The role of the hospital in a changing environment

Hospitals pose many challenges to those undertaking reform of health care systems. This paper examines the evolving
role of the hospital within the health care system in industrialized countries and explores the evidence on which policymakers might base their decisions. It begins by tracing the evolving concept of the hospital, concluding that hospitals
must continue to evolve in response to factors such as changing health care needs and emerging technologies. The size
and distribution of hospitals are matters for ongoing debate. This paper concludes that evidence in favour of
concentrating hospital facilities, whether as a means of enhancing effectiveness or efficiency, is less robust than is
often assumed. Noting that care provided in hospitals is often less than satisfactory, this paper summarizes the
evidence underlying three reform strategies: (i) behavioural interventions such as quality assurance programmes; (ii)
changing organizational culture; and (iii) the use of financial incentives. Isolated behavioural interventions have a
limited impact, but are more effective when combined. Financial incentives are blunt instruments that must be
monitored. Organizational culture, which has previously received relatively little attention, appears to be an important
determinant of quality of care and is threatened by ill-considered policies intended to ‘re-engineer’ hospital services.
Overall, evidence on the effectiveness of policies relating to hospitals is limited and this paper indicates where such
evidence can be found.