A little more than five years ago, South London NHS Healthcare Trust was broken up – in part because it was too big and unwieldy; the merger of two trusts in Bournemouth and Poole was blocked on competition grounds; and Monitor published a report on small hospitals that raised doubts about economies of scale in health care. But times, or at least health care strategy, seem to be changing.
The proposed merger of Guy’s and St Thomas’ NHS Foundation Trust and the Royal Brompton and Harefield NHS Foundation Trust will create a genuine super-trust. The new organisation will employ more than 21,000 staff with an annual turnover slightly more than £2 billion – higher than any other trust in England (Figure 1). But this new super-trust will not be alone.
The number of providers, commissioners and national bodies has been whittled away over the past decade, creating larger and larger organisations. Over this time, the NHS has moved from 250 provider trusts to fewer than 220 (with Bournemouth and Poole merger plans back on the front burner). After an informal ban on mergers in the initial years after the Health and Social Care Act, the number of clinical commissioning groups has reduced from 213 to 135, with many more mergers planned. And the NHS Commissioning Board, Monitor and Trust Development Authority (and many other bodies besides) are slowly consolidating into a single national organisation in NHS England and NHS Improvement. As one NHS chief executive memorably noted, the NHS landscape is becoming more of a portrait.
The desire to have fewer organisations in the NHS is not remarkable in itself. It reflects beliefs that larger organisations can deliver greater efficiency through economies of scale; that talented leadership and good clinical practice can be franchised across a wider range of services and geographies; that transaction costs will fall because there would be fewer moving pieces in the health and care system; and an underlying sense – often flying in the face of evidence and experience – that ‘bigger is just better’.
What is more remarkable perhaps, is the sheer scale and complexity of some of the new organisations taking shape.
'Because of this rising complexity, everything from lung transplants to a flu vaccination can sit under the aegis of a single NHS board.'
Ten years ago, providers were ‘complex’ if they offered hospital, specialist and community services. Now, acute hospitals and mental health and community providers have merged in Cumbria and Somerset; NHS organisations are providing adult social care services in Salford and Wirral; and several NHS hospitals are directly employing GPs and offering primary care services. Because of this rising complexity, everything from lung transplants to a flu vaccination can sit under the aegis of a single NHS board.
And the complexity extends to the ties that bind organisations together. Ten years ago, formal merger or acquisition – often supported by large slugs of financial support from the Department of Health and Social Care – was broadly the only game in town. Now, organisations can work more closely by establishing clinical networks, joining hospital groups or through sharing leadership teams. This latter approach has been most evident in London, where power-sharing arrangements mean a small number of chairs now oversee a substantial portion of the NHS’s total budget (Figure 2).
Having fewer and larger organisations in the NHS seems to be the zeitgeist, either as an implicit national strategy or a natural organic process. But, before accepting this as an inevitable trend, local and national leaders might want to ask themselves a few questions to check if the pursuit of larger scale is the right strategy for them and whether they have the operational processes in place to pull it off.
First, do leaders of growing trusts know what makes them good and how to spread it? Even the most rigorous adopters of quality improvement methods note how difficult it is to codify what makes high-performing organisations tick, and how to distinguish the impact of having effective replicable processes from having effective (though harder to replicate) individual leaders.
Second, do they know what this means for the leadership of their organisation? The new structures that are emerging are already creating new tiers of ‘group-level’ executives that run organisations, and ‘managing director teams’ who run individual sites. And for the moment it is unclear what this means for the career paths and training needs of future NHS leaders.
Third, how will these new organisational forms change the approach of national bodies? For example, the desire to maintain separate Care Quality Commission or NHS Improvement regulatory ratings might be enough to persuade the board of a high-performing trust to shun merger and pursue more informal collaboration with a challenged neighbour. And it is unclear whether ever-larger provider organisations will counterbalance or overpower commissioners in emerging integrated care systems.
'But in health care, we seem to conflate size with success, we can underestimate the disruption these structural changes have on staff...'
Large organisations are not inherently bad and a few NHS organisations that are huge by domestic and European standards have demonstrated strong clinical and financial performance in recent years. But in health care, we seem to conflate size with success, we can underestimate the disruption these structural changes have on staff, and we are strikingly poor at spotting a good collaboration from a bad one in advance. For these reasons, the quest for the next super-trust should perhaps be taken with more caution than abandon.