£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, according to a new report from The King’s Fund.
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. Our analysis found 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. A forthcoming report from The King’s Fund will outline what these alternative solutions might be’.
Notes to editors:
- Foundation trust and NHS trust mergers - 2010 to 2015 is published by The King's Fund on 24 September.
- The report reviewed published information on 20 mergers between 2010 and mid-2015, including the parties' business cases where available, and reports from regulators, special administrators and the competition authorities. It also drew on interviews with a small number of senior system leaders from NHS England, the Department of Health, Monitor and the NHS Trust Development Authority.
- We collated the limited publicly available data on the financing packages for the 20 mergers in the sample; we were able to gain information on the overall packages for 12 of the mergers and more detailed information on the packages for 9 of them.
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- The King's Fund is an independent charity working to improve health and health care in England. We help to shape policy and practice through research and analysis; develop individuals, teams and organisations; promote understanding of the health and social care system; and bring people together to learn, share knowledge and debate. Our vision is that the best possible care is available to all.