The Health Service Journal recently reported that around 50 NHS trusts are unlikely to become foundation trusts in their own right, and are actively exploring alternatives. These include merging with an existing foundation trust and being run by a private company under a franchise arrangement, following the example of Circle taking over the management of Hinchingbrooke Hospital. The services provided by NHS trusts that go down these routes are likely to come under review as their new leaders consider changes in which care is delivered to ensure clinical and financial sustainability.
Foundation trusts are also undergoing change. The proposed merger of Bournemouth and Poole NHS foundation trusts, now being reviewed by the Competition Commission, is the best known example. Another is the possible merger of three foundation trusts in south London – Guy’s and St Thomas’, King’s College hospital, and South London and Maudsley – which would create by far and away the biggest NHS provider in England if it goes ahead. In both cases, organisational integration would lead to the relocation of some services with the aim of delivering improvements in care for patients.
The challenge faced by many smaller NHS trusts in ensuring their sustainability, alongside plans to merge foundation trusts in some areas, points to a future in which the provider landscape will be populated by fewer, larger organisations. It also seems likely that providers will seek opportunities to collaborate, as has started to happen in London in academic health sciences partnerships. Recent proposals to change where cancer and cardiac services are provided in north London, developed through UCL Partners, is a sign of things to come.
Assuming this happens – and the market regulators will have a significant role to play in determining whether it should – clinical commissioning groups (CCGs) will face a challenge in exerting leverage over larger and more powerful providers. In these circumstances, it is likely that CCGs will themselves need to collaborate both with each other and with the NHS Commissioning Board (now known as NHS England) to be able to negotiate on equal terms with providers. Consolidation among both suppliers and purchasers is a familiar feature in other markets and there is no reason to expect health care to be different.
Successful providers may also seek to extend their reach through strategic alliances via academic health sciences networks and by partnering with private sector and third sector organisations. The Fund is currently working with the Foundation Trust Network and ACEVO to explore some of these issues. Handled well, provider alliances and networks may offer greater benefits than organisational mergers in view of evidence on the disappointing impact of mergers, as seen in research by Naomi Fulop et al for the British Medical Journal.
More speculatively, providers may wish to establish a presence beyond their home base, building on the initiative taken by Moorfields Eye Hospital NHS Foundation Trust to set up specialist eye clinics at various hospitals in and around London. Although health care is inherently a local service, it is not too far-fetched to imagine an elite group of foundation trusts seeking to establish provider chains with distinctive brands. Other foundation trusts may decide this is too risky a route to take and focus instead on becoming the hub of fully integrated services in their area with much stronger links with a range of other NHS providers.
At a time of rapid and uncertain organisational evolution, the implications of all these possibilities for services and quality of care need to be kept firmly in mind. Will a more mixed economy of care deliver benefits for patients or result in greater fragmentation? Will provider consolidation and collaboration improve outcomes or create inefficient and unresponsive monopolies? And how will those charged with commissioning and regulating health care use their leverage to avoid provider dominance and to protect the interests of patients and the public?
The impact of the NHS reforms on patients will be shaped largely by the changing provider landscape and the ever increasing financial and service pressures providers are under. It will require leadership of the highest order to manage further organisational change, ensure that the quality of care is kept centre stage, and balance budgets. The NHS in 2013 is no place for the faint hearted.
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