The creation of Grampians Health – a case study focusing on lessons learned from a health service merger
Stephen Duckett A , Rob Grenfell B * and Sharon Sykes BA
B
Abstract
This case study of the merger of four hospitals in western Victoria reports on the views of participants affected by the merger – as staff or from the communities – about 2 years after the merger. Respondents reported that many of the sought-after benefits of the merger were being delivered. However, the merger process itself attracted criticism, and it is here that this merger can provide lessons for others. Although there was a long lead time of consultation prior to the formal decision to merge, there was very little time to plan the next steps of implementation – there were only days between the decision and the merger taking effect. Future mergers should manage that differently. There is also a lot of literature on mergers which might provide a check list to enhance the likelihood of success in future mergers.
Keywords: governance, hospitals, implementation, rural.
The creation of Grampians Health on 1 November 2021 was a step forward for health care in the western part of Victoria. The new entity was created by amalgamating Edenhope and District Memorial Hospital, Stawell Regional Health, Wimmera Health Care Group and Ballarat Health Services. This case study has been written to share the experience of the amalgamation 2 years down the track, highlighting lessons for others following a similar path.
Introduction
Victoria is unique among Australia’s larger states in terms of the number of separate health service entities with almost five times as many separately incorporated bodies compared to New South Wales, which is larger in both population and geographical area. The governance responsibilities of each health service board are complex, as is the management of each entity. Not surprisingly, there are regular calls for amalgamations, particularly in rural Victoria.
This case study tells the story of a recent amalgamation which resulted in the creation of Grampians Health.
This paper draws on interviews conducted by author Sharon Sykes between 17 July and 5 September 2023 with key stakeholders in the amalgamation, collecting information from 22 individual semi-structured interviews, one focus group and two written responses. The respondents were purposively collected to reflect the range of potential views, from all types of backgrounds and locations. All responses were recorded in a template form (see online Supplementary material) with information held securely and not accessible by health service management. Because the study was a policy evaluation study, human ethics committee approval was not sought.1,2
The scope of this study was limited to internal and external stakeholders with direct personal knowledge of the amalgamation and its effects. Stakeholders included Grampians Health staff in leadership roles, Board members, leaders in other relevant organisations and consumer representatives that had been involved in Grampians Health – with the predecessor entities or since the amalgamation. There were strong similarities between the staff and non-staff groups of interviewees in both negative and positive themes.
The amalgamation was designed to address five key issues: inequitable health outcomes for the Wimmera region; low and declining access to local health services; under and over-utilised resources across the region; workforce gaps, weaknesses and vulnerabilities; and duplication and inefficiencies in corporate functions.
The development of this ‘lessons learned’ project was informed by the literature on hospital amalgamations. Overall, studies on the effect of mergers have largely focused on economic parameters,3,4 rather than on quality of clinical care, and where quality was a focus, results were equivocal.5 A number of studies highlighted the impact of amalgamations in rural areas,6,7 and the cultural/staffing issues associated with mergers.8,9
A study of 13 Netherlands based hospital mergers between 2008 and 2014 was particularly relevant to the Grampians Health amalgamation experience.10 The quantitative component of this study showed little measurable impact on quality. The qualitative component, involving interviews with chief executive officers (CEOs), the quality and safety managers and medical specialists, identified the need to actively address cultural clashes and political power plays.
Findings
The good news
Overall, participants were supportive, saw the value of amalgamation and were optimistic about what the future held. There was consistency around the potential benefit to staff, patients and the community that the amalgamation would bring, and an enthusiasm to realise this. Gains already made were acknowledged, with a strong focus on improvements in clinical safety and access.
Of the five key issues that the amalgamation was designed to address, three of the five most mentioned positive themes directly related to the goals surrounding these (Fig. 1). Both staff and non-staff cohorts viewed enhanced clinical care as the key positive from the amalgamation with 9 of the 13 staff and 6 of the 12 non-staff mentioning this at interview. Numerous examples of enhancement of services were given by participants with many of significant and measurable benefit to the patients involved, and their ability to access quality care closer to home. Some inclusions of note were the delivery of child dental services in areas where it had not been accessible for 3 years, improved medical oversight in smaller sites, expansion of at home services and delivery of chemotherapy services at smaller sites, closer to home maternity services and more timely support and transfer of deteriorating patients.
The amalgamation was also viewed as having had a positive impact on workforce mobility and professional development and an enthusiasm for opportunities in the future. Once again, several examples were provided by participants in this area including staff swaps between the intensive cares and operating theatres, improved recruitment, expansion of sites for nursing graduate programs and working towards staff housing solutions.
Opportunities for improvement
There were obvious negatives, and these are where lessons can be learned from this case study. The negative themes centred around the implementation process and were not focused on the amalgamation itself (Fig. 2).
Respondents’ views on the main negative issues associated with the amalgamation, by respondent type. ICT, information and communications technology; HR, Human Resources; BHS, Ballarat Health Service; BAU, business as usual.
Although there was a reasonable lead up time for consultation before the decision to amalgamate, there were only a few days between the government decision to amalgamate and the go-live date giving inadequate time for a structured approach to planning the first months and almost no time to engage with either staff or communities. Many negative themes were based on perception of negative cultural and poor communication experiences with some voicing that the larger facility in Ballarat, being a dominant player, had a strong negative impact and others seeing the need for equal voices from all sites as inhibiting Ballarat staff’s feeling of inclusion in the process.
Several suggestions were made on an approach to implementation that may mitigate this in future amalgamations. These related to change management (e.g. embedding change positions at all sites before, during and after the implementation, and standardisation of change processes to increase transparency and fairness). Other suggestions included earlier scheduling of a shared information technology (IT) platform, policy and governance arrangements to promote communication and connectedness and earlier recruitment to key positions.
Earlier system integration was a dominant theme and would have smoothed the transition to the amalgamated health service; several staff commented that they felt they had been ‘building the plane whilst flying it’. An earlier and strong emphasis on financial and human resource systems, IT and risk management were highlighted as key challenges that had not set the change up for early success. Inadequate time and funding were viewed as contributing to these issues.
Communication and engagement with staff and the community was viewed as initially good by many but as dropping away over time; the need for sustained focus in this area could have turned this into a positive theme. Interviewees suggested a multifaceted approach to communication was required throughout the change and that the regular CEO address to staff and the whole of Grampians Health Thrive circulars now in place are effective and would have been useful from pre-amalgamation.
It was clear that the staff in the smaller facilities were closely linked to their immediate communities and that any impact on local staff involves an impact in the community. The impact of the changes needed to be discussed openly with the community. There was also the need for a greater conversation around the expectations of clinical capability in the region.
The negative themes are of particular interest in what they do not include. Participants commented that prior to the amalgamation many concerns had been raised to them around loss of services, loss of jobs, loss of local board control and loss of service identity. These have not been highlighted in the participant responses as negative themes post amalgamation, possibly because people had been reassured on these concerns, or moved on to more practical matters. Negative themes focused more on the broader implementation concerns than the actual change impact.
Lessons learned
The positive themes emphasised the benefits that the amalgamation has already brought to the region and its health services and the potential benefits that the new entity will bring in the future to care delivery, workforce opportunities and service efficiencies. There were numerous examples of early wins in care closer to home and improved safety of care delivery, with many mentioning improvements in service delivery in Stawell, maternity and dental services in particular. Work has commenced on service harmonisation with forerunners in maternity, intensive care and emergency services.
Opportunities for workforce mobility and professional development were already gaining traction at the time of the interviews, particularly in nursing and midwifery placements and medical credentialing. It may be the case that staff who were unhappy with the amalgamation have left the organisation but there was a strong impression of staff support, and staff were positive about the future opportunities that would occur.
Enablers of the change include a strength in leadership to govern the change and provide a cohesive direction and clear vision for the future. The later consistent messaging – that the change must be seen to benefit patients, staff and the community and create value for them – was probably an important contributor to the positive reception of the amalgamation.
Every amalgamation has its unique features, however, the lessons learned from this case study can inform future amalgamations, with most of the negatives stemming from the processes and timelines: there was a long process of consultation prior to the formal government decision but just days between the formal decision and the creation of the new entity. Respondents highlighted four key weaknesses (and associated lessons):
The change management process was inadequate. There should have been more planning, more notice and more communication.
There was no clear narrative to either staff or affected communities ready on day one, nor repeated consistently as the changes associated with the amalgamation were implemented.
Harmonisation of operational activities such as IT, finance and human resources is needed early.
Leadership and reporting lines require early definition in the change period.
A stronger due diligence process, especially in clinical governance areas, and clearer project methodology and scheduling would have also supported the momentum and flow of the change. This was also identified in another merger study where it was suggested that future mergers create virtual clinical governance and management structures reflecting those that are planned for the new organisation prior to the merger taking place.8 That study also emphasised that engagement of staff and patients in the merger process was crucial, and that the importance of a strong clinical rationale should not be underestimated.
Perhaps not surprisingly, the lessons from the Grampians merger are strikingly similar to those found by others.11,12 The most succinct summary was provided by an Organisation for Economic Co-operation and Development (OECD) review which identified key elements of success for a health services amalgamation as:
Resourcing: to ensure there is adequate staff, technology and time to drive the change.
Funding: adequate funding additional to operational requirements.
Expertise: staff with specific change skills and time to be embedded in the organisation for the lifecycle of the change.
Communication: internal and external communication needs to be solid and real. This needs to include two-way communication that shares in the successes and informs the detail of the change. It needs to sell the ‘why’ and takes people on the journey and to acknowledge the impact particularly on the smaller communities.
Time: there needs to be acknowledgment of the magnitude of the change through allocating adequate time and the use of strong project methodology and sequencing for the change.13
Victorian health services are poised to experience a wave of mergers which might improve care for the affected communities and improve organisational governance and viability. But what this case study shows is that the process of the merger is critical, and that a template of limited planning and almost no time between a decision and its coming into effect is probably not the way to go. Amalgamation certainly can offer a more logical and stronger vehicle to address the universal challenges experienced by all rural and regional health services. Adequate attention, time and funding is required to optimise the success of such a venture.
Ethics
This project was a service evaluation study, not research as outlined in the UK NHS guidance distinguishing research, service evaluation and audit see https://nspccro.nihr.ac.uk/working-with-us/research-service-evaluation-or-audit.
Data availability
The data that support this study cannot be publicly shared due to ethical or privacy reasons and may be shared upon reasonable request to the corresponding author if appropriate.
Conflicts of interest
Rob Grenfell and Sharon Sykes are employees of Grampians Health. Stephen Duckett has no conflicts of interest.
Declaration of funding
The salaries of Rob Grenfell and Sharon Sykes are paid by Grampians Health. No other funding was received.
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