Merging integrated care systems: risks and implications

Integrated care boards (ICBs) are facing cuts of 50% to their running costs and recently submitted plans setting out how they will live within their new financial means. According to national policymakers, ‘Most savings will come from streamlining approaches, identifying efficiency opportunities...and at scale opportunities through greater collaboration, clustering and where appropriate, eventual merger of ICBs.’

At present, 42 ICBs operate within the NHS in England. However, according to recent reporting this number is set to be reduced, with 28 ICBs potentially merging into 13 larger entities. Other media reports suggest ICBs will be encouraged to ‘align their boundaries with the 11 combined authorities’, requiring ‘numerous current and proposed ICBs to be split up and reshaped once again’. However, the timeline remains uncertain and final merger decisions will depend on the parallel reform of local government and where those boundaries end up lying. Further clarity will hopefully come with the 10-Year Health Plan, set to be published this week. 

The latest in a long line of mergers

This latest bout of proposed mergers is not the first time NHS administrative bodies have been tasked with amalgamating. Between 1996 and 2002 the NHS in England and Wales was organised under 95 Health Authorities. In 2003, these were replaced by Strategic Health Authorities (SHAs) and Primary Care Trusts (PCTs). In 2005, the government announced that the number of SHAs and PCTs would be reduced. By October 2006, 303 PCTs had merged into 152 larger trusts, with an average population of just under 330,000; SHAs were reduced from 28 to 10.

PCTs’ successors, clinical commissioning groups (CCGs), also underwent restructuring. In November 2018, their administrative budgets were cut by a fifth with a view to saving ‘more than £320m a year’. Mergers were not mandated but by February 2020 the total number of CCGs fell from 191 to 135. 

The proposed ICB mergers follow the pattern set by their predecessors, reflecting – again – a broader restructuring effort aimed at improving efficiency, streamlining decision making, and saving money. The impact will be uneven and there are implications for those that don’t merge and who may be left at an advantage, able to continue service transformation unimpeded by structural and leadership changes. For others, consolidation introduces several challenges. Drawing on our analysis of ICS characteristics and the history of NHS reorganisations, we draw out some of the potential implications.

Risks and implications of merging

The success of any merger will depend on how the amalgamation accounts for differences and similarities between the two or more systems. For example, merging two or more ICSs with very different characteristics – such as size, deprivation levels or demographics – may have implications for the ability to strategically commission services, maintain a clear understanding of the combined population, and target interventions across larger and more diverse areas. Mergers bring the risk of a 'one size fits all' approach that overlooks local needs, or the potential for larger systems in a cluster to dominate decision making.

Merging systems – especially those with divergent performance – will also have implications for performance assessment and management. How will the new performance assessment framework, for example, assess newly amalgamated systems, especially those with substantial internal variation? A higher performing ICS may help a lower performing partner improve through peer learning. Conversely, overall performance may decline if the lower performing ICS becomes a drag on the partnership. Pairing two struggling systems looks more challenging still. The same arguments could be extended to financial circumstances. 

All mergers pose challenges, but systems with strong relationships, governance and leadership that merge with less robust or mature systems risk creating an uneven balance of power. Trust and effective partnership working take time to develop, and mergers might mean the loss of hard-won local relationships and expertise. 

The reorganised landscape also poses questions about scale. The new, enlarged footprints will leave a wide gap between leadership at local and at system level. With the advent of neighbourhood health, likely focused on services for populations of around 50,000 and the new suggested average ICB population sitting at around 2.2 million, questions remain over leadership and coordination between these two tiers.

Finally, while merging systems risks increasing organisational and partnership complexity, with the newly formed ICSs overlapping with more local authorities, there is also an opportunity to introduce or increase alignment with both existing local authorities and the new strategic authorities. Lack of coterminous boundaries between ICBs and the local government institutions they are called on to collaborate with can hinder partnership working and make decision making and policy implementation more challenging.

The ‘right thing to do’?

Since 1974, the NHS has undergone almost constant reorganisation and structural reform. 50 years on, while there is little evidence to suggest that any one of the experiments thus far has been the ‘right one’, there is consensus that this treadmill of change has limited the ability of NHS organisations to develop and deliver services for patients. Looking back at previous reorganisations, it is striking how much of the coverage and critique remains relevant. In 2006, commenting on the merger of PCTs, then Director of the King’s Fund, Niall Dickson, said that he was ‘not convinced that a complete reorganisation of the health service at such a crucial time was the right thing to do’.

The 10-Year Health Plan will need to set out the logic for these changes and provide some clarity over how they align with the broader direction of health system reform. At best, this process may create new opportunities for collaboration and combining commissioning expertise. But there are serious risks associated with the continual cycle of reorganisation in search of the supposedly ‘perfect’ system.

With thanks to Jonathan Clarke for his analysis of ICBs that informed this blog.