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Management control in public hospitals at the time of prospective payment systems and clinical directorates: a new institutional perspective
Lartigau, J., Naro, G.

LARTIGAU, J., NARO, G. (2011), "Management control in French public hospitals at the time of prospective payment systems and clinical directorates: a new institutional perspective",  European Accounting Association, Rome, 20th - 23rd April 2011



For three decades now, hospitals and non-for-profit organizations have implemented market-based reforms. Many theoretical frameworks have been employed to describe the general movement of public services towards a competitive model. One of these frameworks is particularly interesting for changes appearing in public and professional organizations: new institutionalism. This framework has been used by many researchers and remains a key to understand ongoing reforms in hospitals today.

In the French hospital environment, deep organizational changes - and particularly in management methods - have taken place in the last decade. From 1983 to 2004, French public hospitals were financed under the regime of the overall budget. The principle was simple: every year, a budget was allocated to each hospital; this budget was set on the economic basis of the year 1983 (when the reform was imposed to hospitals) and increased with an annual growth rate. In the early 2000s, public authorities decided to set up workgroups in order to evaluate the current funding system and to think about the possibility of implementing a prospective payment system (PPS) such as other countries (the United States and many European countries) had done before. By the year 2004, the government set an important reform called "Hôpital 2007", including two major changes for hospital management. These two major changes are on the one hand the "Tarification à l'activité" (known under its acronym "T2A") which is a faithful variant of the American PPS, and on the other hand the implementation of medical responsibility centers on the model of clinical directorates. The T2A and the clinical directorates have a deep impact on management routines and especially on the management control function in hospitals. The latter was traditionally run by hospital managers and mainly had budgetary objectives. Now, with the link between funding and medical activity, it must take the level of this activity into account and get involved with technical (medical) procedures.

The changes that we can observe in that domain may be interpreted with a new institutional perspective. As we will see in our paper, New Institutionalism is a solid theoretical framework for our research, able to explain the evolution of the management control function.

However, our study shows that things are more subtle than we could think prima facie. Indeed, a part of new institutionalism is appropriate to give a theoretical basis to our results: for instance, the concept of institutional isomorphism can help to depict organizational changes in the management control function inside hospitals. Nonetheless, those changes aren't justified by a search for legitimacy only, but show internal expectations most of the time. In that situation, the new tools brought by the reform and the rise of new actors in the management control function contribute to a tighter coupling between activity and control.

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