Hospitals Under Pressure: Administrative Responses to Fiscal Restraint Between 1977 and 1984

Abstract

In this thesis, we examine the administrative responses by Ontario hospitals to fiscal restraint between 1977 and 1984. Using the conceptual 'model' of organizational change developed in James Thompson's Organizations in Action [1967], we predict that the most significant adaptations occurred in hospitals' administrative components, while "core" activities such as medical procedures remained relatively inflexible. More importantly, the observed changes in administrative tasks and activities can be accounted for by the role played by administrators in maintaining internal order and dealing with external contingencies. Accordingly, the greatest adaptations will be in how the administrative component assesses the performance cf "core" activities and communicates this to an external funding agency (i.e. Ministry of Health). We find that the empirical data collected is consistent with our predictions. As a result, we conclude that hospital adaptation during this time period was explicitly related to renewing the political conditions necessary for organizational growth. Moreover, we suggest that the organizational logic of fiscal restraint does not affect how hospitals perform medical activities, but rather, further entrenches this technology through the adoption of standardized funding formulae.