Sustainability and transformation plans must not be kicked into the long grass - they could be a better solution to NHS problems than the often over-rated reconfigurations, say Richard Murray, Nigel Edwards and Candace Imison

NHS leaders have been busy developing sustainability and transformation plans, trying to bridge both the financial black hole facing the NHS and improve (or not worsen) quality of care.

Facing these challenges, local leaders are being encouraged to be bold. Given the operational and financial pressures facing the NHS, this is no doubt appropriate. However, for many this has translated into looking at major acute sector reconfiguration, particularly of A&E units. Such reconfiguration, it is hoped, will deliver savings and improve quality, while the depth of the financial crisis will provide the impetus to take forward very controversial changes with the public and politicians.

Some reconfiguration savings are built from an assumption that bigger is cheaper. However, there is little evidence for real economies of scale

In a post-referendum world, whether politicians are keen to see a wave of controversial reconfigurations across England remains to be seen. However, in most cases such an approach, even if it does overcome public and political opposition, is likely to be a financial dead end. Why? Because it ignores the evidence that major acute sector reconfiguration rarely saves – and frequently costs – money, and sometimes also fails to improve quality.

Some reconfiguration savings are built from an assumption that bigger is cheaper. However, there is little evidence for real economies of scale and some good reason to be concerned about the diseconomies caused by the complexity of larger organisations.

Such savings, where they do exist, often arise when two under-used services are merged into one: this hardly applies when the NHS is already operating at full capacity. This was confirmed in more recent work by Monitor, which concluded ”detailed analysis did not find that higher costs have been associated with smaller scale”.

Neither did this work find evidence that quality was lower in smaller providers. More specialised services where under-utilisation may sometimes exist account for only a small proportion of the business of most English hospitals. More generally in specialised services, the potential benefits may lie in improving outcomes for patients rather than lower costs.

Any potential savings have to be set against costs. Reconfiguration is likely to need significant capital investment and expansion of staffing in the receiving site(s). The proposed reconfiguration of services at Mid Staffordshire, for example, were expected to cost in excess of £200m.

Challenging workloads

While it may appear easier to provide clinical cover on one site rather than two, any significant reduction in the intensity of cover poses risks to quality given already challenging workloads. There will also almost certainly be significant additional costs for ambulance services (already running at full stretch in most areas). Finally, services designed to protect local access and secure public support, such as urgent care centres or midwife-led units will also reduce any potential savings.

Some reconfigurations make bold assumptions about managing demand and reducing length of stay. There is certainly scope to do this but experience suggests it is difficult and that unless very significant reductions in overhead costs can be made, it cannot be assumed that out of hospital alternatives are any cheaper. The direct costs of hospital care may in fact be lower unless significant costs can be shifted to carers or social care – neither of which are easy.

In any case, switching to community settings just to save money risks increasing the burden on carers and adding to pressures on social care services, or disguising what are effectively poorer quality services.

Where savings do occur, these are likely to require upfront investment and will not deliver quick savings

Meanwhile – as with mergers – reconfiguration of clinical services are complex to plan and deliver. As such they can eat up substantial management and clinical time.

The Audit Commission found that large scale reconfiguration can be a significant contributory factor to financial failure as leadership becomes absorbed in managing change. This investment needs to be factored into plans as success requires many hours of senior executive and clinical time to develop plans, persuade the public and staff of their merits and successfully implement them.

Evidence lacking

This also needs to build on good relationships and trust between local stakeholders including GPs, community providers and local authorities. Sadly, this level of trust is lacking in many areas.

A report published by The King’s Fund in 2014 based on a major review of the evidence on clinical reconfigurations concluded ”the evidence to support the impact of large-scale reconfigurations on hospital finance is almost entirely lacking” and in some cases has reduced quality of care.

Where savings do occur, these are likely to require upfront investment and will not deliver quick savings. Critically they require detailed workforce, engagement and financial plans with supporting service improvement strategies. This involves being really clear about where any savings are expected to occur with the associated granular implications for the workforce.

This is not to say reconfiguration never works, especially when making cost savings is not the key goal and there are sensible timescales. However, STPs now offer the chance to bring together community services, general practice, mental health, social care and acute services into a coherent population-based plan with opportunities to generate significant savings and improvements in quality from redesigning patient pathways within and across these sectors.

Given how very unlikely it is that major acute sector reconfiguration will ultimately prove to be a common answer to the challenges facing the NHS, what a missed opportunity it will be if STPs instead get deflected into bruising rows with politicians and the public over A&E services.

Richard Murray is director of policy at The King’s Fund, Candace Imison is Director of Policy and Nigel Edwards chief executive of the Nuffield Trust.