Is there any accounting for care?
A version of this article was first published: (publication unknown) - June 1992
One key issue that faces those working in the area of health care is that of how to respond to the fact that the available resources are always being outstripped by demands arising from needs that ought to be met. Current economic orthodoxy maintains that the best way to allocate these relatively scarce resources is by way of the market mechanism. The beauty of the mechanism lies in the fact that it is thought to effect an efficient distribution of goods and services according to the preferences of each party to the transactions. That is, those who most want a particular item will be prepared to allocate the greatest amount in exchange for its provision.
The level of want or demand is the basis on which a price is set. There can be little doubt that even this simplistic account hints at the elegance of the market system. To some eyes the market has a pleasing aesthetic dimension. However, to others it seems that the exchange of goods and services in order to satisfy preferences does, in some fundamental sense, miss the important point that people have needs in additional to wants. And it is the satisfaction of needs that seems to be the primary aim of those who engage in the provision of health care to the community.
It is important to understand that I am not an economist and that my picture of the market mechanism is but a crude caricature of the fundamentals. However, I have thought to chance my arm in this way because it seems to me that the economic model has had profound effects in its application both here and overseas. For example, in Britain the creation of hospital trusts and self-governing hospitals, budget holding doctors and a host of other reforms designed to foster the creation of an internal market for health, have all had a radical effect on the way in which the National Health System is evolving.
However, the real change that is being effected by such initiatives does not so much lie in the outward form of the system as in the values that are being introduced. Whilst it is always somewhat reckless to generalise, I want to suggest that there has been a move away from a total reliance on traditional values to do with caring towards those to do with the effective conduct of an enterprise. Such a change reflects a conviction amongst some planners and administrators that hospitals and the like are essentially akin to any other enterprise.
Before proceeding, it may be as well to make the point that this orientation doesn't lead to any fixed conclusions as to the kind of management paradigm that will be dominant in any one organisation. This flows from the fact that management theory is an evolving science and that many different forms of practice may apply.
For example, there is considerable divergence concerning the types of structure that might be put in place in any organisation. One can choose amongst alternatives including, on the one hand, a strict hierarchy such as may have been typified in the days of hospitals ruled by matrons with iron fists in the occasional velvet glove. On the other hand, one might be attracted by the prospect of a flatter, more democratic style of operation. Both styles of management can be found at work in both the public and private sectors. If there is divergence in the styles of management, then that which unites each approach is a concern to adopt the most appropriate (and that normally means most efficient) techniques.
It is at this point that some of the profound ethical problems start to emerge. By way of illustration, it is interesting to note that the way in which we use language can be a guide to our underlying values. With this in mind, it is a matter for some concern that so many people use the term Human Resources to refer to human beings. Whilst many of those who feel comfortable with such a term would vehemently deny that they see others as means, rather than as ends, we must ask what it means for our society to develop terminology which places human beings on the same rank as other commodities to be ordered up and deployed. As will be seen from the unfolding argument of this paper, the idea of human beings as commodities to be factored into business equations is singularly inappropriate when applied in the area of health care.
Now all of this may seem to be a little disconnected. So far, there has been a discussion of markets, management styles and terminology. What is it that links these seemingly disparate factors? The answer to this question is that each of these elements is the expression of an over-reliance on technique as a response to the problems faced by individuals and society.
I want to suggest that, as things stand, the dominant approach to problem solving is that which sees worthwhile solutions as inevitably involving technological innovation, or the development of new techniques of analysis and control. Coupled with invention and the deployment of increasingly powerful tools, this basic paradigm has grown in influence, with much of its prestige stemming from the fact that it is associated with the scientific method which, for the most part, delivers outstanding results.
However, such progress in knowledge may have been at the expense of understanding. The field of medicine provides a convenient and informative case for reflection. There can be little doubt that specialisation in research and practice has added immeasurably to our understanding of the function of the human body and its susceptibility to disease. Likewise this same degree of specialisation continues to enable the development of new treatments for previously fatal or incurable conditions. However, in recent years there has been an increase in understanding of the fact that a phenomenal understanding of the physiology of the human body is not equivalent to an understanding of that which makes for healthy persons. To achieve that second aim is to recognise that there is more than one dimension to the human condition.
A recognition of this insight can be linked back to a discussion of business ethics and their application in the arena of health care. This paper began with an account of some of the most basic principles of economics. The importance of this now turns out to be that the status of economics is such that we run the risk of allowing it to dominate our conception of human being. We are not just one dimensional creatures, but have many aspects of our existence that need to be taken into account when trying to understand our human condition. The attractiveness of the view of 'economic man' may lie at the heart of conceptions that give rise to terminology such as that associated with ‘human resources’. The challenge then is to expand our vocabulary.
None of this is meant to suggest that economists or scientists or technologists are to be held responsible for the way in which the terms of debate are established. One needs to realise that many economists are fully aware of the limitations of their science. For them the problem is that other people read so much into their qualified analysis. Nor do I mean to suggest that economists and others cannot make substantial contributions to our understanding of what we must do to guarantee our material wellbeing. I repeat that the seat of the problem lies in a way of thinking that depends for its practical application on the deployment of technique. This narrow perspective has been around since at least the time of Aristotle. It has an influence on the way we think in general and thus is not confined in its effects to the practice of any particular discipline.
However, what is the import of all of this for health care professionals confronted by changing notions of accountability? At one time it might have been said that the needs of the patient were of paramount importance when defining any course of action. Some suggest that current practice is moving in a direction in which other concerns take pride of place in the counsels of the wise.
These other considerations include matters such as: whether or not the proposed course of action represents value for money, whether or not the technical skills of highly trained professional staff are best employed in the task of giving succour to those in distress, whether or not certain illnesses and infirmities might be ranked as being of greater or lesser significance, whether or not life should be preserved by the application of costly procedures, drugs and so on when the resources might go to others who have a more 'pressing' need. In all of this there is a drive to find ways in which to quantify intangibles such as relative wellbeing, time spent in conversation, peace of mind, absence of pain and so on. This is why I have asked the question: "Is there any accounting for care?".
At an intuitive level, it would be comforting (and comfortable) to be able to say that individual needs are, have been and should be the sole determinant of how one allocates resources. However, to subscribe to such a point of view would be to take comfort from what is probably a mythical yearning rather than a memory of any real moment from history. For, to be honest, there has always been a limit to the resources which the community has had available for purposes such as education, welfare and health care. Whilst different parties have contended that the overall size of the cake should be enlarged by measures such as increased taxation, most of the debate has concentrated on how to cut the cake and allocate the variously sized pieces.
And it is at this point that it becomes possible to see that the application of some of the elements of economics and management, as discussed above, is in fact necessary if we are to find the best way to maximise the good that can be done with the available resources. This is to recognise that there may be at least two ethical requirements linked to the role of accounting in the provision of health care. It is suggested that the first of these requirements is that an account must be tendered as to how it is that we spend the community's resources. Would anyone really want to suggest that such an account should not be given? The second requirement may be that we gather any information that is likely to assist in the task of ensuring the effective provision of health care. Would anyone wish to argue that the information forming the basis of such an account would be of no use at all? I hope not.
The point is that it is not the question of information or accounting that is of such significance. Rather, we need to be concerned about the reasons given for collecting and disseminating the information in the first place. If the only reason offered goes along the lines "that's the way it works in business", then there are justifiable grounds for complaint. However, if the reasons include a commitment to use the information as a way of better achieving the primary goal of the organisation, then there can be little reason for concern about the ends to which the accounting exercise is being directed. And this, of course, is the crux of the matter. Just what exactly are the ends of the organisation as perceived by the various parties involved?
Administrators may be driven by the need to ensure financial performance; doctors, nurses and other health care professionals may be driven by allegiance to professional ethics and standards; patients are driven by their need for health care and so on. In each case the difference in focus may give rise to a different perception about the role of the market and the application of accounting principles. There are of course other needs and drives at work and it is important to understand that they will not all be mutually exclusive. Indeed, the ideal is to have each need oriented in support of the others so that the whole drive of the organisation is directed towards securing one overarching end. At this level there can be but only one end for those who would provide health care. And that is to preserve and enhance the quality of life of all those who come into contact with the institution. It should be noted that this formulation includes a concern for the wellbeing of medical staff and administrators as well as that of patients.
Seen in this light, accounting for care can be part of a creative diagnostic approach in which the information is gathered and shared so that the primary goal can better be achieved. To see the accounting function in this guise is to go beyond the narrow confines of financial accounting. Whilst this will be an important element in the effective (as perhaps opposed to efficient) utilisation of resources, it will not exhaust the scope of any diagnostic accounting exercise. Other types of account will concentrate on issues to do with safety, the comfort of patients, the quality of communication within the organisation and so on.
An important corollary of this approach is the need for there to be a recognition of the fact that each person involved in the arena of health care also has an important role to play in the accounting process. This involvement will need to go beyond that associated with the function of collecting data. If accounting is to be part of an organisation's diagnostic process, then so it is that each member of the team will need to understand the purpose of the exercise - both as it affects the 'big picture' and as it affects local circumstances. In turn this suggests that each person will need to be involved in aspects of planning and that there will be a broad engagement in discussions about the goals of the institution and its parts.
To see the accounting function in this light is to go beyond the crude mechanistic models associated with outdated manufacturing methods. The provision of health care is nothing like manufacturing, in which resources are gathered together in order to produce a new product. In manufacturing the finished product is an artefact created by the ingenuity of man. There is a real role for technique in the task of taking raw materials and converting them into a new form and function. On the other hand, health is the natural and perfect state of the living organism. As such, disease is a departure from this norm and our interventions are designed either to prevent this departure or to effect a cure. In this respect there is no commodity to be brought in to existence as a novel expression of our ingenuity. And hence, it is a mistake to use manufacturing as a simile for health care (unless of course it is for rhetorical reasons).
So, the picture that begins to emerge is one in which certain notions drawn from the world of business need to be re-conceptualised in order to make sense within the environment associated with the provision of health care. But what of the overall framework of the market? Is there something to be learned from its structures and imperatives? As a first point, it is significant to learn that the experiment in Britain has done nothing to diminish the amount of resources being made available to the health system. Indeed, despite appearances to the contrary, there has been a fairly steady increase in the government's financial commitment in real terms. At the same time, it is fair to say that the jury is still out on the question of whether or not new accounting measures have achieved the desired results. It is my own relatively uninformed opinion that a strictly instrumental view of the accounting process is still dominating the thinking of proponents and opponents alike.
If this is the practice, what are we to make of the theory that the market is the best mechanism available for deploying limited resources? In other words, if we are going to have rationing, what is the best way to go about it? In trying to anticipate a brief answer to this massive question I would make the following observations. Firstly, it would seem to be generally accepted that membership of the community entitles one to exercise a right to basic health care. In a country like Australia we have the means to ensure this right is both recognised and acted upon. If we were to leave the matter there it would come down to an ideological debate about the best method of guaranteeing the exercise of that right. Some would argue for public provision of health care, others for private provision and most for a mix.
However, a recent article published in the Journal of Applied Philosophy suggests that the discussion of rights is incomplete without reference to corresponding duties1. In that article, Emson stresses the importance of balancing rights with duties and responsibilities as a way of ensuring that the 'commons' available for health care are distributed in a way that is fair and just. Emson's suggestion is that a recognition of a duty 'to the commons' might lead people to understand that they do not have an unlimited right to health care. But rather than relying on government or some other type of bureaucracy to decide the issue, people would be encouraged to voluntarily subscribe to a self-denying ordinance. Emson cites food rationing during the Second World War as an example of "voluntary renunciation of benefits on a large scale, for limited periods of time, in pursuit of what was perceived as a greater good".
This idea of balancing duties and responsibilities is interesting in itself. However, I mention it in the context of this paper because Emson's reasons for stressing the point are of particular significance. Rather than make his proposal on the ground that it is an efficient way to ration health care, he does so because of his commitment to the notion of patient autonomy. In other words, he thinks that it is only possible fully to recognise patient autonomy (which gives rise to a right to information as a basis for informed consent to procedures etc.), if that autonomy is fully articulated in terms of rights and duties. This is to return to the point that the exercise of a duty to the commons, by the autonomous individual, is to be preferred to a situation in which this responsibility is resigned, with the decision, into the hands of another.
Yet to talk of the autonomous individual exercising responsibility towards the community seems somewhat strange to ears tuned to discussions of autonomy that stress individual rights, and nothing else! This discussion began with comments about the role of the market. Emson's work helps us to see that markets need not be the locus of activity for selfish egoists who have no concern for the welfare of others. Emson's work helps us to see another, and more complete, side of the coin. Adam Smith's notion of the 'invisible hand' is usually quoted with varying degrees of approval. The next step taken by most commentators is to assume that Smith was advocating a life motivated by greed alone. What people tend to forget is that Smith was a moral philosopher and that Book Four of The Wealth of Nations includes a statement along lines that the operation of the market should be subject to the laws of justice. The way to square the circle in all of this is to realise that it can be in one's self interest to do that which is just.
With this in mind, it should be possible to see that there is nothing inherently wrong with the market. Providing that autonomous individuals bring to bear the proper motivations then the market can be a just and benign institution. And I suppose that this leads to the chief point that I hoped to see emerge from this paper. The point is that any system of management or accounting or markets is going to carry the countenance of the personality of those people who make up the institution or who operate the system. The most disturbing legacy for a culture wedded to technique is that there may develop a tendency to blame the system and, in doing so, to lose sight of the human dimension of our existence.
As an aside, it should be noted that this reliance on technique can even be seen to have an influence in the realm of ethics. For many people, ethics is about discovering a set of rules that tell you what you should do in a certain situation. For example, this tendency in thought has even led some professions to codify their ethics in a handbook of rules. We see this approach at work in an increasing reliance on legislation as defining the bounds of right and wrong behaviour. In either case the emphasis is on the system. However, there is another tradition that seeks to discuss questions in ethics according to an understanding of the place of virtues in personal development. Under such an approach, the focus of contemplation changes from answering the question, "what are the rules for this situation?' to, "what sort of person do I want to be; what sort of life is the ‘good life’?.
Thus when it comes to answering the question at the heart of this paper, then the answer must surely be that there is some accounting for care. However, the reckoning must be made by each person who shares in the responsibility for the way in which the care is provided. In effect this means that each of us is accountable, although the burden of responsibility will be more immediate for some. New management imperatives are only to be feared and rejected in their crude and limited instrumental form. When applied with intelligence and compassion, such approaches can transcend technique and form a new and exciting basis for expressing an authentic commitment to the task of preserving and enhancing the quality of life of all those who deserve our care. A moment's reflection will bring us to see that it is not possible to circumscribe the list of the deserving. Truly each of us is an end, as each is our neighbour.
- Emson, H. E. (1992), "Rights, Duties and Responsibilities in Health Care' in The Journal of Applied Philosophy, Vol. 9, No. 1, pp. 9-10.