1921, and on March 9 an interim report was published which con- tains the following important announcement :
" The evidence already received has convinced us that it is desir- able in the public interest to maintain the voluntary system of hospital management."
Such an important pronouncement by a body of independent investigators could hardly fail to exercise considerable influence in stabilizing public opinion and to encourage that large body who by their voluntary contributions have hitherto been the mainstay of a hospital system which is regarded as unique in the history of charitable institutions. The Cave Committee recommended that a State grant of 1,000,000 should be made in relief of hospital finance, but in June 1921 the Government decided to make this only 500,000, the condition being that further voluntary effort should be made in order to keep the hospitals on an independent basis.
Hospital Finance. Whoever seeks to investigate this aspect of the British hospital problem as a whole quickly encounters diffi- culties which may well appear almost insuperable. King Edward's Hospital Fund for London makes it conditional for any hospital applying for a grant that the uniform system of accounts be used, with the result that it is a comparatively simple problem to obtain a clear statement of the finances of any individual hospital, or of the group as a whole, in the London area which comes under the super- vision of the King's Fund. But there is no supervising authority for the hospitals outside London, with the result that in the prov- inces, in Scotland and in Ireland the voluntary hospitals adopt a bewildering variety of forms for presentation of their financial accounts. This lack of uniformity makes it exceedingly difficult to ascertain the real financial position of many individual hospitals, and almost impossible to institute a reliable basis of comparison for the hospitals in the aggregate. Owing to the absence of a uniform system of hospital accounting, the annual hospital report is of little value for comparative purposes. The annual report as at present constituted is a production for " home consumption," that is, for the individual hospital committee, and is useful in comparing the costs of one year with another, but is of comparatively little value for the purposes of an inter-hospital comparison, and unless hospitals are in a position to compare themselves with similar institutions, they are apt to remain isolated units without the privilege of learn- ing from the good points of their neighbours.
A reform urgently needed, not only for the provincial hospitals but also for those under the supervision of the King's Fund, is some simplified system for showing a hospital's financial situation, so that the subscribing public might readily understand the position of the institution they are asked to support. It is no longer enough for a hospital secretary to publish the bald statement on the front page of the annual report that such and such a sum of money is urgently needed to keep the hospital going. A hospital financial statement should set forth the total amount of money received during the year from all sources, from individual sources, and details of what has been done with the money received.
Prior to and during the World War the voluntary hospitals as a general rule experienced no great difficulty in obtaining financial support sufficient to meet their expenditure. Voluntary subscrip- tions and donations constituted the major portion of the receipts. Certainly during the years 1915-8 inclusive, when so many hospital beds were occupied by patients paid for on a capitation basis by the State, the majority of hospitals were able to show an ever-expanding income. But when this financial prop was removed during 1919 hospitals were caught unprepared.
When the military patients disappeared their places were speedily taken by non-paying patients. Hospitals had recourse to their old pre-war method of raising money, namely the spasmodic public appeal, only to find that such methods no longer possessed the necessary power of earlier days. The result was that hospital secretaries appealed through the public press for the support neces- sary to stave off the threatening financial disaster. But during this Ceriod, while so many were declaring their helplessness, several ospital secretaries took stock of the new conditions, realizing, amongst other facts, that the possession of money, as a result of the war, was more widespread amongst the community. They appre- ciated the fact that their hospital patients were drawn from a class of the community who were now, and had been during the war, in receipt of much higher wages than formerly, and to these employees in factories and workshops the hospital secretaries appealed for weekly contributions and organized the necessary machinery for collection. This source of revenue has proved most profitable to many hospitals, but unfortunately there are some hospital secre- taries who appear reluctant to explore this source of wealth that is so ready to their hand.
In 1919, a period before workmen's contributions had been generally adopted by the hospitals, it was found that, out of 600 hospitals (in the provinces) investigated, 374 showed contributions from employees amounting in the aggregate to 518,043, or approxi- mately 20% of their ordinary income.
Again, many hospitals realized that there were those amongst their in-patients who were no longer content to place a small coin in the hospital poor-box in gratitude for the services received, but who now desired to pay a more substantial contribution towards their expenses, so that in 1921 the majority of the hospitals had in opera- tion one of three possible methods by which patients' payments are made: (a) Many hospitals had adopted the almoner system, that is, specially appointed hospital employees who approach the individ- ual patient who comes to hospital, explain the needs of the hospital, and invite the patient to contribute according to his ability, (b) A few hospitals had adopted the less popular plan of instituting a fixed daily or weekly levy from their patients on account of maintenance. (c) Comparatively few hospitals in 1921 were without the reserve of a small number of beds for patients who desired to pay the cost of their maintenance. Many of the small or cottage hospitals in the provinces had instituted the system of paying-patients some years before, but there were still some of the larger type of hospitals that had made no such arrangements. The London hospitals were quickly adopting some system of patients' payments, as shown by the following figures. In 1913 the amount obtained from payments made by or for patients was 78,000. In 1919 it was 124,000 an increase in the six years of 46,000 whereas in 1920 the total from this one source reached 230,000; and if patients' donations are included the total reached was 260,000 an increase of 182,000 in the seven-year period. In the provinces in 1919, 600 hospitals with 33,514 available beds showed a total ordinary income, including un-earmarked legacies, of 3,486,098. Payments made by or on behalf of patients amounted to 803,741, or 23% of the total ordi- nary income. It has to be pointed out that these figures being for 1919 include some figures that may be regarded as non-recurrent namely, capitation payments for the military patients who were then remaining in hospital. The question of " paying-patients " in voluntary hospitals was repeatedly urged by that great hospital authority the late Sir Henry Burdett, who pleaded with the hos-
Eitals to adopt the principle not only as a relief to hospital finance ut as broadening the basis of usefulness to the community. The following figures, supplied by the Cleveland Hospitals Survey are from three large American general hospitals and show the ratio of paying to non-paying patients:
Percentage of Total Admissions.
Hospital I.
Hospital 1 1.
Hospital III.
Patients paying full cost of maintenance Patients paying part cost of maintenance Patients paying nothing to- wards maintenance Patients unclassified
41-9
20-8
30-1
7'2
27-9 40-9
15-5 '5-7
30-5 49-3
2O-2
0-0
IOO
IOO
IOO
Of the various other possible sources of hospital income in England there is one that calls for special comment namely, payment on behalf of National Insurance patients. The section of the National Insurance Act dealing with medical benefit does not make provision for the payment of hospital treatment. The operation of the Ac< has thrown an unexpected volume of work upon the voluntary hos- pitals, both in the in-patient and out-patient departments. This fact, with all the expense involved to the hospitals, was rather obscured during the six years of the war period because of the neces- sary pressure in making provision for the treatment of military patients and also because hospitals were in receipt of enhanced incomes from the War Office; but after these conditions had dis- appeared the hospitals realized the great pressure that the operation of this Act placed on their finances. Medical men who act as panel practitioners continued to recommend their panel patients to the hospitals in increasing numbers and for these the hospitals received no direct payment. Hospitals had some claim for financial con- sideration for the treatment of patients under the National Insurance Act. Such payment should not take the form of a capitation rate, as such rates would inevitably tend to rise and have the effect of drying up income from voluntary sources and also probably in time neces- sitate some degree of State control over the hospitals on behalf of the approved societies. Any payment for insured patients might rather take the form of block grants to hospitals, administered through a central hospitals board, after careful assessment of the general work of the hospitals, especially in regard to the standard of service and also of the efficiency of administrat'ion.
In discussing the disposal of the accumulated surplus, estimated at approximately 7,000,000, Lord Cave's Committee in their interim report made the following statement:
" We are strongly of opinion that, in the interests both of the hospitals and of the societies, the schemes to be approved should provide for the application of a substantial part of the disposable surplus in providing a contribution towards the cost of the main- tenance of members in hospitals."
Hospital Expenditure. Too often the superficial view is taken that what is known as " the hospital problem " is merely a con- sideration of finding the additional income that is required. On the
