The English NHS hospital sector is facing a wave of mergers, acquisitions and reconfigurations, HSJ’s extensive survey of trust chief executives has revealed.

The first instalment of the quarterly HSJ/Capsticks trust chief executive Barometer is published as hospitals finalise their 2011-12 accounts and negotiate with commissioners for what is expected to be a tough year for providers.

Sixty-five of England’s 166 acute and specialist trust chief executives completed the survey. Only 25 of the respondents are not involved in or considering mergers, acquisitions or the gain or loss of services.

A third of hospital leaders are considering acquiring services from another trust, in whole or part. Meanwhile, 15 per cent could cede some of their services to another NHS body. One in eight anticipates transferring part of their work to a private or third sector body or social enterprise.

The Barometer also reveals further sharp divisions between trusts with some reducing services and concerned about quality and others looking to expand.

Thirty-one per cent of chief executives said their organisations were planning to expand in the next 12 months, but 25 per cent said their hospitals would be cutting back on services offered to patients.

Many trusts believe they will struggle to improve the quality of care they provide. Asked to rate their confidence that their organisation could “improve quality of services over the next 12 months” on a scale of 1 to 10, 33 per cent gave a score of 5 or lower. Sixteen per cent gave a score of 9 or 10.

The reason for the differing fortunes of NHS hospitals was made clear by questions about their financial health.

Asked to rate their confidence on a scale of 1 to 10 that their organisations would not need “external financial support” in the next financial year, 37 per cent of chief executives gave a score of 9 or 10, but 26 per cent gave a score of 1 or 2.

Chief executives were also concerned about commissioning quality. Asked to rate their confidence on a scale of 1 to 10 that “commissioners have the expertise, resources and support to carry out their role effectively”, 57 per cent gave a score of 1-3.

The survey results come after health secretary Andrew Lansley approved the merger of four London hospitals to create a £1.1bn-turnover trust. Meanwhile, three cases of district general hospitals taking over neighbouring trusts have been considered by the competition regulator in the past month.

Two recent studies, from Bristol University’s Centre for Market and Public Organisation and the Commons public accounts committee, have warned against mergers as a way to address the perceived unviability of smaller trusts.

King’s Fund senior fellow Nigel Edwards said: “The history of mergers and large multi-site trusts is very mixed.

“The traditional approach is just to centralise services to deal with a viability issue. That simply shifts the risk from the commissioner to the provider and doesn’t address the issue of what is done where – it’s just the old model but bigger.”

The survey indicates chief executives are planning for significant consolidation of services in fewer providers. However, some are still concerned that reconfiguration will not take place.

University College London Hospitals Foundation Trust, chief executive Sir Robert Naylor said there was still fear of the “Kidderminster effect” – when a retired consultant unseated a sitting MP in the 2001 general election by campaigning to save an accident and emergency department.

What’s keeping chief executives awake?

“Delayed transfers of care: budget reduction for community service provision is already having an impact on the quality of care for older people.”

“Operationally, the rapid growth in the frail older population requiring acute health services; strategically, an FT application process likely to be fundamentally overhauled post-Francis [the inquiry into Mid Staffordshire Foundation Trust].”

“Managing multiple relationships with new ‘immature’ organisations and reconciling their incompatible commissioning priorities.”

“Pathology centralisation via enforced tendering, the so-called ‘patient revolution’ plus the patient survey work and the bureaucracy and performance management that goes with it.”

“Constant relationship building with new people in new, transient or limited-life commissioning/system leadership functions.”

“The FT application process and the numerous assessments that all duplicate each other. The sums of money I have to pay to external assessors to come in and all tell us things that often contradict the previous assessor.”

“The ridiculous C difficile target being set for 2012-13 and disproportionate penalties associated with failure.”

“The creation of new local education and training board arrangements.”

“Regulation, not just from the two main [regulators].”

“Risk aversion and increasingly onerous process with regard to FT application process in anticipation of the Francis report.”

“Due to the financial climate, we must merge. Money, merger and quality are the matters on my agenda.”

Acute sector faces wave of mergers and reconfigurations