanding for the overall organisation to which they belong and the frameworks that are set for the hospitals’ operation.

Such zones for culture-building across established groups and levels must be created through the forming of teams and management groups at various levels. To achieve this the professional and instrumental leadership must be supplemented with communicative leadership with a requirement for rationalising and bridge-building skills.

Communicative and bridge-building leadership means that a manager takes on two responsibility roles: management responsibility for the unit he is in charge of, and joint management responsibility for the overall organisation to which the unit belongs.

Joint management responsibility is about contributing to making the interfaces to adjacent systems - sideways, upwards and downwards - as seamless as possible. Most importantly, these systems must be seamless to the patients, but it usually also helps the patients if the hospital staffs take joint responsibility across boundaries.

Establishment of a national development programme for hospital management
The considerable management challenges in the hospital sector must be met with schemes on a broad front, first and foremost under the control of the regional public health enterprises and the individual hospitals.

However, by virtue of its national role as owner, there is one area where the State will have special responsibility. This is the establishment of a national institution for the development of top management and departmental managers in the hospitals.

Such a scheme can be thought established as a virtually organised cooperation between existing institutions with relevant competence, but the programme will nevertheless be given a clear identity with a defined professional content and own portal. The Ministry’s ambition is to create a management development programme at a high level, partly based on similar units abroad.

When the Ministry elects to develop a special management development programme for the health enterprises, it is in recognition that management in addition to being something general also involves managing activities with a sector-specific and concrete content.

This reasoning about management is assumed to have a general validity, but particularly applies to complex and competence-heavy organisations such as the hospitals.

The sector-specific situation in the hospitals include both organisational culture and values, and the more professional and technical elements associated with the hospitals such as service, organisation and production systems.

A general knowledge about the hospitals’ contents, with emphasis on understanding and respect for professionalism, knowledge of prioritising and quality criteria, and an ability to undertake result evaluations and dealing with deviations, is important for hospital managers.

In addition, it is essential that this management development is anchored in the care values on which a patient-oriented health service should be based.

The proposal for establishing a special management development programme for the hospitals highlights the Ministry’s ambition to set high requirements for top management in our hospitals.

This programme will be developed as an organised arena where top managers and other health service managers in front line positions are given a common and collective frame of reference and a more common knowledge base.

This is partly about developing and refining relevant strategic and operative skills, but also about paving the way for a value-anchored culture-building. The ideal is to create a set up where sector know-how, culture and high general education blend together.

Through the programme for management development, the managers are given the qualifications to practice communicative leadership and develop an understanding for requirements to the manager’s role in the hospitals as modern knowledge enterprises.

Apart from top managers, the target group for the programme will primarily be the level that reports to the top leaders, either in higher staff positions or in the technical line below (departmental heads).

In light of the tensions between hospital management and professional staff, it is crucial for the school’s success that both these groups are abundantly represented. By making this programme into an arena where various professional identities and experiences are brought together, the stage is set for the cultural bridge-building out of which the communicative leadership stems.

Moreover, it is important that the management development programme also contributes to strengthening and exposing the undergrowth of future management material.

In general, it will contribute to supporting career development in the hospitals and thereby make it more attractive to take on management challenges in the sector.

In this way, the programme will both contribute to strengthening the quantitative and qualitative basis for future recruitment and development of hospital managers in Norway.