Takeover: tackling failing NHS hospitals

Document type
Report
Author(s)
Corrigan, Paul; Higton, John; Morioka, Simon
Publisher
Reform
Date of publication
1 September 2012
Subject(s)
Health Services
Collection
Social welfare
Material type
Reports

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The authors estimate that between 20 and 30 NHS hospitals are failing and will need particular attention during this Parliament. They explain that hospital closures are not the only answer to a failing hospital; indeed the threat of closure can arouse resistance to much needed change. The NHS should give much greater attention to allowing other organisations to takeover and turn around failing institutions. Takeovers should not protect the status quo; instead, they must be a catalyst for improvement. To cut costs and improve the quality of care service need to be transformed.

To date, approaches for dealing with failure in the NHS have not generally worked. Either hospitals have been bailed out – effectively subsidising failure – or they have been forced to merge with other failing hospitals; only to create bigger failing institutions. Even now, there are a significant number of mergers anticipated in the hospital sector within the NHS.

Looking at case studies and published research, the authors examine the body of evidence about why past mergers have not worked and identify the key determinants of success. Fundamentally, they argue, the acquiring organisation has to be able to change 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 make the improvements 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.

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