30 NHS hospitals should be taken over

Published on Friday, 28 September 2012 10:25
Posted by Scott Buckler

The Government should drive the takeover of up to 30 NHS hospitals in this Parliament, according to a former health advisor to Tony Blair

In Takeover, published today by the independent think tank Reform, Professor Paul Corrigan argues the current favoured policy of mergers between failing NHS hospitals will not work. Instead he calls for private companies and the best NHS hospitals to take over troubled hospitals because that is the surest way to turn them around.

Looking at case studies and published research, the authors examine the body of evidence about why past mergers between NHS organisations have not worked. They say that forcing underperforming hospitals to merge with other underperforming hospitals also fails because it creates larger underperforming hospitals. They argue: "It is possible to develop a better hospital from the core of a failing one, but this will only be achieved by a profound and systemic change to the structure of the hospital.  And the surest way of achieving this, learning from recent NHS history, is not a merger of equals, but the process whereby a very successful hospital takes over a failing one."

This year, Circle, a private company, became the first private company to take over the management of Hinchingbrooke, a failing NHS hospital in Cambridgeshire. South London Healthcare NHS Trust has been put into administration and next month the administrator's report will be published. One obvious conclusion would be for the hospital to be disaggregated and its constituent parts taken over.

Takeovers only work, the authors, when the acquiring organisation changes the business model and the working practices of the staff. They look at the policy architecture enshrined in the Health and Social Care Act 2012, and draw up a four-point plan for Government to create the conditions for successful takeovers:

Admit that there are a significant number of failing hospitals. Politicians routinely make political capital by campaigning to save hospitals. Instead they should spend their time criticising the same hospitals for not providing much better services.

Stop the policy of merging failing hospitals with other failing hospitals. "Supporting mergers between unsuccessful NHS hospitals because you cannot find anything else to do with them is not going to suddenly make mergers a successful method of improving failing hospitals."

Incentivise organisations to take over failing NHS hospitals. Success will depend on the ability to attract strong NHS Foundation Trusts and the private sector, in England and abroad. Reforms have already been introduced that should encourage takeovers. Provisions in the Health and Social Care Act now mean that Foundation Trusts no longer have to disestablish themselves to acquire another organisation. They would still have to should they merge.

Make it easier for the organisation that takes over a failing hospital to do the restructuring that will improve services. The Government should signal its support for radical change. This will pave the way for hospitals to sell the idea to their clinicians and local populations.

Chains of hospitals run by the best NHS Foundation Trusts and private companies would develop centres of clinical excellence with strong brands. They would cut costs and improve the quality of the care delivered to patients, spreading best practice and achieving economies of scale. Professor Corrigan said: "Sooner or later, the Government is going to have to acknowledge both the clinical and economic case for radical change amongst NHS hospitals. The sooner it does so, the easier for local change to be pursued with a prospect of success."

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