The challenge of acquisition

Any suggestion that the approach should be a straight copy from the private sector is wrong. Yes, there are a few applicable lessons from the private sector, which after all does have the relevant history, but public services demand a more considered approach. Understanding exactly why one organisation is interested in wanting to take over another, and how they would approach longer-term strategy is a good starting point.

The single biggest challenge within the NHS is not necessarily stimulating interest in acquisition as a new business venture, but creating incentives for potentially acquiring foundation trust boards. After all, the bottom-line is they are being asked to take over organisations deemed to have failed, which is a bit like being asked to take over someone else’s overdraft – where’s the incentive? Yes, there will be potential strategic benefits to an acquirer that will come into play but in the context of the current policy framework that’s about all there is.

Maintaining the ongoing interest of acquirers isn’t about numbers and quantitative analysis but relationship management – helping the interested acquirers and the organisation to be acquired to overcome potential obstacles along the way. These obstacles could be financial, the strength of future support for change and managing local politics. At the end of the process there has to be sufficiently clear and attractive reasons to all parties for proceeding with the acquisition.

And these parties have to include commissioners because they will be expected to agree to post-acquisition strategic change, which probably will be necessary to restructure services to eliminate historical debt and meet the aspirations of GP commissioners.  It is, after all commissioners and the clinical staff of the acquired organisation who together will have to create a new future.

Appealing to altruism and warm desires about playing a part in protecting a national health system certainly won’t cut it. And with all the regulatory risk continuing to rest with the acquiring organisation once they add a financially challenged organisation to their books something more has to be offered to make acquisitions work. Perhaps this is where ideas about system shared risk and an NHS bank should be resurrected?

The lack of a politically agreed failure regime has bedevilled the NHS for years but pressure to address failing organisations so that local health services are maintained means it cannot be left much longer.