Crossing the ‘moving frontier’ between nonprofit and public service provision: the case of post-1948 hospital services in the UK

• In Event: Organizational change

Abstract

The UK’s National Health Service (NHS) is seen as epitomising a centralised, state-funded system of health care in which services were delivered almost exclusively by public organisations, and in which the country turned its back decisively on nonprofit provision. This suggests a clear break kn the organisation of services, but in practice historical accounts now emphasise the ‘moving frontier’ between statutory and voluntary control. Despite the apparent homogeneity of the post-1948 arrangements, there remained pathways through which a small number of nonprofit institutions continued in existence after the NHS was formed in 1948. The paper explores these unusual cases, and considers the ways in which they acquired resources and developed relationships with stakeholders.
There were several routes through which nonprofits persisted. A small number of hospitals were not taken into the state system (being ‘disclaimed’ in administrative terminology) upon its formation – most often Catholic institutions, determined to resist secular control. Some new nonprofits came into being – either through local campaigning, or through strategic efforts by providers of private health insurance to guarantee a network of hospitals which would maintain class privileges by offering local access to good-quality care. This is what became the substantial nonprofit ‘chain’ – Nuffield Hospitals. In recent decades numerous entities have left NHS control either, again, through local initiative or through central government action to promote plurality of provision.
What can we learn from these efforts? In relation to theoretical arguments about the virtues and limitations of nonprofit provision we discover elements of resource dependency (Doyle et al., 2016) – not least through dependence on state contracts. The majority of disclaimed institutions actually had significant public funding within a few years of the NHS being established. We also find hybrid entities (Billis, 2010) – this is particularly so in the case of Nuffield, which has diversified its income in response to financial pressures by taking on NHS contracts and moving into provision of a wider range of leisure services. Institutions also found themselves positioned between state and market, with some organisational narratives pointing to the combined pressures of regulation from the state and competition from commercial providers as being responsible for squeezing out nonprofits. There have been questions about the charitable status and identity of institutions – in Nuffield’s case, while health care provision is charitable, much of its revenues now originate from individuals paying high fees for gym subscriptions. (Morris, 2007). There are also issues of resource insufficiency which are particularly pertinent in the present context: to what extent can public services such as the NHS really be bailed out by local fundraising? Examples of institutions transferred back to charitable status show the extent to which local prosperity influences their ability to garner philanthropic resources.
The diversity of cases examined illustrate both the strengths, and weaknesses, of reliance on voluntary effort in a state-funded health care system, and provide salutary evidence that despite the optimism of the supporters and stakeholders of these institutions, achieving their visions of voluntarism was never straightforward.

References

D. Billis. (2010) Hybrid organisations and the third sector, Basingstoke: Palgrave Macmillan.

Doyle, G et al (2016) Resource dependence as a mechanism for survival: the case of Mater Misericordiae Hospital. Voluntas, 27, 1871-93.

Morris, D (2007) Fee-paying hospitals and charitable status. King’s Law Journal, 18, 455 – 79.

Authors

• John Mohan, University of Birmingham

• Steph Haydon, Centre for Philanthropy, University of Kent

• Puren Aktas, University of Birmingham