The False Economics of NHS Integrated Care Systems

Dr John Carlisle 2018/2020

The Keep Our Health Service Public (KONP) Statement to the House of Commons Health and Social Care Committee on Integrated Care: organisations, partnerships and systems (June 2018) missed a trick, i.e. it did not question the assumptions around the economics of Integrated Care. The statement quite rightly pointed out the projected completion time is wholly unrealistic, but does not question the model from a business/economic viewpoint. After all, the Tories are the party of business and like to be seen as “efficient” deliverers when, in fact, economic delivery is their Achilles Heel.
For those who remember Ancient Greek history, KONP could have played Paris and driven a fatal arrow into that heel; but have persistently resisted deploying economic arguments, preferring the legal and human, which this inhuman government has brushed aside.
Here are some figures from international research gathered for the Local Government and Regeneration Committee looking into public sector delivery (2013). The changes have been based on the principle of shared services, i.e. greater “integration” by centralising the resources and creating efficiencies through lower transaction costs and more IT.
 Western Australia’s Department of Treasury and Finance Shared Service Centre promised savings of $56million, but incurred costs of $401 million. Cancelled.
 The NAO report into the Research Councils UK shared services reorganisation showed it was due to be completed by December 2009 at a cost of £79 million. But, in reality it was not completed until March 2011, at a cost of £130 million.
 The Department for Transport’s Shared Services, initially forecast to save £57m, is now estimated to cost the taxpayer £170m, a failure in management that the House of Commons Public Accounts Committee described as a display of ‘stupendous incompetence’.
 The DWP’s Universal Credit fiasco needs no elaboration. Lord Forsyth: “designed by people who had no idea what life is like for people who are living on the breadline, and who have got no savings.”
We can find NHS examples of huge waste without too much effort, especially in IT and care transfer.
Why should the campaigners consider this sort of microeconomic data? Because these principles are behind the thinking of the NHS reorganisation into ICPs etc., and they just do not work in most cases. In fact, mergers in the private sector fail 80% of the time and those that succeed suffer a loss of productivity for around 18 months or more. The best merger companies, e.g. Siemens, allocate a great deal of time and resource to the process, making huge efforts to not hamper production and service activity. Collaboration is a culture, not a structure. The last thing the NHS needs now is further reorganisation. People are exhausted, as is the money.
So, turning their own assumptions against them and question the “return” on the huge disruption, asking how they can be sure the investment is more likely to succeed than just building and rewarding a collaborative culture across the health system..