It’s only ten months since PCT Providers merged with NHS Foundation Trusts, NHS Trusts and each other. Now it now looks like there are more mergers to come. Assuming that they are given the go-ahead, some of the newly merged NHS Trusts will have turn-overs in excess of £1bn a year, or about 1% of the England’s annual NHS budget.
NHS Trusts are used to having little choice when it comes to the services that they can provide – acute Trusts for example, are obliged to provide A&E services and to offer hip replacements for example.
Although mergers can be a breath of fresh air. They offer the option of choosing which services will be provided. A large Community provider might want to provide acute services and therefore consider merging with an Acute Trust.
If your organisation is considering merger, then the priority surely is to provide better services to patients and to ensure that their services are sustainable in the medium to long term. This is not the same as merging primarily to deal with the debt built up in one or more of the merging Trusts. Mergers tend to fail in delivering anticipated savings and they can threaten the quality of services offered too.
So, if merger is on the agenda in your organisation, then the merging organisations need to decide on the services that they want the merged organisation to provide – will the range of services be more of the same or will there be additional services to compliment what is already provided. Choosing the right services will be key to the strategic success of the merged organisation.
Decision-making processes are arguably the most fundamental part of risk management cultures. This is because in the event that your organisation chooses to do the wrong things, it’ll fail to achieve the high level objectives of the organisation – no matter what. Even if your organisation groups resources well, sets impeccable milestones for each service and exquisitely monitors progress towards them – it’ll still fail to achieve the high level objectives of the new organisation.
Therefore the decision–making process in your organisation and partner organisations in deciding on the merger, are critical. But how do you know if the decision-making processes are fit-for-purpose?
An article published in the current edition of Audit & Risk from the Chartered Institute of Internal Auditors gives some clues. It proposes that internal audit is well placed to help organisations assess decision-making processes periodically, to see if their decision-making processes help organisations to optimise the use of resources.
From the article, here are eleven questions for consideration by your organisation and the organisation(s) that it is looking to merge with :
- What are the merged organisation’s high level objectives?
- How will you know when strategic clarity of the newly merged organisation is aligned with the expectations of key stakeholders?
- Will services in the merged organisation be best suited to strategic success and the providing better health services too?
- How will the merged organisation know when its services meet and exceed the needs of patients?
- Will the range of services in the merged organisation keep pace with changes in patients expectations and other developments? Will they help to shape demand?
- Will the services and ‘markets’ be periodically reviewed to ensure that they are continuing to align well with strategic aims – aims which are likely to change over time? Or will services be blindly offered that don’t fully contribute to the future success of the merged organisation?
- Will new services be subject to a thorough assessment of viability – including skill mix, operational costs and revenues and target ‘markets’?
- Will new service ideas be assessed alongside each other rather than in isolation, so that the relative benefits of each one is identified, and informed choices made.
- Will there be flexibility in the allocation of resources, or will new ideas fall by the wayside simply because existing resources do not accommodate good ideas that come along.
- Will timescales for delivery be well-informed? Were the actual delivery dates for the previous initiatives ahead of, or behind schedule?
- Are plans in place to discontinue declining services?
Focused effort on answering these questions will help new organisations to do things right.
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