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Hospital autonomy and health reforms

Hospital autonomy and health reforms

Autonomy is defined in the dictionary as “the quality or state of being self-governing, especially, the right or power of self-government”; “existing or capable of existing independently”. In simpler terms it means one who gives oneself one’s own law. However, such absolute criteria are of little help in defining hospital autonomy, and the term “autonomous hospital” has meaning only when used in the sense of fulfillment of specific criteria laid down for the autonomy to be achieved.

Hospital autonomy is generally described in two dimensions: the extent of centralization of decision-making (“extent of autonomy”); and the range of policy and management decisions that are relevant to hospitals (including both policy formulation and implementation. Hospital autonomy forms an integral part of the whole health reform package and is linked to resource mobilization, increasing competition, encouraging private sector participation etc. The nature and extent of autonomy depends on the degree to which the government continues to retain control over the various functions of the hospital particularly such as a) health policy formulation b) allocation of certain resources in particular capital funds c) control over quality and licensing d) regulation of health personnel, including selection and recruitment, training, salaries and wages e) regulation of user fees, allocation of surplus and financial accounts.

There are basically two models of hospital autonomy:

  • Making individual hospitals autonomous and transferring decision making to independent boards.
  • Setting up an organization of hospitals as a governmental organization and then making it autonomous

The advantages of second model are that as the focus is on individual hospital therefore it is simpler to monitor and regulate. Also one autonomous organization requires only one good management team compared to a much larger requirement of trained personnel for many autonomous units. However there are several disadvantages also. For e.g. individual hospitals continue to be non-autonomous due to which the gains from autonomy do not get fully realized. As it is easier for government to have control over single organization therefore effective autonomy cannot be obtained. Moreover an ineffective leadership of one big organization can have larger adverse consequences which will have impact on all the hospitals as compared to ineffective leadership in few small hospitals.

Hospital autonomy can lead to gains in both technical and allocative efficiency in terms of incentive structures, increased public accountability and consumer satisfaction which in turn lead to improvements in the quality of care provided by the hospitals. Within any government or hospital, there are several power centers each of whom play important role in the evolution of hospital autonomy thus leading to an impact on efficiency, equity, revenue mobilization, public accountability and patient satisfaction.

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