Reorganisation of the NHS in England

For many healthcare professionals and managers working in the NHS, last week’s publication of the white paper Equity and Excellence: Liberating the NHS brought unwelcome but familiar news—that the new government plans to reorganise the NHS in England.1 Despite having promised just two months ago in the coalition government’s agreement to “stop the top-down reorganisations of the NHS that have got in the way of patient care,”2 the new secretary of state, Andrew Lansley, announced plans to abolish strategic health authorities and primary care trusts; to create about 500 new general practitioner consortiums to handle healthcare commissioning; to hand over public health responsibilities to local authorities; to strip the Department of Health of many of its functions and to create an independent NHS board to take them on; to force all NHS providers to become NHS foundation trusts; and to restructure arrangements for healthcare regulation. Little of the current architecture of the NHS will survive these changes unscathed. The white paper, written at breakneck speed in about six weeks, is long on rhetoric but short on detail and specifics. It promises at least seven further strategy or consultation papers on various topics and another white paper, on public health, in the autumn.

For someone who has spent more than six years mastering the health brief in opposition, Andrew Lansley seems to have learnt little from the history of NHS reorganisation, which was analysed recently in detail.3 Over the past 30 years, governments have reached repeatedly for structural reorganisations of both the NHS and the Department of Health. They have created, merged, and abolished health bodies and distributed service, functional, and geographical responsibilities in different ways.4 Reorganisation has often been cyclical, with new governments or ministers reinventing structural arrangements that their predecessors abolished, seemingly unaware of or uninterested in past reorganisations. Reorganisation has happened frequently—with at least 15 identifiable major structural changes in three decades, or one every two years or so. And reorganisation has been rapid, with changes often being initiated in advance of formal legislative approval, the details of reforms being worked out as they are implemented, and the timetable for hasty consultation and implementation being a matter of weeks or months. This latest reorganisation looks likely to make all these mistakes again.

We have little evidence that these reorganisations have produced much, or any, improvement.5 Few NHS reorganisations have been properly evaluated, but a recent study from the National Audit Office of the reorganisation of central government is highly relevant to the Department of Health and the NHS.6 It makes dismal reading. In the four years up to 2009 the study identified more than 90 reorganisations of central government departments and agencies. The costs of 51 of these reorganisations for which data could be found were £780m (€935m; $1200m), although the authors think this is a substantial underestimate of the true costs. They point out that the benefits of reorganisation were unclear, that the process was often poorly managed, and that its impact on performance was often adverse.

In brief, the government should learn three things from the history of NHS reorganisation. Firstly, structural reorganisations don’t work. Although NHS performance may be problematic, there is often little evidence to show that the causes of poor performance are structural or that the proposed structural changes will improve performance. For example, during the 20 years since the internal market was introduced to the NHS, we have seen a bewildering variety of forms and structures put in place to run primary care and commission secondary care7—family practitioner committees, health authorities, GP fundholders, total purchasing consortiums, GP multifunds, primary care groups, primary care trusts, and external commissioning support agencies—and now the new government proposes another round of changes and the creation of around 500 new GP consortiums to undertake commissioning. Yet we have little evidence to suggest that any of these organisational structures for commissioning are better or worse than others, or that the proposed new consortiums will work any better than the current arrangements. Indeed, some would argue that the perceived failures of healthcare commissioning result not from any particular structure but from these repeated reorganisations and the discontinuity and disruption they produce.8

Secondly, the transitional costs of large scale NHS reorganisations are huge, although they are often discounted or ignored, and the intended or projected savings from abolishing or downsizing organisations are rarely realised. Closing down or merging organisations produces a round of expensive redundancies, early retirements, and redeployment, while new organisations find new premises and appoint lots of new staff. On the basis of the National Audit Office’s survey data,6 I estimate that the proposed NHS reorganisation will cost between £2bn and £3bn to implement, at a time of unprecedented financial austerity. Reorganisations are often presented as an exercise in cutting bureaucracy, and this one is no exception, with the astounding claim being made that NHS management costs will be reduced by 45%. It remains to be seen whether these changes, which involve abolishing 162 organisations and creating 500-600 new ones, will produce higher or lower management costs, but throughout the past two decades the numbers of NHS managers and the management costs of the NHS have grown steadily, regardless of reorganisation.9

Thirdly, and most importantly, reorganisation adversely affects service performance.10 It is a huge distraction from the real mission of the NHS—to deliver and improve the quality of health care—and it can absorb a massive amount of managerial and clinical time and effort. It saps morale and creates uncertainty for many people about their careers and futures. In addition, new or merged organisations take time to become established and start to perform well.11 Reorganisation can also destabilise organisations or services and result in poor performance or failure.12

The new government’s proposals deserve careful scrutiny and debate, both inside and outside of parliament. The government needs to produce empirical evidence—not ideological platitudes—to support the case for change. If this reorganisation proceeds, the government should commit to following the recommendations of the recent National Audit Office report on government reorganisations. This would mean making the intended costs and benefits of NHS reorganisations explicit and measurable in a statement to parliament. They would then be identified and accounted for separately by NHS organisations so that they could then be measured properly. A systematic analysis of the impact of the reorganisation should also be produced within two years of its implementation and presented to parliament.