Merging failing hospitals with other failing hospitals is a recipe for disaster. Instead, the government should encourage takeovers by successful foundation trusts or private companies
It is no secret that over the next few years the increase in demand for NHS services will not be met by a similar increase in resources. Unless we can significantly increase the health care outcomes for the same resource, the NHS will run out of money. This is why we need to improve the value for money provided by our hospitals.
The traditional offer that NHS hospitals have made to the public can no longer be sustained. For over 60 years we have been led to believe that every hospital can provide us with every service all of the time. If this was ever true, improvements in modern medicine has now made that an impossible promise.
Financial pressures are already making a number of hospitals unsustainable. In June 2012, the Department of Health said that 21 NHS hospitals are ‘clinically and financially unsustainable’ and will need restructuring.
There is now a coalition of much of the medical profession, the leadership of the NHS and most national patient groups who argue for radical restructuring of hospital services.
There are, of course, conservatives of the political right and the left who will try and stop this restructuring from taking place but the size of the problem now means this complacency cannot solve the problem.
Traditionally this problem has been ducked by merging failing hospitals with each other. Earlier this year a survey of NHS hospitals commissioned by the Health Service Journal found that 75% of them are considering or are actively involved in mergers and acquisitions.
Developing mergers between unsuccessful NHS hospitals because you cannot find anything else to do with them is not going to suddenly make mergers a successful method of improving failing hospitals. Simply bringing together one failing hospital with another generally creates a larger failing hospital
As in other services it is possible to develop a better hospital from the core of a failing one, but this will only be achieved by a profound and systemic change to the structure and the services of the hospital.
The surest way of achieving this, is not a merger of equals, but the takeover by a very successful hospital of the failing hospital. We know that takeovers only work when the acquiring organisation changes the business model and the working practices of the staff.
There are two sources of expertise that could take over failing hospitals.
First, there are some successful NHS foundation trust hospitals that have the experience and the capacity to carry out the necessary radical changes.
Second, there is a growing expertise in the private sector in turning hospitals round. This year, Circle became the first private company to take over the management of Hinchingbrooke, a failing NHS hospital in Cambridgeshire.
However, neither of these groups of institutions is compelled to take over failure. They will only do so if there are the correct incentives. At the moment the government is financially subsidising failing institutions. Some of this resource could be spent on assisting successful takeovers.
We may end up with chains of hospitals run by the best NHS foundation trusts and private companies that could develop centres of clinical excellence with strong brands. They would cut costs and improve the quality of the care delivered to patients, spreading best practice and achieving economies of scale.
Sooner or later, the government is going to have to acknowledge both the clinical and economic case for radical change amongst NHS hospitals. The sooner it does so, the easier for local change to be pursued with a prospect of success.
Paul Corrigan is Adjunct Professor of Public Health at the Chinese University of Hong Kong and Adjunct Professor of Health Policy at Imperial College London. He was formerly senior health policy adviser to Tony Blair when he was prime minister and is the co-author of Takeover: Tackling failing NHS hospitals published today by Reform