We describe a complex merger and development process that was implemented mainly as planned. We have observed a shift from in-patient to day treatment, an increase in productivity and an improved financial situation, while employee satisfaction remained at a high level at the end of the restructuring period. A temporary decline in activity occurred and waiting times for patients with somatic disorders increased, but in other respects the quality indicators pointed to unchanged or improved quality.
Our review of the literature on hospital mergers showed that cost reductions of ten per cent can be achieved (3). The restructuring process in the University Hospital of North Norway was implemented without supplementary funding. The gradual improvement in the financial situation indicates that the cost reductions outweighed the costs incurred by the restructuring process at all times. We estimated that the measures for cost reductions directly accounted for NOK 106 million (20 per cent of the improvement). In addition, the process is assumed to have had effects in the form of increased cost awareness, improved financial management and economies of scale. If we assume that 50 per cent of the improvement in financial performance can be ascribed to the merger and development process, this will amount to NOK 265 million, or six per cent. This is less than the possible effect foreseen, but still sufficient to allow the hospital to undertake large investments, such as a PET centre, new construction to increase capacity in the functions as a regional and university hospital, a new patient hotel and – in the somewhat longer term – a new local hospital.
We observed a temporary increase in waiting times, but the quality of treatment of patients remained stable or improved. One could imagine that lower costs would result in reduced quality. Chen at al. (8) studied 800 000 patients treated in 3 000 hospitals in the US, but found no correlation between costs and treatment outcomes. This concurs with our experience, as well as with a comprehensive body of literature indicating that cost reductions and quality improvements can be achieved when organisational changes are accompanied by improvements in clinical pathways (6, 9) – (11). We cannot exclude, however, that the quality standard of the University Hospital of North Norway has declined in areas that are not covered by our enterprise data.
There is scant research on change processes in hospitals, but a consistent finding is that problems are quite common, and in a transitional phase these may reduce the capacity and the quality of treatment provided to patients (12, 13). The main cause is a shift of attention from professional development to organisational development (14). Change processes can be subdivided into a rationalisation phase involving requirements for financial balance, a consolidation phase during which the organisation is redesigned, and a renewal phase when focus is returned to the core activities (15). If a long period of time elapses before the renewal phase starts, the risk of problems increases. We describe a change process that followed this pattern, proceeding at a rapid pace and with overlap between the phases. We combined the organisational changes with an improvement in clinical pathways, and we believe that this was crucial to maintain a focus on patient care (7).
Our observational study cannot identify any possible causal correlations between the organisational changes on the one hand and the level and quality of the core activities on the other. The authors are not independent observers, and this may have coloured our interpretation of possible correlations. Several methodological weaknesses can be pointed out. Changes in the database structure after the merging of EPR/PAS, the method for data extraction to the Norwegian Patient Registry and the activity-based funding (ISF) may have had an impact on figures for activities, waiting times and DRG points. The number of publications may be a flawed measure of research activity. Changes have been made to the registration routines and the definitions used by the quality indicators, and no indicators were available for mental healthcare and inter-disciplinary specialised addiction therapy. The number of man-months is influenced by sickness absence and new job tasks. Real growth in the budgets as well as changes in the activity-based funding, the regional revenue model, pension costs and rules for capital depreciation have contributed to the improvement in financial performance, but these effects cannot be isolated in the accounts. We have considered adjusting for these factors, but this would require an exclusion of large parts of the data base and entail a loss of the overall impression.
West (16) has summarised the challenges involved in research on change processes in hospitals. She emphasises the need for longitudinal studies with variables that can control for composition of the patient population as well as organisational and socio-economic aspects associated with the organisation, and the need for standardised measurements of the quality of patient care. The Norwegian Patient Registry and the national clinical quality registers are currently introducing person-specific registrations. Such data ought to be used for studies of the correlations between forms of organisation and restructuring in hospitals and treatment outcomes.