NHS reorganisation could cost £3 billion

The government’s radical reorganisation of the NHS in England is likely to cost between £2bn and £3bn to implement - money that will probably never be seen again according to an expert.

Writing in bmj.com, Kieran Walshe, right, Professor of Health Policy and Management at Manchester Business School says that few NHS reorganisations have ever been properly evaluated but a recent National Audit Office study of over 90 government reorganisations found that, despite huge costs, the benefits were unclear, the process was often poorly managed, and that its impact on performance was often adverse.

He argues that the new government 'looks likely to make all these mistakes again.' Walshe says that Andrew Lansley, right, 'seems to have learned little from the past history of NHS reorganisation' and recommends three things that the new government should learn.

• Firstly, structural reorganisations don’t work, he says. There is little evidence to suggest that any of the different commissioning structures put in place over the last twenty years were particularly better or worse than others, he writes, or that the proposed changes 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, he adds.
• Secondly, the transitional costs of large scale NHS reorganisations are huge, and the intended or projected savings from abolishing or downsizing organizations are rarely realised. Walshe estimates that the proposed NHS reorganisation will cost between £2bn and £3bn to implement, at a time of unprecedented financial austerity, and questions whether these changes will produce higher or lower management costs.
• Thirdly and most importantly, reorganisation adversely affects service performance, he warns. It is a huge distraction from the real mission of the NHS – delivering healthcare and improving healthcare quality – and can absorb a massive amount of managerial and clinical time and effort. It can also destabilise organizations or services and result in poor performance or failure.

Although the government's plans have been welcomed by the BMA, Walshe says that during this consultation period the government needs to produce empirical evidence, not ideological platitudes, to justify the case for change. 'The intended costs and benefits must be made explicit and measurable … and a systematic analysis of the impact of the reorganisation should be produced within two years of its implementation and presented to parliament.'

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