Today’s decision by the Competition & Markets Authority (CMA), allowing the NHS hospital trusts in Bournemouth and Poole to merge, is a significant milestone. The CMA has overturned the Competition Commission’s (CC’s) prohibition of this merger, and it may also be the CMA’s last review of an NHS trust merger where the focus is on NHS services. (NHS mergers that affect services for private patients may still be reviewed by the CMA.)
The CMA’s clearance of the Bournemouth-Poole merger reflects the reduced role competition now plays as a driver for improving NHS services.
Back in 2012, the CC prohibited a Bournemouth-Poole merger because it expected that it would result in lower quality services than if the Trusts remained separate. The CC was not persuaded that there was a robust plan for delivering benefits to patients that outweighed its concerns about a loss of competition. The CMA has now decided that the CC’s previous concerns about reduced competition are no longer valid given the change in emphasis towards encouraging collaboration between local NHS organisations. Bournemouth and Poole did not even have to rely on their, now much stronger, plan for delivering benefits to patients to secure clearance from the CMA.
NHS merger planning feels like it has come a long way since our first review of an NHS transaction (at the NHS Cooperation and Competition Panel) in 2009. Trusts are now much better at setting out a robust rationale for their transactions, based on a detailed understanding of what they plan to achieve and why the merger is needed to achieve it. With this understanding, post-merger planning is more able to deliver tangible improvements in services. This is a long way from the high-level generalities that we often encountered in the past about why mergers were needed, and the lack of focus this gave to post-merger planning.
The need to persuade the CMA of a transaction’s merits has incentivised higher quality merger planning. The CC’s decision to prohibit the Bournemouth-Poole merger sent a shock through the system. NHS trusts quickly understood that they needed a high quality plan for delivering benefits to patients post-merger if they wanted their transaction approved.
It is no doubt the right move for the CMA to step back from reviewing NHS mergers, as the Government has promised and as both the NHS and CMA want. However, the NHS also has to make sure that it preserves the progress in merger planning and delivery that has come about because of the CMA merger review process.
Patient benefit cases, in particular, should be required for all future NHS transactions, and the assessment of these cases needs to be robust. Some degree of objectivity could be retained by taking care to involve people in evaluating merger plans that have no direct involvement in delivering or overseeing NHS services in the region where the merger will take place.
Many people have pointed out that many (or most) mergers in the wider corporate world fail. The NHS has also had its share of less than successful transactions. However, the answer is not to prohibit NHS mergers and preserve today’s organisational structure for eternity. Organisational change will, at different times, be the right decision and will happen. Given this, we need to make sure that we have the best possible plans for making it a success.
Our experience of working with Bournemouth and Poole over the past three years is that they, and their colleagues in Dorset, have great plans for success, and we wish them the best for the future.