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Brief analytical summaries or syntheses #33

Governing public hospitals.
Reform strategies and the movement towards institutional autonomy


This study by researchers at the World Health Organization (WHO) explores major developments in the governance of public hospitals in Europe and looks at their implications for national and European health policy. Individual hospitals have been given varying degrees of semi-autonomy within the public sector and have been empowered to make key strategic, financial and clinical decisions themselves. The study includes an in-depth assessment of eight different country models of semi-autonomy.


For hospital governance to be effective, it must incorporate two powerful and well-developed lines of health sector logic: on the one hand, national health policy and objectives; on the other, operational hospital management. One sphere is political, the other technical. One is subjective and value-based, the other is objective, with performance that can be measured both clinically and financially. The challenge for hospital-level governance is to integrate these two disparate logics into a coherent and effective institutional-level strategy.

This book explores innovative strategies in how acute-care public hospitals are managed in eight differently structured health systems – seven European systems and Israel. While these strategies reflect different national circumstances and needs, there appear to be three connected factors driving this organizational realignment: first, rapid technological improvement in clinical and informational capacity among hospitals (both public and private); second, growing patient expectations regarding quality, safety, responsiveness and choice concerning health care providers; and consequently, third, growing political pressure on public authorities to restructure the command and control relationships embedded within traditional governance models of publicly owned institutions.

Analysis and results

More recently, however, health policy researchers have begun to turn away from content-focused evaluation to consider the impact of the underlying process-oriented frameworks that steer and constrain overall health reform behaviour (WHO, 2000; Mossialos et al., 2010). Underlying both successful and not-so-successful reform strategies are substantially different approaches to what has now been termed hospital governance in Europe.

As currently used, the notion of hospital governance encompasses three different levels of hospital-related decision-making: macro, meso and micro. Each level has its own distinct characteristics, with its own separate group of decision-makers. All three levels interact with each other in complex patterns that then define the actual governance structure for hospitals, and in particular for the publicly owned hospitals that are the subject of this study.

Macro level

This level includes national government decisions that determine the basic structure, organization and finance of the entire health care system, and of the hospital sector within it. The decision to maintain publicly operated, tax-funded hospitals, for example, is just such a macro-governance decision.

Meso level

An intermediate level of hospital governance is focused on decision-making at the overall institutional level of the hospital.

Micro level

This level of hospital governance focuses on the day-to-day operational management of staff and services inside the organization. It corresponds to what has traditionally been known as “hospital management” and incorporates such subsets as personnel management, clinical quality assurance, clinic-level financial management, patient services and hotel services (cleaning services, catering, etc.).

This broad conceptual framework of macro, meso and micro levels of hospital governance serves a variety of useful purposes. First, it clarifies and specifies the large number of different activities that contribute to the governance process in the hospital sector. Second, for publicly operated hospitals in particular, it separates out the three levels of decision-making that often get commingled and/or confused within traditional state-run health systems.


In the future, it will be useful to review evidence regarding these and other analytical dimensions of these new governance approaches. In some cases, these new models were the intentional design of a government, and were put in place largely as they were conceived – Norway’s state enterprise approach, for example, as well as England’s Foundation Trusts. In other cases, the models evolved from a set of incremental needs, and were themselves incremental in nature – the five different approaches in Spain appear to have this character. In a third type of case, the original reform model did not work as expected; consequently a new strategy was developed at national level – here, one thinks of England in replacing Self-governing Trusts with the more recent concept of the Foundation Trusts, also Portugal replacing hospitals which were designated as “public companies” in 2002, but were then transformed into PEEHs from 2005. In each case, it will be important to obtain better data relating to how these models have behaved on a variety of indices.

Implications and recommendations

Observations on public hospital autonomy

Within the health sector, these broad policy intentions have led quite quickly to the complex issue of institutional autonomy, and the boundaries within which publicly owned, publicly accountable organizations – especially hospitals – ought to be able to chart their own course. Institutional autonomy is believed by some researchers to be a key factor in improving outcomes that policy-makers seek to achieve: quality of care, clinical outcomes and patient responsiveness (Bloom et al., 2010). This suggests that institutional autonomy is a central factor in determining the degree of success of recent public hospital governance reforms.

Further observations on public hospital governance

While this study focuses predominantly on the capacity for independent decision-making at the meso-institutional level, a number of other important institutional-level issues are also raised. The case study review in Chapter 3 explores the role of the Executive or Management Board, the relationship between the Management Board and the Supervisory Board, the relationship between the hospital staff – particularly the physicians – and both Management and Supervisory Boards, the role financial incentives play in shifting clinically related behaviour of physicians and other professional staff, and the relationship between public sector unions and both boards. All of these roles and relationships form part of the meso-level. The governance framework of public hospitals, and evidence from the case studies presented, provide a useful perspective on each of these challenges.


Governing public hospitals. Reform strategies and the movement towards institutional autonomy

Gouvernement du Québec
© Gouvernement du Québec, 2018