Hi and welcome to the forum.
I don't know if this information is definitely applicable under the circumstances but found this on The Patient's Association website
"To access the records of someone who has died you need to apply under the Access to Medical Records Act, 1990. You will only be able to access the records if:
you are the next of kin or legal executor
you have the permission of the next of kin
you have written permission from the deceased person given before they died
You will need to state which records you want to access and if you are taking or intend to take legal action. The same charges apply as under the Data Protection Act."
Contact details are available
http://www.patients-association.org.uk/FAQ-Category/8
I know members of the forum have previously applied directly to the hospital concerned and sometimes been lucky enough to have been helped, however there may also be a 100 year confidentiality over them, similar to census records, so you may not be able to acquire records of that date.
I wonder if you have your grandfather's military records which might shed some light on why he was in the hospital.