Managerialism and Profession‐Based Logic: The Use of Accounting Information in Changing Hospitals

• Published date: 01 November 2014
• Date: 01 November 2014
• DOI: http://doi.org/10.1111/faam.12043
• Author: Inger Johanne Pettersen,Elsa Solstad

Financial Accountability & Management, 30(4), November 2014, 0267-4424

Managerialism and Profession-Based

Logic: The Use of Accounting

Information in Changing Hospitals

INGER JOHANNE PETTERSEN AND ELSA SOLSTAD∗

Abstract: The hospital sector has undergone significant management reforms over

the last decades. These reforms include more use of accounting information. This

paper focuses on the kinds of logic that guide clinical managers’ perception of their

management control practices when including accounting information in decisions.

A survey study was undertaken among clinical managers, and it was completed

by interviews to go deeper into the management control processes in three large

hospitals in the middle and northern parts of Norway. We found that there is a

triangle of logic which may change and form different patterns, according to different

contexts and variations in professional background.

Keywords: clinical managers, accounting information, professional logic, context

INTRODUCTION

The hospital sector is one of the areas in which public management reforms have

been extensively implemented over the last decades. These reforms include fea-

tures such as resource allocation linked to performance indicators and payment

systems, giving managers the power and right to make an increasing range

of decisions at department levels. Consequently, financial management and

accounting information also play an increasingly more significant role in manag-

ing hospitals at department levels (Ellwood, 2008; Lapsley and Schofield, 2009;

and Lapsley, 2007). However, this rationalistic view expressed in the reform

initiatives may conflict with the identities of the health professions. These

∗The first author is from Trondheim Business School, Norway. The second author is from

Harstad University College and Trondheim Business School, Norway. An earlier draft of

this paper was presented to the 6th International Conference on Accounting, Auditing and

Management in Public Sector Reforms, Copenhagen on 1 – 3 September, 2010 and to the

Neon-conference, Tromso on 24 – 26 October, 2010.

Address for correspondence: Inger Johanne Pettersen, Trondheim Business School, 2004

Trondheim, Norway.

e-mail: Inger.Johanne.Pettersen@hist.no

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364 PETTERSEN AND SOLSTAD

professions are distinguished from other occupations by their members having

the exclusive right to determine how their professional knowledge is practised,

who can legitimately perform its work, how the work should be done, if and

when it should be evaluated and what kind of evaluation criteria should be

used.

The aim of this paper is to explore how clinical managers perceive their

practices as they negotiate the instrumental prescriptions in the management

reforms and the profession-based logic in medical practices. We study man-

agement control in order to understand how the practices interact with the

logic guiding action and the accountability expressed by the actors. Historically,

the delivery of health care has been based on the functional autonomy of

professionals, whereas the management reforms indicate more explicit use of

performance measures (Mo, 2008). Earlier research has questioned to what

extent these management reforms in the hospital sector have penetrated at

clinical levels (Jespersen et al., 2002; Jacobs et al., 2004; and Lapsley, 2007).

Findings also indicate that medical management and the professional logic still

have a strong standing in hospitals even several years after implementation

of national management reforms (Torjesen, 2008). Other strands of research

have shown a variety of practices (Llewellyn, 2001; Model et. al., 2001 and 2007;

Kurunm¨

aki et. al., 2003; Kurunm¨

aki, 2004, Jacobs, 2005; Lehtonen, 2007; and

Martiniussen and Magnussen, 2011).

This paper contributes to this literature as it shows that there is a triangle

of logic guiding clinical managers, and that this logic may change and form

different patterns according to different contexts and differences in the

professional background of the clinical managers. Furthermore, differences in

the logic behind action also stem from different kinds of accountability. In

a normative approach, management control is strongly linked to structural

modes of accountability, with the emphasis on clear lines of authority. However,

accountability is not a clear-cut concept (Sinclair, 1995; and Jacobs, 2004). When

it is a part of a management control system, it differs from accountability towards

patients and professions (Jacobs, 2004). Our research extends this differentiation

by showing that accountability may interact with different forms of logic.

A survey study among clinical managers and interviews of a group of

respondents were undertaken in 2008 and 2009 with the focus on management

control practices. The management accounting information (MAI) supplied

to and used by middle managers is viewed as a cornerstone of management

control. The term MAI might cover a variety of financial and non-financial

measures. MAI includes the calculation of deviations between budgets and actual

costs, productivity indicators (level of activity relative to number of employees,

diagnostic groups), statistics about waiting times for hospital treatment and the

reporting of treatment failures. The clinical managers’ use of MAI on strategic

and operational levels in this study is operationalised as management control

practice.

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