NHS merger decisions: what's the evidence?

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On 15 December 2011, NHS London approved the full business case for the merger of Barts and the London NHS Trust (BLT), Newham University Hospital NHS Trust (NUHT) and Whipps Cross University Hospital NHS Trust (WCUHT).

On the same day, the Co-operation and Competition Panel (CCP) published its review of the proposed merger and concluded that 'the merger is inconsistent with Principle 10 of the Principles and Rules, that is Mergers, including vertical integration, between providers are permissible when there remains sufficient choice and competition or where they are otherwise in patients' and taxpayers' interests, for example because they will deliver significant improvements in the quality of care.'

An instinctive response to the proposal is that it would create a huge and unwieldy organisation that would be hard to govern; there are many examples of mergers failing to deliver the benefits anticipated.

The CCP is particularly concerned that the merger would reduce competition and choice for patients receiving elective and non-elective care in Newham. Their case rests on an assertion that choice and competition will deliver a wide range of benefits, including improvements in quality and safety, population health, and value for money. Yet we know that many of these assertions are contested, as discussed in a recent article by Gwyn Bevan in the British Medical Journal (subscription needed), and the CCP has not articulated or quantified how retaining the current level of choice and competition will benefit the patients of Newham.

On the other hand, the CCP expect precise quantification from trusts of who will benefit from mergers and how these benefits will be achieved. Time and again in their assessment of the anticipated benefits the CCP say 'unfortunately the parties did not provide any detail... Accordingly we cannot take it into consideration in our assessment.'

Is a stronger supporting evidence base from the trusts all that is needed? As I have pointed out in our briefing on reconfiguring hospital services, one of the problems with optimising service configuration is the lack of hard evidence, particularly around clinical benefits.

The business case produced by the three trusts argues that merger will not only deliver financial and clinical benefits for the population of north east London but that, without merger, either NUHT or WCUHT – or both – would be placed in the failure regime. Where does this leave the 20 trusts in the foundation trust pipeline, not viable in their current form, of whom a significant proportion are in London? As we said in our recent report on London, solutions proposed include the merger of North West London hospitals with Ealing acute and community services, and of St George's with St Helier hospitals. Will their merger proposals also fail the CCP assessment? If the onus of proof lies with the trusts, they are likely to find it hard to challenge the CCP. Who is going to hold the CCP to account and ask them to meet the exacting standards of evidence that they apply to others? The final decision rests with the Secretary of State and he is likely to find himself between a rock and a hard place. Unless a way forward can be found for these non-viable trusts, the new failure regime may find itself in heavy use.

This blog is also featured on the Health Service Journal website (requires a subscription).


Ed Macalister-Smith

Comment date
23 December 2011
On the one hand, mergers often don't deliver promised benefits - plenty of them turn out worse than before rather than better, and certainly with lots of lengthy disruption. So there's every reason to challenge the logic of mergers, and to and make sure that there is a delivery plan behind the organisational merger that will create value.

On the other hand, what is the added value of the CCP advice (it's not mandatory to follow it, is it?)? If there was a "pure" market of health providers in place, then this kind of advice might be relevant. But there are very few people advocating such a truly free market. And (??) no countries that offer such a model, because of all the downside disadvantages. So in that context, why have a CCP at all? Does any other EU country have anything similar?

So as your piece comments, if the CCP advice doesn't offer a solution to the challenges of service configuration but only offers a partial (partisan) critique, what is its added value? And when does the CCP advise on the benefits of the other "C" in its title - co-operation?

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