This document summarizes a presentation on healthcare mergers. It discusses: 1) Mergers involve transformational change and are driven by policy goals of increasing competition and efficiencies, though political factors also play a role. 2) Mergers can take different forms and patterns, and integrating cultures and managing people's anxieties during the process are important challenges. 3) Research on a large hospital merger found its effects on organizational culture persisted seven years later, and staff perceptions varied based on their role and tenure, with managers reporting less satisfaction. 4) The findings suggest that fully developing a new post-merger culture takes significant time, and support for staff health and tailored engagement are important to consider in the

1. Healthcare Mergers
Dr Anne Mottram
Imperial College Healthcare NHS Trust
6th December 2016

2. Outline of the Presentation
• Mergers: Transformational change
• Policy context
• Are all mergers the same?
• Mergers route to success or failure?
• What happens to people during a merger?
• Why is it important to understand how organisational
culture develops in mergers?
• Research
• Questions
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3. Mergers: Transformational Change+++?
• Transformational change: ‘Intentional change in how organisation
conducts its operations, affects the strategic position vis-à-vis its
competition’ (Smith, 2002)
• Definition of ‘Merger’ - the dissolution of one or more organisations and
their incorporation by another (includes acquisitions)
• 2012 Health and Social Care Act – Competition and Markets Authority
(CMA) ‘promotes competition for benefits of consumers’ and agree if
mergers can proceed
• Yet…decision to merge UK hospital ‘depends not just on financial or
clinical performance, as in a private market, but on national politics’
(Gaynor et al. (2012)
• …Leads some organisations into ‘managerial hubris’ over-confidence in
extent of benefits likely from the merger (Choi and Brommels 2009)
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4. Policy Context
• NHS Mergers since 1948 (Health Foundation, 2014)
• Working for Patients (1989) internal market, realise efficiencies through competition,
• Regionally - The Tomlinson Report (1992) - pairs of vulnerable organisations -
University College & Middlesex (2005), St Bartholomew's & Royal London (2012), St
Thomas's & Guy's (1993)
• Five Year Forward View (FYFV) (2014) Three gaps - Disproportionate spend on acute
care, funding should be diverted to secondary care to raise standards. Variety in service
models to address financial challenges – Vanguards
– Viability of small hospitals as standalone health providers, pursue new forms, such
as merged entities or new models of care (DH, 2014)
• Devolution - Transfer of powers and decisions usually be taken by Government or
national bodies to more local level, Devo Manc
• Sustainability and Transformation Plans (STPs) (2016)– 5 year national strategy , place-
based heath & social care addressing three gaps in FYFV
• NHS Improvement and NHS England (2016) Back office consolidation, unsustainable
clinical services, review of specialised commissioned services
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5. Levels and Patterns of Mergers
• Two levels of mergers:
– Vertical
– Horizontal
• Three main merger patterns (Schoennauer (1967)
– Assimilation or absorb: Low status group absorbed into higher status
group - accounts for majority of mergers
– Integration: Blend of former identities that remain distinctly
recognisable
– Transformation: Identities of former organisations combined, new
identity bears no resemblance to formers, wholly new organisational
identity is formed
Mergers increase organisational size and complexity:
Several disadvantages: Remoteness of senior managers, loss of
informality, decreased autonomy and delegated decision making, poorer
communication (Fulop et al, 2005) , also needs funds for merger costs
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6. Mergers: Route to Success or Failure?
• Half of mergers fail (Weber and Drori, 2011)
– 17% add value,
– 30% produce no discernible difference,
– 53% destroy value (KPMG, 1992)
• Different view - depends on how terms are defined (DePamphilis, 2012)
• Mergers rarely between organisations of equal size or prestige (Giessner,
2006)
• Kings Fund (2015) reviewed 20 mergers 2000-15:
– often response to failure/FT regime progress
– few financially stable
– rarely deliver radical clinical change
• Performance limited evidence of positive impact across multiple metrics
(Gaynor et al., 2012)
• Substantial risks - Introduction ITC, reconciliation of legacy systems in
early post-merger period poses
• Measurement should be seven years post-merger (Quah and Young,
2005)
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7. What Happens to People during a Merger?
• Staff anxiety pre-merger, associated with uncertainties
regarding future jobs
= Self-survival behaviour, can negatively impact performance
• ‘We won’ tension leading to value judgements (Fulop et al,
2005)
• Staff support mergers that best serve their interests and pose
least threat to continuity of status and identity
• Workforce important in stabilisation and integration - Staff play
significant, under-estimated, role in success /failure (Schuler &
Jackson, 2001)
• Compelling vision - Move to action, changes behaviours, focuses
on priorities, follow path leader lays out: content, context,
credibility, and the ability to engage key stakeholders (Gantz,
2009)
• Speed of change influences ability to adapt – if too rapid
inhibits successful re-engineering of culture (Kavanagh &
Askkanasy, 2006)
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8. Why is it important to understand how
Organisational Culture Develops in Mergers?
• Organisations ‘mini-societies’ (Morgan, 1997), distinct cultures and sub-
cultures, rarely single, consistent culture (Howard-Grenville, 2006)
• Body of evidence culture influences performance
• ‘Culture clash’ where one groups believes their way of doing a specific
task is better than other groups
– Such differing opinions may lead to low morale and other workforce
issues, as members attack and defend their positions (Seo 2005).
• During periods of transformational change organisations start to question
their identity
• Organisational identity = individual values and organisational values in
close fit, (Dutton & Dukerich, 1991) ‘belonging to or having oneness with
the organisation’ (Ashforth & Mael, 1989)
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9. Research: How does Organisational Culture develop in a
Merger and what are the Factors of Influence?
• Research study Harvard School of Population Health & Imperial College,
*understanding culture one aspect of the study
• Evidence gap – few studies exploring people factor in health mergers
• Why the study is important
– Despite other options we keep on doing mergers!
– Policy direction .. We keep on promoting mergers!
– What can we do differently to increase success?
• Mixed methods study - quantitative core component to gather evidence, qualitative
component to offer insight on emerging knowledge
– Institutional logics – theoretical lens
– Case study design
– Systematic literature review
– Comprehensive validated survey tool – 4 parts
– Descriptive and inferential statistics
– Stakeholder post-results interviews
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10. Case study
• Merged in 2007, two
teaching trusts
• Following failed ‘campus
partnership’ for one of
the trusts
• Strongly driven by
academic partner
• 5 main hospital sites
• £1b turnover
• 10, 00 staff
• Largest NHS merger at
the time
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11. Defining Feature: AHSC
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12. Survey: Organisational Culture & Identity
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Organisational Culture Survey; Denison
From literature review - Key variables for testing:
• Pre & post merger status,
• staff band,
• clinical & non-clinical
Inclusion: employees a team more than
100 staff
Demographic details: main site, length
of tenure, type of contract, date
employment commenced (to identify
pre- and post- merger employees),
division, specialty, staff group and grade
either AfC 1 to 6 or bands 7+
(category band 7+ and above includes all
doctors and differentiates largely
between non-managers (1 to 6)
managers (7 and above)

13. Survey Responses: Breakdown
Survey
Number of Respondents 1,978
% Response Rate 24%
Groups No. Employed in
Staff Group*
% Staff Group from
Total Staff
Respondents
(N)
Response Rate %
Bands 1-6 All 5,201 64 1,300 25
Bands 7 +above All 2,890 36 678 23
Staff Characteristic Number %
Pre – Post Merger
Appointment
Pre-merger 998 50.5
Post-merger 980 49.5
Staff Band 1 to 6 1300 65.7
7+ 678 34.3
Occupational Group A&C, Managerial 519 26.2
Health Professionals 1459 73.8
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14. Results: Difference in Mean Survey Scores
Independent t-tests looking for differences between the mean scores of
survey responses - Higher scores = higher satisfaction
Organisational Culture
• Pre- and Post-Merger Significant difference, p<0.01 post-merger group
reporting higher scores
• Staff Band significant difference, p < 0.0001 bands 1-6 group reporting
higher scores
• Occupational group significant difference, p < 0.0001
clinical group reporting higher scores
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15. Results Regression – Predictors of
Organisational Culture
• Multivariable linear regression
• Organisational culture scores can be predicted based on:
– pre- and post-merger appointment
– occupational group
– staff band
– statistically significant - p = 0.000 (R square 0.24)
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16. Qualitative Research: What Factors might be
Contributing to the Results?
• Sample - 30 individuals likely to be able to contribute to
developing views across stakeholders, hierarchical and
occupational groups
• Response Rate - From the 30 - 19 respondents agreed to
participate in the interviews, response rate 63%
• Method – semi-structured, face: face interviews with 68%
(n=13), 32% (n=6) telephone interviews, recorded,
transcribed, analysed using ‘framework approach’
• Demographic - 47% appointed to the Trust pre-merger, 52%
joined after the merger
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17. Loss
Recovery and adaption
Historical
Contingency
Cultural Entrepreneurs
Sub-cultures
Cultural
Embeddedness
Competing for dominance
Logics
Potential
Thematic Analysis of Interviews
Organisational turbulence
Ability to act/control own
destiny
‘New people don’t know
the history, the bad
feeling and any of the
turbulence that
everybody went
through when the
change occurred
‘Because
it’s the
survival of
the fittest’
It’s a lot of stress for
these people Their
work/life balance is
not very balanced at
all…work takes over
100% … there can’t
be fulfilment and
happiness”
‘Changes in
CEO have
always had a
huge impact on
perceptions.”
‘When we were merged
professional groups were
pushed together. Rather than
just being one tribe of let’s
say nurses, there were two
tribes, and those two tribes
have to form the one tribe
and they have their own ways
of doing things and their own
particular base of working
and that has all changed for
them.”
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18. Contribution to Knowledge on Mergers
• New Evidence
– Effects of a merger on staff perceptions of organisational culture exist
seven years after the merger was completed
– A new merged entity culture may require a considerable period of
time to be achieved
– Staff reach ‘recovery and adaption’ at different times following a
merger – affected by their hierarchical positioning
– Staff in management posts reported less positive perceptions of the
organisation’s culture
• Contribution to Policy
– Lasting effects of a merger on organisational culture
– Health and wellbeing of staff going through mergers may influence
staff experience and adaptability to the changes – support should be
included in merger programme
– Culture is experienced differently by staff, staff engagement should be
tailored to all staff groups in mergers
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19. What do the Results Mean: Policy, Practice and
Guidance for Merged Organisations?
• Don’t underestimate time to develop culture’ of merged organisation 7 yrs
• Don’t underestimate time takes to realise the benefits of the merger 7yrs ..
association?
• Key characteristics of workforce influence how they perceive the culture of
new organisation and can predict how staff perceive culture:
• Pre-merger appointed staff less satisfaction with new culture
• Non-managerial staff appear to experience shorter bursts of stress, largely
around contractual changes
• Managers appear to experience prolonged periods of stress , less satisfaction
with culture
• Clinical staff experience higher satisfaction with culture than non-clinical –
‘intrinsic values’, less disruption to contracts
• Compelling vision to mobilise staff - perceptions and motivating forces
• Tailor staff engagement
• Consider staff health and wellbeing strategy in the pre and post merger plans 19

20. Q. How do these findings translate to
transformational change and its effects on staff
in establishing vanguards and new models of
care?
Thank You
Anne.mottram@imperial.nhs.uk
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