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NHS mergers not the answer for hospitals in difficulty, King’s Fund report concludes

There’s a lack of evidence that trust mergers lead to more sustainable organisations, an analysis says.

A report by the King’s Fund suggests £2 billion has been spent on 12 hospital mergers over the past five years despite growing evidence that NHS mergers do not resolve the difficulties they are intended to address.

The report reviewed 20 mergers of NHS trusts and foundation trusts between 2010 and 2015.

The vast majority of these mergers were initiated by national regulators or special administrators, with the aim of helping NHS trusts to become foundation trusts or rescuing them from financial difficulty.

The report finds that:

-in many cases, there was no clear rationale for merger, with serious weaknesses in the assessment of alternative options and the articulation of the case for merger

-mergers are pursued despite growing evidence that they do not deliver the intended benefits, with little recognition of the disadvantages of creating larger, more complex organisations and despite evidence that they often act as a barrier to delivering service changes

-the merger process is complex, time-consuming and costly, with as many as 10 separate bodies involved and some organisations taking four or five years to complete the process.

The report found that the bulk of allocated funding was spent on writing down historic debts, covering deficits and capital investment, rather than on delivering the service changes needed to make the merged organisations sustainable.

This suggests that mergers are unlikely to address the causes of the organisations’ difficulties and are pursued as a way of secure financing that would otherwise not be available.

While the report foresees a continuing role for mergers in the NHS, it calls on NHS leaders to rule out mergers as a route for NHS trusts to gain foundation trust status or as a response to financial failure.

Instead, alternative strategies should be developed that address the underlying problems faced by struggling hospital trusts, based on organisations working together in local systems of care.

Ben Collins, Project Director at The King’s Fund and author of the report, said: “NHS leaders are betting the farm on time-consuming, costly and risky mergers, despite a lack of evidence that they lead to more sustainable organisations. Recent NHS history is scattered with the remains of failed, or at least profoundly troubled, mergers.

“The £2 billion spent on 12 hospital mergers over the past five years contrasts with just £200 million so far made available to support the new models of care being rolled out across the country under the plans in the  NHS five year forward view.

“Instead of promoting mergers, NHS leaders should focus on developing alternative solutions that address the underlying causes of the problems facing struggling hospitals.”

Paul Healy, Senior Economic Advisor, NHS Confederation said: “NHS leaders now rarely select mergers as their preferred choice because our members are becoming increasingly aware of the challenges it presents. It would be short-sighted, though, to rule out mergers altogether because the decision on how best to deliver care needs to be made locally. It should be based on the needs of the local population using an informed analysis of the benefits and risks.

“Only through this permissive approach will NHS leaders be able to work together to decide how best to deliver services to patients.”

Read the full report.

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