'It is likely that the teaching hospital group will segment into different roles'

Most of my managerial career has been in London teaching hospitals, with the exception of seven happy years as chief executive of what is now Peterborough and Stamford Hospitals foundation trust.

A striking memory from that period was watching the neck and shoulder muscles tighten on mention of Addenbrooke's. While there may on occasion have been justification, the response was almost intuitive.

It took me back to similar responses by staff at St James's Hospital, Balham to initiatives from St George's Hospital in the years before the former came on to the latter's site. I thought it the bickering of neighbours until it dawned on me that in the minds of clinicians and managers in district general hospitals, those in the big teaching hospitals are thought arrogant, acquisitive and uncommunicative; and they have lots of money and we should have some of that.

In teaching hospital land it feels somewhat different. At King's College Hospital we have our own brand of paranoia. Time to conduct a defence.

Let's start with money and services. The tariffs, understandably, are constructed, among other things, on the basis of recognised treatments. They struggle to make allowance for innovation. Yet in teaching hospitals around the UK innovations are the stuff of life.

Some are well known because of the size of the population treated, such as the drug-eluting stents used by cardiologists. Others are less common, for example the micro-engineered coils used by neuroradiologists for brain haemorrhage. Others are just coming through at King's, for instance a stroke-avoiding intervention for patients with atrial fibrillation.

What they all have in common is cost. Innovation does not come without a price. Teaching hospitals plan and manage accordingly. Can we extend the deal with drug or equipment suppliers? Can we understand our costs sufficiently to create surplus to finance innovation? How quickly can we get tariff adjustment or an off-tariff arrangement?

Meanwhile, much as I have complete confidence in my neurosurgeon colleagues, I would prefer treatment for a bleeding brain without the need for my skull to be opened up. Needless to say the teaching hospitals as a group, led by chief executive Jane Collins at Great Ormond Street, are engaging the Department of Health to get more recognition for the financial consequences of experimentation and innovation.

Given the push on experimental medicine and the plethora of new treatments likely to emerge, this is very important.

What about all that money teaching hospitals get for research and education? Well 2006-07 was an interesting year for that. The NHS research money is subject to the transitional arrangements for the implementation of Best Research for Best Health.

So it's starting to come out of its historical homes to be reallocated to centres, programmes and networks. Even if it does sometime go back to those same homes, there are financial gaps to be managed.

The treatment of the education monies for 2006-07 came as more of a surprise. These were reduced unexpectedly by letter last August. I'm not commenting on the reasoning but I can tell you many teaching hospitals scrambled to identify how cash (in our case just under£3m) could be taken out for the second half of the year.

Moreover, my spies suggest the cash supported the cost of writing off historical debts when the resource allocation budgeting system was rescinded. But perhaps that's just a rumour.

Meanwhile, there's a lot of talk of acute service reconfiguration. This will need support from the major centres at their end of networks as much as from primary care at the chronic and urgent care end.

I hear much from teaching hospital colleagues about their role in the changes to DGHs around them. And much of this is clinically rather than organisationally driven. So vascular surgery and myocardial infarction and stroke management are gravitating to the major centres with the 24/7 infrastructures.

While we accept this we are also beginning to consider how we can move elements of tertiary care out to other hospitals, thereby improving patient access and changing the character of local sites in the long-term. We need to work with commissioner and DGH colleagues to get it right.

I think as a model it will use the resources of the teaching hospitals to get the bits of acute care into the right place. And yes, that should be compatible with choice.

It is becoming clear that the teaching hospital is a strong and indispensable part of UK plc. That's been a strong theme of Best Research for Best Health. But it is becoming equally clear that we must change to take that to the next stage.

In a global context most of us are too small to make a big enough offer to industrial and research partners, to the best academics and clinicians, and to financial backers. Hence the new language of academic health sciences centres and the proposals for mergers or new alliances.

Not all of us will be in that race. It is likely the teaching hospital group will segment into different roles. A near neighbour is already focusing its academic strategy on education models. It's not hard to imagine the soul-searching within hospitals and their academic partners about the implications of the new environment.

I'm not blind to the tendency to arrogance of some who work in the teaching hospitals. I've been on the receiving end of it. But the confident exterior and sound-bite tendency of some chiefs, clinicians and academics can be misleading. They have plenty to worry about. It's not an easy time for acute services just now, though it probably never was.

Malcolm Lowe-Lauri is chief executive of King's College Hospital foundation trust, London.