Unprecedented demand increases pressure on NHS to collaborate, but lessons must be learned, says KPMG

Unprecedented demand increases pressure on NHS

More lessons must be learned from failed collaborations within the NHS to prevent care delivery being put at risk according to a new report launched by KPMG

Also on KPMG.com

  • NHS must pay more attention to collaboration, from conception to implementation or risk impacting quality of care
  • Some past mergers failed due to poor communication and engagement with staff, and lack of investment in integration to fully realise benefits post-approval
  • Change of leadership mindset is critical for mergers, or any form of collaboration, to work in NHS – leaders need to put patients before their own organisations 

While mergers and other forms of collaboration can enable the transformation of care delivery in hospitals, more lessons must be learned from failed collaborations within the NHS to prevent care delivery being put at risk according to a new report launched by KPMG.

The report, Hospital collaboration in the NHS, exposes the myths about healthcare collaboration and pinpoints eight lessons to ensure success in the future. The report includes a survey of UK Trust CEOs, which identifies that collaborations will play a central role in the efforts of Trusts to transform their services. Sixty-three per cent of hospitals participating in the study reported being involved in some form of collaboration, and over three quarters (76%) of participants expected to look for a collaboration within the next three years.

The main driver for this collaboration is improved quality of care, with 36 per cent of respondents citing this as their main aim, compared with 19 per cent being motivated by improved efficiency and productivity, followed by 17 per cent citing improved financial stability.

However, despite the rise in popularity, many Trusts and Foundation Trusts fail to realise the benefits of collaboration because of a number of factors. The report finds that past NHS merger and acquisition (M&A) activities have suffered from unrealistic expectations of short-term gains, an unwillingness to invest in the new organisation, a lack of attention to cultural integration and good communication during implementation.

Matt Custance, Healthcare Partner at KPMG comments: “Change will only succeed if there is some mechanism, such as a merger or legal contract, to lock the parties into delivering transformation. Our research has shown that improved quality of care is head and shoulders above all other motivations for collaboration, yet we often see the financial aspects of collaboration dictate the success of the outcome. Formalising collaboration, when done well, delivers the twin benefits of bringing clarity and locking in commitment, even when times get tough. Any collaboration needs to be given time, with longer-term clinical benefits taking priority over immediate financial gains.”

The attitudes of the leadership can also undermine integration efforts, with the acquiring hospitals management often adopting a ‘superior’ mind-set, even in cases where its clinical performance is worse than that of its new partner. Entrepreneurial culture is a valuable driver of clinical innovation in the NHS, but it is impossible for good managers or clinical leaders to replicate their activity across sites. Standardisation and codification can support a drive for innovation, but without it, leaders risk expending a significant amount of personal effort on firefighting daily problems, compromising overall performance.

Beccy Fenton, Healthcare Partner at KPMG comments: “A standardised, efficient, approach to continuous improvement would enable the NHS to deliver much greater value for money, improved quality and higher staff morale. Equally importantly, it would provide a solid foundation for collaboration, ensuring that all parties adopt a common approach, and therefore easing the path to integration.”

Collaborations can take many forms, with joint ventures, franchises, and cooperatives, particularly across tiers of care, proving popular.  Although only 17 per cent of respondents claim to be collaboration primarily to improve financial sustainability, a merger or joint venture can open up opportunities to reassess the estate, and help raise funds to invest in new models based around community care.

When looking at the financing behind these collaborations, public money is getting ever scarcer, and capital investment plans are coming under intense scrutiny.  The approval process for transactions is slow and complex and increasingly tight capital budget limits, combined with stringent accounting rules serve to limit the availability of public capital.

The majority of NHS mergers to date have been centrally funded, but many have subsequently suffered from a lack of capital investment. By collaborating with the private sector, a trust can remain focused on delivering excellent clinical services while the private sector collaborators, such as construction contractors and facilities management companies, can use their experience in building and managing large estates, to open doors to capital often involving private finance.

Looking ahead, Matt concludes: “Ultimately, the type of collaboration should be closely tailored to the type of challenge it is addressing. Whatever form or structure organisations choose for working together, their success will depend on a really clear focus – a vision that they want to achieve together.  It’s also important to make sure that both parties have something to gain, that staff and patients are part of the change, that culture is managed really well, that the best of both organisations is respected and promoted, and most importantly remembering it’s about the patient.”

For more information and to download the report, please visit:




For further information, contact:

Ann Burton

T: 020 7311 6497

M: 07467 339 719

E: ann.burton@kpmg.co.uk

Follow us on twitter: @kpmguk

KPMG Press Office: 020 7694 8773


About KPMG

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff.  The UK firm recorded a turnover of £1.9 billion in the year ended September 2014. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 162,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.  Each KPMG firm is a legally distinct and separate entity and describes itself as such.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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