SHAs pressurising PCTs into vertical integration

9 Comments

Primary care trusts in at least four regions are under pressure from their strategic health authorities to vertically integrate their provider arms with acute or mental health trusts, HSJ has learned.

The Department of Health has set a 31 March deadline for PCTs to gain “approval in principle” from SHAs for their Transforming Community Services proposals. HSJ understands at least four SHAs have told their PCTs vertical integration is effectively the only option.

There are some fairly terse conversations between SHAs and PCTs [saying] ‘never mind the guidance, you are going to do it this way’

NHS Alliance chief officer Mike Sobanja said he believed vertical integration was the “most predominant” model being proposed, despite DH guidance allowing alternatives, “not because anyone thinks it’s the best model, but because it’s the model that can be implemented quickly”.

He said: “There are some fairly terse conversations between SHAs and PCTs [saying] ‘never mind the guidance, you are going to do it this way.’”

HSJ understands some PCTs are resisting, especially where alternative plans are advanced.

But one foundation trust finance director told HSJ that research by NHS Institute for Innovation and Improvement director of service transformation Helen Bevan showed it was a “no brainer” for community services to be vertically integrated with acute trusts.

The unpublished findings have been disseminated by some SHAs, and the finance director claimed they showed reforming community services to make them more productive could make national savings of around £500m - if the resulting spare capacity was shut down.

The research suggests that could be trebled if spare capacity in community services was used to absorb patients from acute settings, rather than downsizing community services.

Advocates of vertical integration argue that a “whole system” approach to efficiencies is most likely if both community and acute services are run by the same organisation.

But Ms Bevan told HSJ that was not the intention of her research, which is based on tentative findings from the institute’s productive community services programme.

She said: “Vertical integration is one of the ways of dealing with the [organisational] interface issue that can stand in the way of [getting the full efficiency benefit] but it’s not the only way.”

She said there was a danger foundation trusts would “bolt on” community services rather than reform patient pathways, which was the only way savings of up to £1.5bn would be found.