1993 Health Care Hall of Fame: Graham Lee Davis

Editor's note: This profile was originally published in the Nov. 15, 1993, issue of Modern Healthcare

If not for Graham Lee Davis, American hospitals today might be having a more difficult time keeping their fiscal house in order.

To Mr. Davis, hospitals' books and numbers weren't just a passion; they were almost an obsession.

“He was a tireless, creative and effective worker, and accuracy was almost a fetish with him,” said a resolution passed by the Duke Endowment Fund board of directors shortly after Mr. Davis' death, from injuries he suffered in a car accident, on July 4, 1958, at the age of 65.

Mr. Davis was more than a cruncher of numbers. He modernized hospital financial management by propelling the profession into a field of its own.

“Graham Lee Davis was part of the roots of hospital management, coming up with literature on hospital accounting and management when there was none around,” said Robert Shelton, who became executive director of the Healthcare Financial Management Association in 1958 and held the post for 19 years. Mr. Davis helped found the organization.

Born the son of a country doctor on April 15, 1893, in Woodville, N.C., Mr. Davis earned degrees from Wake Forest College (now Wake Forest University), the University of North Carolina and George Washington University. A veteran of World War I, he served as a sergeant in the Infantry Air Corps from 1917 to 1921.

His first professional assignment was working for the Duke Endowment Fund, which provides money and support to not-for-profit hospitals in North Carolina and South Carolina, higher education, children's homes and the Methodist Church.

Mr. Davis worked in the endowment fund's New York office from 1924 to 1926, specializing in programs for children. In 1926, Mr. Davis moved south to hone his hospital management skills. Until 1940, he worked as an assistant to W.S. Rankin, M.D., in Duke's Charlotte office, where he was responsible for developing uniform accounting and statistical systems for hospitals and child-care facilities.

While with Duke, Mr. Davis also served as the first editor of Southern Hospitals magazine.

When Mr. Davis left Duke, he began to build a national reputation. At a conference in Indiana University in 1941, he helped lead the charge for national institutes to be set up for hospital accounting.

Mr. Davis organized and served on the committee that created a professional association for hospital accountants, known then as the American Association of Hospital Accountants. He served on the AAHA board from 1946 to 1948.

His leadership helped build what is today's 30,000-member HFMA.

Mr. Davis' legacy of mentoring is remembered most.

“He knew of the importance of accounting and financial management in hospitals as the payment of healthcare services moved from being contributions and patient payments to third-party billing such as Blue Cross,” said Richard Clarke, who has been HFMA's president since 1986.

Mr. Davis' contributions have made HFMA flourish, Messrs. Shelton and Clarke said.

“Most chapter members probably didn't know Graham Davis, but his name comes up a lot at chapter meetings,” Mr. Clarke said. “He was part of HFMA's foundation and getting it on a level footing.”

HFMA recognizes Mr. Davis' efforts each year through the Graham L. Davis Award for Chapter Achievement, established in 1953. “The fact that we're still around some 50 years later is a credit to Graham Lee Davis and his leadership,” Mr. Clarke said.

Other institutions have benefited from the insight of Mr. Davis as well.

His efforts with the W.K. Kellogg Foundation in Battle Creek, Mich., from 1940 to 1953 involved completing a study used to coordinate a health service plan for the nation. In 1951, Mr. Davis was named director of the Commission on Financing Hospital Care, which made a two-year study of hospital financing problems.

In the 1940s, he served on several important committees of the American Hospital Association, where he pulled no punches.

“We have in this nation a large number of very fine hospitals, but we also have a large number of low-grade institutions, some of which are an actual menace to the health of the communities in which they are located,” Mr. Davis was quoted as saying in the October 1947 issue of Modern Hospital, predecessor to Modern Healthcare.

His brutally honest style didn't make him unpopular with AHA members, who elected him president of the organization in 1947.

While at the AHA, he worked diligently to make sure hospital improved. From 1946 to 1949, he served as a member of the AHA's Federal Health Council, a national program under the federally funded Hill-Burton Act, which helped finance the construction of hospitals.

“If Senator Hill and Justice Burton are fathers of the present federal hospital law, Graham Davis is its grandfather,” Modern Healthcare said. “The law accurately reflects his opinions about the proper division of function between government and private enterprise, and he had at least as much to do with its shaping and ultimate passage as any other single person.”

In 1953, Mr. Davis returned to North Carolina to become a hospital consultant.

The activist always emphasized that hospital management problems should be kept in perspective.

“The hospital is only the approach; the object is good medical service,” he was fond of saying.