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HOSPITAL ACCOUNTS.
220 formations and exchanges are set going, causing a constant minute variation of temperature at the body surface. Whether or no this is a correct theory of its mode of action, the clinical facts regarding this bath remain the same. Careful observation during a long course of years at the Bohemian :and other spas has established the value of the peat bath as a ’, -safe and powerful mode of thermal treatment. It is recom- ’, mended more particularly in the slighter forms of spinal paralysis with motor or sensory disorder, and for promoting <.the absorption of exudations in the neighbourhood of joints and elsewhere. At Strathpeffer these baths have also been used with encouraging results in chronic skin affections (eczema and psoriasis) with thickening and exudation ; in simple inactivity of the skin, with a chaonically dry and sometimes cold -surface ; in sluggish circulation and cold extremities (a condition frequently combined with inactive skin), and in painful affections of muscles and nerves. In cases of depressed peripheral circulation patients will sometimes report, after - even a single peat bath, that they feel a glow of warmth over the body to which they have been unaccustomed for years. Again, in neurotic subjects suffering from what is frequently °termed " spinal irritation," with pains in the limbs, sensations of heat along the spine, posterior headache and other distresses, the peat bath is distinctly more beneficial than other forms of thermal treatment. It relieves the pains and other morbid sensations, promotes free perspiration and inoduces a state of calm and disposition to sleep strikingly in - contrast with the excitement and restlessness sometimes ’
HOSPITAL ACCOUNTS. [SECOND ARTICLE.] IN our article last week upon this subject we passed in treview one part of the schedule which has been prepared for use by the hospitals and showed how the statement of income might be rendered more perspicuous than it is in this form. The statement of expenditure wethen reserved for subsequent "criticism and to that we now turn. The principles by which we propose to test it have been already stated, but it may be - convenient to restate them here. They are four-that is to - say, the statement must clearly show (1) how much is -annually expended on the work of the institution ; (2) ’how that expenditure is distributed among the various "departments ; (3) what is the amount of the income available to meet the expenditure ; and (4) from what sources that income is derived. The third and fourth of these heads have been already considered in connexion with the statement of income. The first two have now to be applied to the other (expenditure) side of the account. As to the first no difficulty arises. The importance of showing the total amount of the expenditure has been fully appreciated not only by the committee which prepared the form now under discussion, but by most other people who have taken in hand the preparation of a financial statement and hence the aggregate expenditure can very commonly be found in any of these accounts and ’would always be shown by a statement prepared upon The second the lines of the Mansion House form. rule is recognised to some extent, and it is upon this point The Accounts that discussion must be chiefly directed. Committee has prescribed a subdivision of the expenditure into two large groups of items : the one is called " ordinary expenditure," and covers all that is laid out upon managing the institution and maintaining its work; the other, "extraordinary" expenditure, and includes such items as building for the purpose of extension, the making of permanent improvements and the acquisition of investments for capital. To put it in a word, the "ordinary expenditure’’ represents expenditure pure and simple; that is to say, expenditure of the resources of the institution, whereas
I
"
extraordinary expenditure is expenditure only in name represents no expenditure of resources, but on the
and
contrary their accumulation. Such a distinction is indispensable to the production of a statement that shall not be absolutely misleading. By summing together without distinction the money expended and the money invested, it is possible to make the most thriving institution appear to be involved in financial difficulties. Attention has been recently and publicly called to instances of this particular kind of misrepresentation-instances in which hospitals that have added largely to their investments in a given year have published statements in which the expenditure is shown to be in excess of income. The general adoption of the Council’s form would correct this fault, and although the desire to make an effective appeal to the charitable public may in some instances militate against the ready acceptance of a form of statement which is transparently clear, we are satisfied that upon the whole the hospitals would gain more from increased public interest and confidence than they would
lose from the moderation of their demands. This, however, is only a first step towards the elucidation of the expenditure account. A second step is taken by the subdivision of ordinary expenditure under the two heads of maintenance and administration, a division which corresponds roughly to what may be described as the expenditure upon the effective and the non-effective forces of the institution respectively. Thus "maintenance" covers the expenditure on food, drugs, rent, taxes and medical and nursing and domestic services ; whereas administration covers the cost of the secretary’s and collector’s offices, advertisements and such-like outlay which does not directly supply the patients’ needs. Here there is a manifest intention to apply a criterion of economy to the accounts of the institution, and the only question which can arise is whether the criterion is a satisfactory one, having regard to all the circumstances of the case. Our reason for thinking it unsatisfactory is that expenditure on "administration" as above defined, though one of those branches of outlay which are most apt to grow to excess, is not by any means the only one out of which extravagance can arise. It is as possible to have excessive expenditure upon the professional staff as upon the secretarial and equally possible again to pay too much for house-rent or provisions. This is to some extent recognised in the form under discussion, inasmuch as the maintenance charges are divided up under various heads representing various departments of hospital work. But at this point the scheme breaks down altogether and the distribution of the items, instead of elucidating, serves only to confuse the statement. Thus we have the full amount of the butcher’s bill carried to an entry under the subhead of "Provisions,"but no intimation is conveyed in what proportions the supply of butcher’s meat is appropriated to the patients and to the officers by wav of allowances. It may be better economy to pay liberal salaries without allowances than small salaries with them ; and a statement which affords no indication of the extent to which professional services are requited by payment in kind supplies absolutely no basis of comparison between different institutions. It seems to us that the object of this final subdivision should be that of securing a clear statement of the whole cost of every several department of hospital work, whether that cost is defrayed in money or in money’s worth, and that a statement of the expenditure upon salaries which is not supplemented by a corresponding statement as to the expenditure upon allowances is absolutely meaningless. This is a point which cannot be too strongly emphasised and we are therefore glad to be able to quote in this connexion the opinion of the House of Lords’ Committee. They confine their observation, it is true, to the one department.--na,mely, the out-patient department-which they consider the most important of all for this purpose and with reference to it they say (at page 97) : "In the evidence before the Committee mention was made of the difficulty of ascertaining the cost of an out-patient, without which calculation any estimate of the cost’per bed’ is unreliable. The Committee do not think the difficulties insurmountable." They then proceed to sketch a plan for effecting an analysis of the accounts with this object, which, extended to other the end that we have departments, would entirely advocated. We think, therefore,i hat there is every reason to believe that a perfectly satisfactory statement of hospital expenditure is possible, and we hope that when a form of account is ultimately adopted this important point will
accomplish
receive
adequate consideration.
HOSPITAL ACCOUNTS. [SECOND ARTICLE.] IN our article last week upon this subject we passed in treview one part of the schedule which has been prepared for use by the hospitals and showed how the statement of income might be rendered more perspicuous than it is in this form. The statement of expenditure wethen reserved for subsequent "criticism and to that we now turn. The principles by which we propose to test it have been already stated, but it may be - convenient to restate them here. They are four-that is to - say, the statement must clearly show (1) how much is -annually expended on the work of the institution ; (2) ’how that expenditure is distributed among the various "departments ; (3) what is the amount of the income available to meet the expenditure ; and (4) from what sources that income is derived. The third and fourth of these heads have been already considered in connexion with the statement of income. The first two have now to be applied to the other (expenditure) side of the account. As to the first no difficulty arises. The importance of showing the total amount of the expenditure has been fully appreciated not only by the committee which prepared the form now under discussion, but by most other people who have taken in hand the preparation of a financial statement and hence the aggregate expenditure can very commonly be found in any of these accounts and ’would always be shown by a statement prepared upon The second the lines of the Mansion House form. rule is recognised to some extent, and it is upon this point The Accounts that discussion must be chiefly directed. Committee has prescribed a subdivision of the expenditure into two large groups of items : the one is called " ordinary expenditure," and covers all that is laid out upon managing the institution and maintaining its work; the other, "extraordinary" expenditure, and includes such items as building for the purpose of extension, the making of permanent improvements and the acquisition of investments for capital. To put it in a word, the "ordinary expenditure’’ represents expenditure pure and simple; that is to say, expenditure of the resources of the institution, whereas
I
"
extraordinary expenditure is expenditure only in name represents no expenditure of resources, but on the
and
contrary their accumulation. Such a distinction is indispensable to the production of a statement that shall not be absolutely misleading. By summing together without distinction the money expended and the money invested, it is possible to make the most thriving institution appear to be involved in financial difficulties. Attention has been recently and publicly called to instances of this particular kind of misrepresentation-instances in which hospitals that have added largely to their investments in a given year have published statements in which the expenditure is shown to be in excess of income. The general adoption of the Council’s form would correct this fault, and although the desire to make an effective appeal to the charitable public may in some instances militate against the ready acceptance of a form of statement which is transparently clear, we are satisfied that upon the whole the hospitals would gain more from increased public interest and confidence than they would
lose from the moderation of their demands. This, however, is only a first step towards the elucidation of the expenditure account. A second step is taken by the subdivision of ordinary expenditure under the two heads of maintenance and administration, a division which corresponds roughly to what may be described as the expenditure upon the effective and the non-effective forces of the institution respectively. Thus "maintenance" covers the expenditure on food, drugs, rent, taxes and medical and nursing and domestic services ; whereas administration covers the cost of the secretary’s and collector’s offices, advertisements and such-like outlay which does not directly supply the patients’ needs. Here there is a manifest intention to apply a criterion of economy to the accounts of the institution, and the only question which can arise is whether the criterion is a satisfactory one, having regard to all the circumstances of the case. Our reason for thinking it unsatisfactory is that expenditure on "administration" as above defined, though one of those branches of outlay which are most apt to grow to excess, is not by any means the only one out of which extravagance can arise. It is as possible to have excessive expenditure upon the professional staff as upon the secretarial and equally possible again to pay too much for house-rent or provisions. This is to some extent recognised in the form under discussion, inasmuch as the maintenance charges are divided up under various heads representing various departments of hospital work. But at this point the scheme breaks down altogether and the distribution of the items, instead of elucidating, serves only to confuse the statement. Thus we have the full amount of the butcher’s bill carried to an entry under the subhead of "Provisions,"but no intimation is conveyed in what proportions the supply of butcher’s meat is appropriated to the patients and to the officers by wav of allowances. It may be better economy to pay liberal salaries without allowances than small salaries with them ; and a statement which affords no indication of the extent to which professional services are requited by payment in kind supplies absolutely no basis of comparison between different institutions. It seems to us that the object of this final subdivision should be that of securing a clear statement of the whole cost of every several department of hospital work, whether that cost is defrayed in money or in money’s worth, and that a statement of the expenditure upon salaries which is not supplemented by a corresponding statement as to the expenditure upon allowances is absolutely meaningless. This is a point which cannot be too strongly emphasised and we are therefore glad to be able to quote in this connexion the opinion of the House of Lords’ Committee. They confine their observation, it is true, to the one department.--na,mely, the out-patient department-which they consider the most important of all for this purpose and with reference to it they say (at page 97) : "In the evidence before the Committee mention was made of the difficulty of ascertaining the cost of an out-patient, without which calculation any estimate of the cost’per bed’ is unreliable. The Committee do not think the difficulties insurmountable." They then proceed to sketch a plan for effecting an analysis of the accounts with this object, which, extended to other the end that we have departments, would entirely advocated. We think, therefore,i hat there is every reason to believe that a perfectly satisfactory statement of hospital expenditure is possible, and we hope that when a form of account is ultimately adopted this important point will
accomplish
receive
adequate consideration.