Finance and funding
It may not surprise you to know that The King’s Fund has long had an interest in how the health and care system is financed and funded. But this interest has, like many of the Fund’s areas of work, changed and evolved over time.
From the turn of the 20th century, the Fund was concerned with ‘economy and efficiency’ in London’s hospitals. Small hospitals were inefficient, the Fund argued in a 1903 report, and should be amalgamated to create larger institutions.
This focus on ‘economy and efficiency’ became an important strand within the Fund’s work. Three years later in 1906, the Fund published The uniform system of hospital accounts and statistics, an important piece of work that brought together representatives from across London’s hospitals to agree a shared approach to recording income and expenditure. By standardising how this information was recorded, accurate comparisons could be made between expenditure across different hospitals. This system of accounts also provided a fascinating insight into the minutiae of life in London’s hospitals, from the number of beds available for use throughout the year, to detailed records of expenditure on ‘materials and sundries’ such as soap, brooms and even clogs. By the 1920s, the system was in use in hospitals across the country.
In the 1950s, the Fund continued this work by beginning an investigation to see if costing systems could help with the management of hospital expenditure. Indeed, no area of hospital spending remained unexamined, as the publication of a 1954 pamphlet on the financial management of hospital catering departments highlighted. The Fund’s Division of Hospital Facilities also investigated the amount of money it cost for hospitals to deliver common surgical procedures and treat key illnesses and diseases.
Another key area of the Fund’s work was providing grants and funding to health and care services. In the early 1920s, with a crisis in hospital finance looming, the Fund took a leading role in supporting London’s hospitals to close the gap between their income and expenditure. The Fund ran an appeal to raise money for struggling hospitals, including a ‘save your hospitals’ poster competition. It also provided advice and guidance to the Voluntary Hospitals Commission in the distribution of temporary government grants to institutions, as well as promoting methods to increase hospital income and reduce spending.
Supporting the funding of health and care services remained an important part of the Fund’s work throughout the 20th century. In 1930 the Fund made major grants towards the rebuilding of the Middlesex hospital and continued to make grants annually to more than 200 hospitals and convalescent homes. In the 1950s, the Fund gave out tens of thousands of pounds in grant money to hospitals and other health-related organisations, from donating £100,000 towards a community centre at Warlington Park Hospital, to providing grants to the Royal Marsden to finance developments in radio-activity in their hospital labs. By 1977, one fifth of the Fund’s income had been set aside for grant making.
Alongside the Fund’s charitable activities, helping people in the health and care system make sense of finance and funding has also been a continuing part of its work. In 1934 the Fund published a report entitled, Why a modern hospital costs so much. The report outlined the latest developments in modern medicine, from the use of x-rays to the developments in plastic surgery made during the war, and traced the link between these medical advancements and the corresponding increase in hospital expenditure, highlighting the significant additional costs associated with the installation and upkeep of modern hospital equipment.
Helping people understand health and care finance and funding has continued to be an important part of The King’s Fund’s work to this day. From data visualisations showing how the NHS budget has changed over time, to reports on financial debts and loans, and blogs on local government funding, the Fund continues to make sense of the complex financial picture within the health and care system. And while the Fund no longer offers grants to health and care services, the GSK IMPACT Awards and Healthy Communities Together programme, has continued the Fund’s long tradition of providing funding and leadership support to those organisations that play a vital role in delivering essential health and care services.
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