Who wants to live forever? Organizational decline in health care.

Abstract

We tend to look upon any attempt at managed decline of health care organizations with suspicion bordering on hostility. Researchers rarely theorize on the topic, administrators typically have little or no experience of handling decline processes, and citizens invariably oppose proposals for closure that are put forward, irrespective of their merits. All of which means that health care organizations have an unusually long projected shelf life and in many cases can expect to survive indefinitely. In a context of economic growth and increases in public spending, we might think this to be reasonable, and this certainly seems to be the tacit position of much scholarship in health policy and management. However, in the context of public sector retrenchment, the assumption of resource fecundity has come under challenge, as is evident for example in the English health care system where local leaders are increasingly considering options for service reduction and closure. This is new territory for many of those involved and not surprisingly has proven to be both demanding and frustrating, with much of the ‘low hanging fruit’ already picked and the rest proving stubbornly hard to reach. Although some savings have been achieved, these have yet to be of the magnitude required, and some basic questions remain unaddressed such as: What management strategies are likely to be most effective in leading downsizing or closure? What happens to the patients and staff implicated in such changes? And, how should the politics be handled? Re-reading the work of the public management academic, Charles Levine reminds us that this is not the first period of retrenchment and constraint in history. Writing in the US in the 1970s and 1980s, Levine posed the question: ‘Without growth, how do we manage our public organizations?’ He proclaimed the influence of political and economic conditions on management in public organizations and sought to examine these effects and their appropriate responses. His understanding of ‘organizational change toward lower levels of resource consumption and organizational activity’ was longitudinal and highly sensitive to context, thereby anticipating much subsequent scholarly development whilst remaining relevant and accessible to managers of the day. The richness and scope of Levine’s work was in large part due to his simultaneous application of the wide-angle lens (e.g. what are the lifecycles of public organizations?) and the microscope (e.g. what is the impact of decline on work habits, incentive structures and relationships of compliance and control?). Although Levine noted that is ‘nearly impossible to get elected officials, public managers, citizens or management theorists to confront cutback and decremental planning situations’, a more sustained exploration of this inertia can be found in the policy termination literature. The impediments identified in this work remain stubbornly in place and include: institutional permanence; ‘dynamic conservatism’; coalitions of opposition and legal/financial obstacles. Of more interest to Levine were the dynamics played out in situations where organizational decline is either proposed or enacted, and the management strategies available to those involved. Underpinning this interest was a belief that public administrators have a legitimate and active role to play, and that decline should not be left entirely to other parties to determine: managers, Levine argued, should play an integral role in shaping and leading responses to the prospect of organizational downsizing or closure. Levine underlined the importance of understanding the causes of organizational decline which he grouped into four categories. The most common of these he considered to be ‘problem depletion’ resulting from factors such as changes in demography or shifts in the way population needs are understood – neatly exemplified by changing health needs and the