Hospital Administration- One of a Species

Author(s): Edith M. Lentz

Source: Administrative Science Quarterly, Vol. 1, No. 4 (Mar., 1957), pp. 444-463
Published by: Sage Publications, Inc. on behalf of the Johnson Graduate School of Management,
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EdithM. Lentz

Hospital Administration-
One of a Species

Using hospital administration as the specific example, the author

suggests three categories of analysis as necessary for the development
of a typology of administration: (a) the social role of the institu-
tion or its place in the cultural environment; (b) the economic role;
(c) the institution's internal structure. It is shown that the hospital's
place in the community has changed and that a large measure of
present administrative problems lie in the transitional state. The hospi-
tal's sources of supply, its consumer relationships, and its labor market
are all influenced in some measure by this transition. The internal
structure of the institution has become increasingly complex, and its
authority system and organizational pattern have shifted accordingly.
The author is a member of the faculty of the Course in Hospital Ad-
ministration at the University of Minnesota.

ANY branch of learning that deals with complex subject matter

will sooner or later develop a classification system wherein each
variety of case may find its appropriate place. This article suggests
the possibility of such a classification system in the science of ad-
ministration. It will use hospital administration as its content, but
one may hope that the same system of concepts might be applied
to other types of administration as well, until all are brought into
logical relationship with each other. This paper will discuss three
areas of classification: (a) the social role of the institution, (b) its
economic aspects, and (c) its internal structure.

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 HOSPITAL ADMINISTRATION 445
THE SOCIAL ROLE OF THE INSTITUTION
First consideration, in placing any institution within a system,
must be given to the way it is seen to fit into its cultural environ-
ment, the evaluation which it is given, and the configuration of
other social organizations of which it is a part.
The modern hospital cannot be understood without an under-
standing of its traditions. Hospitals have changed. They began
in our society as an expression of Christian concern and were the
gift of the fortunate to the unfortunate. It was in this guise that
they became rooted into the social fabric of our society. Those who
donated money to them demonstrated thereby not only their virtue
but their social position and their allegiance to upper-class tradi-
tions of noblesse oblige. People who went to the hospitals as pa-
tients, on the other hand, were seen to be the recipients of charity.
The two groups fell at the opposite ends of the social scale; hence
the way hospitals were perceived depended upon the social position
of the perceiver.
As biological and medical sciences advanced, the hospital began
to offer the hope of cure. The rich began to patronize certain hospi-
tals, and special accommodations were set aside for them, including
private rooms, a distinctive dining service, and private nurses.
To go to the hospital was no longer seen as a disgrace. It was not
until recently, however, that economic and social conditions made
it possible for the middle classes to utilize hospital services. Today
everybody accepts them; most of us take them for granted. The
hospital may be seen as a special kind of public utility designed to
serve the total community. Yet the traditions of the past, the old
altruistic flavor, continue.
In many nations it is accepted as only natural that such a public
utility should be operated by the government. In this country our
hospitals designed for long-term illnesses such as tuberculosis and
mental diseases, along with those set aside for the military, are
government owned and operated. Otherwise the tradition of
voluntarism which keeps American museums, symphony orches-
tras, and many universities in private hands has also kept the
majority of our general, short-term hospitals in the control of
religious, fraternal, or other civic-minded groups which operate
them as nonprofit institutions.

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 446 ADMINISTRATIVE SCIENCE QUARTERLY

In view of the history of hospitals, it is perhaps not surprising

that one finds persons of the highest social prestige associated with
hospitals and sitting on their policy-making boards. They represent
the "best families in town," that is, those with traditions of civic
responsibility and service as well as comfortable incomes and a
propensity to share them with the less fortunate. Some hospitals
have been seeking to achieve a wider representation of community
groups on their boards, but this is not yet typical of the nation as a
whole.
If one stops to consider the values upon which our society places
highest esteem, it becomes easy to see why hospital service continues
to be so prestigeful.' Certainly humanitarian service is one. Learn-
ing is another. Youthfulness, health, and physical vigor, so im-
portant in a pioneer society, remain highly prized out of proportion
to the evaluation placed upon them in other cultures, we are told.
We prize efficiency for efficiency's sake and look upon large-scale
business enterprise as somehow symbolizing this virtue. And
finally, we tend to attribute merit to almost any kind of scientific
endeavor. Hospitals embody these virtues in varying degrees, and
generally speaking their prestige varies correspondingly. The
highest standing is normally attributed to the medical center
associated with a university, which combines them all.
The medical center has multiple functions. Almost all hospitals
do, but the medical center may be seen as an extreme example. A
generalization might be made that the more varied the functions
of an institution the more complex the administrative task, since
shifts in emphasis through time will necessitate a series of decisions
concerning the priorities among these functions.
The original function of the hospital, to go back a bit, was cus-
todial care of the dying poor. Curative care, as contrasted to
custodial care, became a second function. Custodial care was rela-
tively easy to provide, but curative care requires highly trained
personnel. The education of such personnel became the third
function of the hospital. Once doctors were the only recognized
therapeutic agents. Today nurses, dietitians, social workers, and a
wide variety of technicians are so recognized, and the hospital has
1Robin M. Williams, "Value Orientations in American Society," in American
Society: A Sociological Interpretation (New York, 1951), pp. 372-442.

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 HOSPITAL ADMINISTRATION 447
become their school and laboratory. Scientific research into the
cause as well as the cure of disease is a still more recent addition to
hospital functions. And finally the beginnings of preventive medi-
cine have placed upon hospital management the necessity of
allocating money, time, and personnel to health education. A
hospital under religious control may have additional functions.
The administrator and board of trustees must constantly juggle
these purposes and needs in order to maintain a suitable balance
among them and to see that those deemed most important within a
given institution are met first.
All of these things have greatest significance in the administra-
tive functioning of hospitals. The administrator is responsible to
a board which represents not only economic power over him but
ethical and humanitarian values as well. The board expresses the
voice of dominant groups in the community and its most respected
minds. Their judgment, even on minor matters, is of consequence
in the daily routines of the hospital. A hospital board is typically
more prone to "interfere" in administrative details than is a similar
board in industry, for example; it is more concerned with particu-
lar cases. Similarly the medical staff of a hospital, which represents
its scientific aspects, has unusual power and prestige within the
hospital's internal structure. The administrator is seen as repre-
senting the need for efficiency and smooth coordination. Hospital
government is a series of accommodations and compromises among
these power groups, as we shall see.
The social role of the hospital may come into better focus if it
is compared to organizations of somewhat similar nature. The
primary health agencies of our communities continue to be the
private family and the doctor's office. We go to hospitals only when
our homes and the doctor's office fail to encompass our health
needs. The doctor's office shares with the hospital the overtones of
humanitarian service but has the additional status of independ-
ence. Physicians normally operate as private practitioners, answer-
able only to themselves and their medical association. This freedom
from control gives the doctor prestige, for our culture prizes
individualism as it does voluntarism. The public health office, on
the other hand, deals with the social and biological environment of
both the sick and the well, yet has less status than the hospital be-

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 448 ADMINISTRATIVE SCIENCE QUARTERLY

cause it is subject to government control. Hospitals usually are

characterizedby a larger scale of operation than are nursing homes
or diagnostic clinics. This gives them the higher place, unless the
clinic has an unusually glorified reputation, such as that afforded
the Mayo Clinic because of its perceived scientific excellence.
Purely scientific laboratories, however, such as those operated by
the great drug companies, have less status than the hospital pre-
sumably because they are considered to be dominated by the
profit motive.
In many respects the hospital is closer to the university in its
public character than to any of the other organizations mentioned
here. Both have a public-utility aspect, yet command the volun-
tary services of notable people. Private universities, generally
speaking, have higher prestige among us than do publicly sup-
ported ones. The university, on the other hand, serves only some
of the people and thus has a narrower basis for the tradition of
altruistic service which dignifies the concept of the hospital in
modern society.
To summarize, the modern, general, short-term hospital is a
special kind of public utility which remains for the most part in
private hands, yet provides service to all the people. It is seen to be
an expression of humanitarian concern, and service in its cause ele-
vates the social position of the individual. The larger hospitals
serve many functions and combine the prestige of big business and
scientific endeavor with that of the humanitarian arts. This com-
bination of factors brings about social expectations which are so
extreme as to be somewhat difficult for the individual institution
to realize.
THE ECONOMIC ASPECTS OF HOSPITALS
There are two ways to view the economic question: from the
standpoint of the hospital industry as a whole and from that of the
individual institution within the industry.
Figures relating to the industry as a whole are impressive in-
deed. In 1955 there were 6,970 hospitals in the United States and
more than twenty million patient admissions, an increase of five
million admissions in the past nine years. These hospitals employed
more than 1,200,000 full-time persons and spent approximately five

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 HOSPITAL ADMINISTRATION 449
billion dollars, making the hospital industry the sixth largest in
the nation.2 One gets the impression of a colossus, but this is a
mistaken image.
In the first place, the industry is in the service field and therefore
has little effect on -the economy as a whole except insofar as it
bolsters it by helping provide it with healthy personnel. On the
other hand, it is highly influenced by the economic pressures
exerted by the other, more dominant institutions. At least, past
experience has been that in times of general economic depression,
occupancy rates in private hospitals drop like a plummet. Pro-
spective patients postpone elective surgery and try to care for their
medical needs at home as long as possible. At such times the hos-
pital cannot close,down its facilities to the same extent as do com-
mercial enterprises. Staff, equipment, and beds must be held in
readiness for disaster, epidemic, or other acute human need.
During times of renewed prosperity occupancy rates zoom upward
and overcrowdedness occurs. It still requires an average of three
years to train a nurse, however, and considerably longer than that
to train a doctor; hence the educational functions of a hospital
continue unabated through good times or bad. Similarly, research
may be curtailed, but the careful keeping of records upon which
future research must be based must continue. In other words, the
hospital is an agency which continues to function even when it
must limp along without income from patients for prolonged
periods. Whether hospitalization insurance schemes will greatly
ease these crisis situations remains to be proved.
In the second place, despite its total size, the industry is relatively
weak in terms of organized economic strength. Traditionally,
nongovernmental hospitals operated as independent units. They
did their purchasing locally, employed local people, and dedicated
themselves to the service of their immediate geographical area.
Record keeping was minimized, and there were few standards
against which an individual institution could be measured.
Today the situation is changing. The American Hospital Asso-
ciation has five thousand institutional members. It acts in similar
2George Bugbee, in Forward to Temple Burling, Edith M. Lentz, and Robert N.
Wilson, The Give and Take in Hospitals (New York, 1956), pp. v-vii.

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 450 ADMINISTRATIVE SCIENCE QUARTERLY

capacity to that of other trade associations, having advisory power

over its members, speaking for them on public issues, and en-
couraging the pooling of their knowledge. It has encouraged the
formation of local and regional hospital councils, which in some
instances have brought about concerted action on economic prob-
lems. It is also one of five member agencies composing the Joint
Commission on Accreditation of Hospitals, another voluntary
agency, which acts to raise the level of medical and hospital care
throughout the nation. Its powers are largely those of persuasion
but are not by that account to be considered negligible.
Because hospitals used to be built at the initiative of wealthy
donors, their geographical placement tended to be capricious. Areas
where many wealthy people lived had many hospitals, while other
parts of the nation were seriously underprivileged with respect to
health care. Today, just as there is an ecumenical movement among
our churches to consolidate their efforts, so among our hospitals
there are forces at work to consolidate institutions and services in
order to improve the level of service offered the public and to
lighten the financial burden of hospital care. Federal funds are be-
ing distributed with regional planning schemes in mind which are
designed to spread hospital services rationally within the separate
states.
It is important to remember, however, that despite these in-
fluences of national and regional origin, the typical community
hospital continues to pride itself on its independence and has a
deeply rooted habit of plotting its own course. Institutions, like
people, have a sometimes fierce pride in their history and indi-
vidual identity. For these reasons it is not appropriate to speak
of the "hospital industry" in the United States. One must continue
to see it as it is perceived by "insiders," as 6,970 institutions which
are only now beginning to see themselves as possible parts of a
whole.
Roughly four thousand of these seven thousand institutions
have less than one hundred beds.3 The average of all short-term
hospitals, including those operated by government agencies, has
only 106 beds. Hospitals can thus be classified in a category with
8The statistics in this paper are drawn chiefly from Hospitals, Administrator's
Guide Issue (Aug. 1955), pt. II.

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 HOSPITAL ADMINISTRATION 451
social clubs, restaurants, and merchandizing, as characteristically
taking the form of fairly small, retail-service establishments.
Any institution of comparable size can be expected to have con-
sumer relations which might be termed intimate in nature. In
the case of the general, short-term hospital this intimacy is exag-
gerated by the fact that the consumer remains on the premises
twenty-four hours a day for an average stay of eight days per hos-
pital admission, and the basis of his care is about as personal as one
can imagine.
Hospital services, unlike those of other retail agencies, are often
unplanned for, unwanted, and frequently bitterly resented as evi-
dence of waning physical vigor. Hospitals deal with people who are
involved in crisis situations. The patient and the hospital employee
are caught in a relationship which cannot be routinized. Emotional
stress arising from acute human need, gratitude, worry, and,
occasionally, personal outrage may influence behavior and under-
standing. The economic aspect of patient care is thus piled on top
of a sometimes turbulent mass of feelings. It is perhaps obvious why
public relations will continue to be an important field of special-
ized training within hospital administration, even after economic
factors become-satisfactorily adjusted.
That possibility seems to be still in the far future. As we have
seen, once hospitals were accepted by the community as charitable
institutions supported by the wealthy for the benefit of the poor,
but changes in the structure of our society have made this institu-
tional form outmoded. The numbers of dependent poor have
diminished, and today's self-respecting working class carries hos-
pitalization insurance to a steadily increasing degree. What is more,
there is less giving of funds for charity on the grand scale. Dona-
tions to hospital fund drives today come from a fairly wide range
of the social scale, and many small donations have appeared in
place of the few enormous ones. Proportionally, however, dona-
tions have come to account for a steadily declining percentage of
total hospital income.
The typical nonprofit hospital today is trying to maintain itself
at or near the financial break-even point. It has become common
practice to charge the patient the "full cost of his care," which
means his share of total operating expenses depending upon the

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 452 ADMINISTRATIVE SCIENCE QUARTERLY

type of accommodations he selects. On the other hand, most non-

profit hospitals do not expect patients' fees to cover capital ex-
penditures. Money for the purchase of new buildings or grounds,
basic equipment, and many social services continues to be provided
through private donation, public subscription, or voluntary ser-
vices. Since World War II federal funds have helped subsidize new
construction. In this way the modern hospital is making its ad-
justment to a period of social change and to the cross-pressuresof
a capitalistic society, which expects financial solvency of its insti-
tutions, and the humanistic tradition, which expects hospital
services to be made available to all on the basis of need.
This type of accommodation is widespread and is fairly well
accepted among hospital officialdom. It is not so well accepted, or
even recognized in some instances, by the public at large. Where
people have become accustomed to subsidized hospital care it is
hard for them to accept anything else. Consequently it is not un-
usual to find a hospital still caught in the interim stage of develop-
ment: struggling along beneath staggering deficits until faced with
decay and then outraging the community by inaugurating a more
realistic policy of charges based upon actual costs.
Government bureaus, like the public at large, sometimes find it
hard to accept the new definition of charity as extending to facilities
and not to services. Hospitals book patient fees at or near cost, then
expect reimbursement either by the patients themselves or some
"third-party payer," which is the term used to include insurance
agencies, social-work agencies, or government welfare departments
responsible for the relief of medical indigency. Great are the argu-
ments over the definition of indigency, and many are the hospitals
that are obliged to make up the difference between the monies paid
them by civil authorities and the actual cost of patient care. The
tradition of deficit financing, however, is definitely waning. The
third-party payer, with the Blue Cross as the most popular form of
prepaid insurance, is steadily moving into ascendancy as the finan-
cial mainstay of the hospital.
Prices for hospital services are now in considerable flux. The
condition of minimizing record keeping is giving way sufficiently
to permit the kind of accounting system which amortizes debts,

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 HOSPITAL ADMINISTRATION 453
minor capital expenditures, and depreciation costs. Therefore these
things are beginning to be listed on the books as routine operating
expenses to be charged against patients' fees. A serious effort is
being made to establish cost figures on specific items in order to
adjust prices rationally. As long as hospital patients were paupers,
the public considered it all right for the hospital to sell services at
or below cost. When a hospital provides care below cost to people
well able to pay commercial rates, however, it competes with drug-
stores, pharmaceutical houses, and even other hospitals in supply-
ing drugs and services. In this interim period prevailing rates con-
tinue to be the most commonly used index for many price
categories.
While hospital cost and price factors remain in flux, the con-
sumers of hospital service will doubtlessly continue to complain.
They have nothing stable upon which to base their expectations;
hence any price will seem too high. The situation is only aggravated
by the fact that as consumers they have so little basis for judging
quality of service. The local hospital, like the local doctor, may
provide the best care in the world, but in the absence of a satisfac-
tory standard of measurement, how are they to be sure of that?
So much for the economics of consumer relations.4The hospital's
market of supplies is also somewhat unique. For a long time
salesmen from hospital supply houses and drug companies acted
as a major connecting link among the thousands of small institu-
tions. They were the educators of the hospital field; it was through
them that the administrators of tiny hospitals learned what was
going on elsewhere, which methods were being favored, what
systems of control inaugurated. Today the American Hospital
Association acts as the formal coordinating body and information
center, but these salesmen are still a prominent part of the com-
munication system. They operate for profit in most instances, but
yet they are not wholly unmindful of the service motif and may be
found contributing to fund drives as well as working overtime
on plans for hospital construction or for new services. This tradi-
4For further observations on consumer relations, see American Council on Educa-
tion, University Education for Administration in Hospitals (Washington, D.C., 1954),
particularly Chapter II, "Characteristics of Hospital Administration," pp. 20-31.

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 454 ADMINISTRATIVE SCIENCE QUARTERLY

tion helps to mitigate against a widespread adoption of impersonal,

competitive bidding for hospital contracts or the use of national
rather than local sources of supply.
Some hospital supplies come from government sources (such as
biologicals and some serums). Others come from charitable organi-
zations such as the National Foundation for Infantile Paralysis and
the American Cancer Society. The number of medical foundations
is increasing rapidly, and their donations are often accompanied
by demands. The usual exchange is goods and services on the one
hand and space, personnel, and occasionally voluminous record
keeping on the other. While such donations are customarily
welcomed by the administrator, they add to the complications of
his work, too. They cannot be included in advance plans nor can
they be counted on absolutely, since they are outside the control
of any given hospital.
Similarly the hospital's labor market is now outside the control
of any single institution. The average, short-term, nonprofit hospi-
tal today employs approximately two persons for every occupied
patient bed in order to keep the hospital staffed around the clock.
Payroll costs account for between 60 and 70 per cent of total
operating expenses despite the fact that characteristically hospital
employees receive lower wages than those prevailing in the com-
munity for comparable work. State licensure laws and the fact that
practitioners in medical and auxiliary fields are organized through
their professional associations help to make the hospital labor mar-
ket inflexible. The increasing degree of specialization has accen-
tuated this inflexibility by increasing the degree of blocked mo-
bility among these groups. For example, it is no longer-possible for
a nurse to move into a position of laboratory supervisor in most
hospitals. She would require additional formal training first. A
graduate nurse doing general duty work may not even be able to
move into a nursing administrative post without going back to the
university for her bachelor's degree. It is thought by some that these
strictures on vertical mobility within a given institution have
helped cause the increased horizontal mobility or transiency among
hospitals. Since a nurse (or technician or dietitian) cannot advance
herself by sheer seniority, she lacks the incentive to stay in one
place. It therefore has become increasingly difficult to get and keep

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 HOSPITAL ADMINISTRATION 455
a stable work force. Personnel problems within the hospital will be
discussed at greater length in the next section of this paper.
Volunteers help to complicate the labor situation. The "gray
ladies" and women's auxiliaries supplement ordinary hospital em-
ployees, but, like supplies donated by the foundations, their serv-
ices cannot be planned for in advance or counted on absolutely.
Approximately one thousand of the general, short-term hospitals
are controlled or closely affiliated with religious organizations,
and many of these draw a considerable portion of their labor force
from sisterhoods which donate their full-time services. These are
people who devote their lives to the hospitial and are on call around
the clock. They may also remain part of the hospital family years
after their physical strength has waned and their greatest contribu-
tion has become increasingly spiritual rather than material. How
can one estimate the value of their services in a bookkeeping entry?
Finally, a continuing factor in the economic aspect of hospital
care is the tempo of technological change in the medical and allied
arts and sciences. During the depression of the 1930s there was a
slowing down of the tempo of change. Buildings and equipment
grew steadily more obsolete. With the beginning of World War II
there was a sudden acceleration throughout the entire medical
field. Military necessities demanded advances in theory and prac-
tice. The introduction of antibiotics brought a wealth of innova-
tions in itself. In addition, wartime prosperity flooded the hospitals
with patients, and this overcrowding in obsolete buildings helped
necessitate a virtual revolution in hospital architecture, organiza-
tion, and practices. With the end of the war came the boom in
hospital construction.
There was need to hire new occupational groups to make the
latest therapies available to patients. Thanks to insurance, patients
began coming to the hospital earlier in their illnesses, and thanks to
the new advance in medicine, they left the hospital more quickly.
This turnover of patients increased the volume of work for hospi-
tal personnel. The older professions were metamorphosed: they
developed extensive divisions of labor in order to permit medical
specialists, whether doctors, nurses, or technicians, to concentrate
upon their highest skills while auxiliaries did the more routine
tasks. There was need to train and retrain personnel all along the

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 456 ADMINISTRATIVE SCIENCE QUARTERLY

line in order to keep them abreast of developments. Along with

the problems of revamping obsolete buildings and equipment
went that of working with obsolete people, and not everybody was
capable of making the adjustments which were demanded of him.
Educational costs continued to mount.
To summarize: although the hospital industry is sixth largest in
the nation, the general, short-term hospital is characterized by
small, independent units under private control. The trend is
toward charging the patient the full cost of his care and limiting
"charity" to the provision of buildings and other capital goods.
Centralizing forces are at work to bring about standardized pat-
terns of operating, purchasing, accounting, and therapeutic prac-
tices. The financial picture is complicated by unpredictable fluc-
tuations in the consumer market and by consumer expectations
which are now outmoded. The suppliers' market is complicated by
donations and the labor market by volunteers. The labor market
is, in addition, highly controlled and highly transient. Perhaps the
most serious source of instability in the hospital today is the recent
and continuing tempo of change in the technology of medicine
and allied fields.
INTERNAL STRUCTURES OF HOSPITALS
Transition and the confusion it denotes set the tone of institu-
tional relationships within the hospital today.
When hospitals were regarded as charitable institutions, it was
considered only appropriate that employees work for subsistence
wages. In some places hospital employment was seen to be one of
the forms of charity. People who could not get work elsewhere
came to work where housing, meals, and medical oversight were
provided in lieu of more generous wages. Nurses, laundry workers,
kitchen help-all lived on the hospital grounds, ate three meals a
day there, and associated primarily with each other, since they all
worked hours which precluded their participation in normal
community activities. Hospital employment was more than just
a job: it was a way of life. The employer-employee relationship
was one of paternalism, benevolent for the most part, but as with
paternalism elsewhere the benevolence was sometimes lost sight of.
Within the hospital the board members held highest place in

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 HOSPITAL ADMINISTRATION 457
the authority system. Usually these were self-perpetuating affairs,
and members served as volunteers for part of their leisure-time
activity. Some of them never set foot inside their institution at all
but ruled it from a distance. Others seemed to regard the hospital
as if it were their feudal estate and visited it daily, giving personal
direction to the work of employees at all levels.
Next in standing to the board came the doctors. They donated
their services to indigent patients and helped to teach the nurses
and interns. Actually the medical staff dominated most hospital
routines because their orders initiated activities for the nurses.
The administrator, or superintendent as he was then called, hired
personnel, maintained property, and saw to it that doctors' orders
were faithfully carried out. He was clearly third man down in
the hierarchy.
Most of the work of the hospital was done by student nurses,
including much of the office detail, the cleaning, and the cooking.
These young women usually were drawn from the local area, served
the hospital in exchange for their training, and left it upon gradu-
ation to take up private duty nursing in people's homes. In many
hospitals there was but one graduate nurse on duty on each of the
two daily shifts; these were "nursing superintendents" who super-
vised the work and education of the students.
Within the nursing group there was strict authoritarian con-
trol. Each student was taught to obey without question all of her
superiors, and these included all members of the medical staff,
the administrator, the nursing superintendents, and nursing stu-
dents in the more advanced classes. Medical students and interns
were subject to similar controls, and emphasis was placed upon
their discipline, self-sacrifice, and obedience. Relations between
doctors and nurses at all levels resembled those within each pro-
fessional hierarchy, being highly ritualized and formalistic. Ap-
parently nobody dreamed of equality. It was assumed that the
"good of the patients" demanded the kind of rigid control over
individuals that only an authoritarian system could provide. Non-
professional employees were subject to the same kind of discipline,
except that less was expected of them, hence even less respect was
accorded their individual opinions.
All of that changed, but in many cases the changes did not occur

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 458 ADMINISTRATIVE SCIENCE QUARTERLY

until World War II, when military demands, the technological

revolution, and booming occupancy rates combined to render obso-
lete the ancient system of relationships. To get and keep employees
in the face of extreme competition, hospitals had to raise wages,
adopt modern personnel policies, and engage in extensive experi-
mentation in order to find a division of labor which would maxi-
mize the skills of what personnel they had left. The technological
revolution brought about an educational reform within the nurs-
ing profession, and students began to spend considerably more
time in the classroom and less on the wards. A hospital school of
nursing used to be an economic advantage to a hospital. Today it
is more apt to be an economic handicap. Graduate nurses and nurs-
ing auxiliaries had to be hired in increasing numbers. Today the
typical hospital is devoting half of its payroll funds to nursing
personnel.
Today most hospitals have personnel policies which, on paper,
look very similar to those in enlightened industry. They also have
left over from the old days, be it remembered, personnel at every
level whose mental attitudes and behavior patterns were set under
the older system of relationships. The result is a welter of com-
promises, the traditional system impinging on the modern one
at a thousand unexpected junctures. Among the most frustrating
and fascinating problems of hospital administration is that of
keeping the old and the new working side by side with a maximum
of harmony.
This task would be considerably easier if the administrator had
clear responsibility for the management and integration of his
institution. As it happens, the changing times also brought about
a partial shift in the power structure, but the administrator's role
still is not clearly defined.
In the traditional hospital the place of the doctor was not very
different from that of the professional employee in industry in
the old days of the [Link] owner-managerof a fairly
large shop very often hired a works superintendent to look after
the daily management problems, but if a chemist or engineer
wanted something he thought nothing of approaching the owner-
manager directly with his problem. Having settled the matter with
him, the professional would then pass the decision on down to

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 HOSPITAL ADMINISTRATION 459
the works superintendent with the expectation that he would act
upon it in suitable fashion.
When industry changed to its present form of corporate control,
a very similar change must have occurred to that which is happen-
ing in hospitals. Today engineers and chemists do not carry their
problems directly to the board of directors. They go through chan-
nels, and the executive director or administrator of the corpora-
tion is the one who makes final decisions on management problems.
In hospitals, as more professional personnel were hired and or-
ganizational forms grew in complexity, the role of the man whose
responsibility it was to coordinate the efforts of these people grew
in importance, hence in prestige. It was at this time that profes-
sional hospital administration training at the university level
became available, and high-powered and well-trained administra-
tors became more common. Today the hospital administrator re-
sembles his counterpart in industry; he is the head of an extensive
hierarchy with control over the communication system. Members
of hospital boards have learned and are learning that it pays to
let their full-time representative handle the management of their
institution, and doctors are being asked to go through channels
when they have requests for equipment or suggestions for improved
services.
That kind of submission to bureaucratic forms may or may not
have come readily to chemists and engineers. It does not sit well
with the medical profession. These are independent practitioners
who are not on hospital salary and over whom the hospital admin-
istrator has very little authority. They are officially "guests of the
institution" and continue to donate their services to the indigent
patients, to the nursing school, and to intern training. They are
appointed by the board and are governed by their own medical
staff organization. Moreover, the bulk of the doctor's work is done
outside the hospital, where his prestige as a private practitioner
remains relatively undiminished. It is not easy for him to yield
to bureaucratic control in one segment of his work life, particu-
larly if he is an older man who trained at a time when hospital
superintendents were considered subordinates and knew their
place.
The power structure within the hospital today remains three-

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 460 ADMINISTRATIVE SCIENCE QUARTERLY

pronged. Board members continue to make their convictions

known, and some of them feel strongly that their job is to protect
the public from "case-hardened professionals." The medical staff
continue to share legal responsibility for the care of their patients;
hence they must have the right to initiate activity for nursing per-
sonnel who serve those patients. The administrator is responsible
for coordinating the work of all hospital personnel, whether they
are on the payroll or not, and for keeping the institution on as
even a keel as is possible. Any given hospital employee, therefore,
may find himself responsible to three sources of authority.
The split in the power structure of hospitals is not wholly
unique. Universities have their cleavage between teaching staff
and administrative staff. Hotels have problems in uniting the
"front of the house" personnel who receive tips and the "back of
the house" personnel who do not. Department stores are caught
in the difference of viewpoint between the buyers on the staff
and the clerks who sell. In all of these instances employees face
difficulties of communication, and administration requires all
the arts of persuasion to keep the staff working in harmony. In
all of them, presumably, accommodation is made, and life goes
on despite handicaps. In the hospital it is possible to argue that the
split in authority works to the benefit of the patients since it sets
up a series of checks and balances. So far as the administrator is con-
cerned, however, there is no denying that it complicates his task
sometimes to the point that the job becomes almost untenable.
It is especially difficult for the man who comes to hospital ad-
ministration with a business background. In business, prestige
and power normally go to the administrative group, the paper
workers who make the plans and initiate the activities of others.
Production workers have lower status. In the hospital the honor
and glory go to production workers, namely, the doctors and
nurses. Their craft is an ancient one, and the sentiments surround-
ing the medicine-man-priest are sometimes amazingly present
among us. It is this differential in power and status which makes
it so difficult for the administrator to govern the institution for
which he holds responsibility.
The doctors are not the only scientifically trained professionals
who present difficulties to hospital administration. Nurses, dieti-

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 HOSPITAL ADMINISTRATION 461
tians, pharmacists, anesthesiologists, and medical technicians have
their own national professional associations with their codes of
ethics, standards of professional conduct and freedom, rules for
admission of novices, and control over their training and employ-
ment. These associations hold meetings and institutes which mem-
bers are expected to attend. How much membership in such an
association influences the behavior of a given hospital employee
differs among individuals and hospital situations. In some instances
the membership is merely symbolic of a psychological identifica-
tion on the part of that employee. In others a body of employees
may be found utilizing their professional association to bring
standards of performance and employment relationships to as
ideal a level as their combined powers of persuasion can bring
to pass.
Several of these national organizations have power of accredita-
tion over hospitals. Usually this is voluntary, that is, the organi-
zation can enter a hospital only upon official request of its board
of trustees, and the board does not have to accept the conditions
set by the agency for achieving its seal of approval. The difficulty,
of course, is that the penalty for not having this seal of approval
may be that of not appearing on an approved list, hence losing
prospective applicants for training courses, discouraging potential
professional employees, and losing face within the field of hospital
administration. Accreditation provides official recognition that an
institution is in the top group of hospitals, a recognition which
is cherished by those hospital boards that wish to be known as
progressive.
It may be seen that the administrator of such an institution has
many pressuresexerted upon him. He must keep all groups content
and satisfied that their work is being maintained at a high level,
that education is available to them to keep them acquainted with
developments in their field, and that their working conditions are
appropriate and equal to those in other good hospitals across the
nation. Managing proud people can be gratifying but difficult.
Working with many proud occupational groups can be likewise.
The hospital administrator today cannot use authoritarian meth-
ods to coordinate his organization. Perhaps this is also true of
other modern organizations, but it seems unlikely that many

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 462 ADMINISTRATIVE SCIENCE QUARTERLY

other institutions contain an equal number of lively, well-

informed, tightly organized, and sternly principled professional
groups as this one does.
Since it is so difficult, why would anybody take on the task of
hospital administration? The meaning of hospital employment can-
not be understood without reference to the patients, nor, I think,
without reference to the ethical standards of our culture. The
truth of the matter is that we are so educated that life seems worth
while when we are working hard at difficult problems and when
we can feel that our efforts result in easing life's burdens for others.
Hospitals pay living wages now. Nobody is getting very rich on
a hospital salary, but many are leading rich lives in terms of satis-
faction. The reward-and-punishment system of the hospital, then,
is not quite the same as in some other parts of our society. That
is precisely why it has appeal for people who do not find suffi-
cient satisfaction in highly materialistic employment. That is why,
too, private citizens continue to devote their services and money
to hospital causes. The satisfactions found by volunteers, by medi-
cal and auxiliary workers, and indeed by hospital personnel at all
levels are shared by the administrator as well. He knows his work
is significant; therefore he can accept its frustrations.
CONCLUSION
In order to understand the administrative task in any institu-
tion and to compare it to that of other types of administration, it
is helpful to consider the way the institution itself is structured and
how it is perceived by the community. One would want to know
what functions it has and the degree to which it is experiencing
change. The economic aspects of the institution help to shape the
administrative task; hence it is necessary to ascertain its degree of
stability, the extent of competition it must meet, the relative rate
of technological change within it, its sources of supply and of labor,
and its relation to its consumers. The internal structure of the
institution should be noted: one would want to know how many
people work within it, the degree of organizational complexity in
which they find themselves, the nature of the authority system,
the extent of occupational hierarchy, and any cleavages in the struc-
ture, as well as the habitual pattern of labor-management rela-

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 HOSPITAL ADMINISTRATION 463
tions. Finally one would want to inquire how the people within
the institution regard themselves and their work; one would want
to know what are the psychological rewards and punishments of
their institutional relationships. Having these things in mind, the
work of the administrator may begin to come into focus.
Once such a frame of reference is established, the differences
and similarities among types of administration could be compared
and our total sum of knowledge made more secure.

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