Publicness in times of market accountability: Lessons from a changing hospital industry in Germany
| Author | Ingo Bode |
| Published date | 01 January 2019 |
| Date | 01 January 2019 |
| DOI | http://doi.org/10.1177/0952076717692025 |
| Subject Matter | Articles |
Public Policy and Administration
2019, Vol. 34(1) 3–21
! The Author(s) 2017
Publicness in times of
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DOI: 10.1177/0952076717692025
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Lessons from a
changing hospital
industry in Germany
Ingo Bode
Faculty of Human Sciences, Department of Social Policy, Law and
Sociology, University of Kassel, Kassel, Germany
Abstract
Drawing on findings from a multiple case study on the changing hospital industry in
Germany, this article sheds fresh light on the implications new public management-
driven regulatory frameworks may have regarding the ‘publicness’ of public service
settings. It is shown that, in the area under study, key ingredients of the settings’ trad-
itional mission persist, as do expectations towards soci(et)al effectiveness of actual
service delivery. However, this is paralleled by the rise of market accountability
within and around these settings which undergirds the ‘privateness’ of public-service
providing undertakings. Hydrid accountability relations coincide with a new organisa-
tional settlement which leads to a fuzzy configuration regarding the role of publicness.
This is why a consistent reinvention of the latter is unlikely to occur under a regulatory
framework featuring non-statutory and competitive public service provision.
Keywords
Accountability, administrative organisation, hospital industry, professionalism/profes-
sions, regulation
Introduction
The dynamic nature of public-service providing organisations has become an
important theme for scholars engaged with the ‘publicness’ of these undertakings,
that is (in short), with the latter’s commitment to goals defined by the general
citizenry (Alford, 2016; Anderson, 2012; Bozeman, 1987; Rauh, 2015; Thoenig,
2006). In the related debate, a key issue has been the boundaries between the
Corresponding author:
Ingo Bode, University of Kassel, Arnold-Bode-Str. 10, Kassel 34109, Germany.
Email: ibode@uni-kassel.de
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Public Policy and Administration 34(1)
public sector and its environment, extending to reflections about the role of private
and nonprofit undertakings involved in public service provision. In previous times,
scholars tended to make strong distinctions, arguing that structural characteristics
made public-service providing undertakings function in a particular way, including
when it comes to relations with stakeholders. With wide-reaching regulatory
change across various areas of public service provision, more recent contributions
have cast doubts on this assertion. Some scholars claim that the aforementioned
distinctions have disappeared altogether where different public-service providing
undertakings abide by the same regulation. Others imply that regulatory change
has brought about hybrid configurations to these undertakings in which traditional
characteristics mingle with elements adopted from private business (Christensen and
Lægreid, 2011; Lægreid, 2014). This is deemed a result of ‘New Public Management’
(NPM) that, while maintaining political objectives for the common weal, has made
these providers comply with what purchasers, empowered consumers, competitors
and regulators applying benchmark-based performance schemes prompt in terms of
organisational behaviour. All this seems to imply growing privateness within the
affected organisations, along with new management models at work place level
(Krotel and Villadsen, 2016).
But, what is the ‘fate’ of publicness under these conditions? The literature deal-
ing with this question appears inconclusive (Arrelano-Gault et al., 2013: 154).
From early on, critics have warned against ‘quasi-market failure’ (Lowery,
1998); mission drift due to the adoption of ‘techniques of business administration’
(Denhardt and Denhardt, 2000: 551); and, transforming public sector activities into
mere ‘costumer service’ (Jos and Tomkins, 2009: 1078). However, a widespread
impression has been that taking the business rationale on board would not neces-
sarily impede providers from delivering according to public expectations towards
effective services, the delivery of merit goods, or equitable performance. Assumed
levers for this are the vocations of employees (Hall et al., 2016); the make-up of
policy environments (Miller and Moulton, 2014); or sophisticated forms of statu-
tory governance, e.g. concerning quality control in quasi-markets (Enthoven, 2012;
Le Grand, 2003). Even in a ‘privatized world’, it is assumed, publicness can be
‘reinvented’ (Hamelin and Spenlehauer, 2014).
Drawing on evidence from the German hospital industry, this article argues that
to examine this contention, regulatory environments and their implications for the
affected organisational settlement must be taken into account. If these environ-
ments confront providers with ‘market accountability’ (Borowiak, 2011: 134–148;
Garn, 2001), publicness becomes fuzzy and its full ‘reinvention’ is unlikely to occur.
It may persist as a reference point, yet it is challenged permanently at organisa-
tional level. Regarding the destiny of publicness in hybrid configurations, the hos-
pital industry in Germany is a good test case as, in this country, public services are
not provided by a unitary statutory institution (such as the British NHS), but by
organisations with various legal forms. Besides shedding light on this national
configuration to which the international literature has hitherto paid scant attention
(though see Klenk and Pieper, 2013; Mattei, 2016), the article contributes to this
Bode
5
literature by scrutinizing implications of the NPM-driven reorientation of public
service settings through the aforementioned conceptual lens (publicness versus
privateness).
The first section reviews basic strands of theory around publicness and
accountability in public service settings; elaborating on both privateness and
market accountability in the evolving context of public service provision, it
delineates the conceptual grid used for the subsequent analysis. This analysis,
based on evidence from both hospitals and intermediary organisations involved
in the governance of the German hospital industry, is summarized in the second
section that also depicts the methodology underlying this research. In the con-
clusion, the findings are discussed with an eye on general lessons to be drawn
from the case.
Publicness, market accountability and the organisational
settlement of inpatient care
In the wider literature dealing with ‘publicness’ as a characteristic of public-service
providing organisations, there seems to be a general agreement that the former
materializes in the latter’s attachment to societal goals and related political account-
ability, as well as in practices expressing such attachment regardless of micro-
economic concerns. This implies that, in areas such as public transport, regional
development, or human service provision, the respective organisations ‘align
administrative efficiency and legitimate action towards desired societal outcomes’
(Arrelano-Gault, et al., 2013: 156). However, whereas some scholars tend to
assume that providers with characteristics typical of private business will have
difficulties in accomplishing such practices (see Evans, 2013), others stress that
ownership does no longer connect with the type of service provided in a context
of directive forms of statutory governance being on the retreat (Aulich, 2011;
Kimberly and Campbell, 2011). It is argued that even if not being part of the
state (but of the voluntary or private business sector), providers may offer public
service ‘practices’ due to a given level of ‘environmental publicness’ (Miller and
Moulton, 2014: 554), that is, collective stakeholders endorsing these practices, e.g.
by special funding and control schemes. In this vein, it is also put forward that,
throughout contemporary welfare states, any kind of organisation, whether public
or private, exhibits mixed characteristics, with some related to norms set by polit-
ical authorities and others independent from these norms, e.g. commitments to its
financial health (Bozeman, 1987; Johnsson and Dobni, 2016).
Concerning major driving forces behind publicness to persist under such condi-
tions, not only a given policy environment but also vocations of providers
and sophisticated forms of statutory governance (quality inspection, etc.) are con-
sidered to preserve this orientation in times when the latter is no longer corrobo-
rated by a strong unitary public sector. Soci(et)al effectiveness, so the argument
goes, can remain an imperative norm here, with goals related to social integration
and agreed in the wider society. Thus, in fields where a ‘public service ethos’
6
Public Policy and Administration 34(1)
(Brereton and Temple, 1999, emphasis added by authors) is cultivated, the involved
agents may espouse distinctive normative orientations (Moulton, 2009), for
instance concerning the rights of users or principles of equitable service delivery.
Their goals may conform to a certain mission (Wright and Pandey, 2011), with
‘organisational reputation’ following from the respect of that mission (Waeraas
and Maor, 2015). It is assumed that even with commercial provision, expectations
to deliver public value to the collective citizenry can be ‘mediated through the
political process’ and then entail commitments that go beyond mere ‘instrumental
efficiency’ (Alford, 2016: 680).
However, an organisation’s ability of bringing its publicness to bear depends on
its wider regulatory environment, more...
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