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The Dalton Review identified organisational forms to help support delivery of high quality care, including for delivering new models of care such as the Forward View’s PACS and MCP models.
It is important to understand that there are different ways of describing the organisational forms set out in the Dalton Review and that they are not legally defined terms. The main differentiating factor between the different options is the extent of organisational integration involved. At one end of the spectrum are loose collaborations – for example ‘buddying’ arrangements – while at the other end are consolidations involving changes in ownership – for example mergers and acquisitions.
There is no ‘right answer’ to the question of which organisational form best suits a particular model; the much-quoted ‘form follows function’ really is true here.
All of these organisational forms can be established by one of three legal models:
- Contractual joint venture in which participating parties enter into one or more contracts with each other
- Corporate joint venture in which participating parties create a new jointly-owned independent legal entity to carry out services on their behalf
- Merger or acquisition in which one party acquires the assets and liabilities of one or more other parties
Broadly speaking, contractual joint ventures involve less integration and are easier and quicker to deliver than corporate joint ventures and mergers, but corporate joint ventures and mergers allow for more formal consolidation and independent brand identity.
Another organisational form to consider is that of the mutual or social enterprise. Although this form is about transforming existing organisations, rather than setting up new care models, it may be of interest for organisations wishing to consider new ownership and governance models to drive improved staff engagement and productivity. For example, it could allow staff, the public and community stakeholders a degree of ownership of the organisation.
Choosing the right organisational form – key questions
- Based on the extent of organisational integration that may be permissible or desirable for your organisation, and the model of care you are trying to deliver, which organisational form and legal model best meets your needs?
- Do you have the legal powers to enter into or set up the organisational form and legal model in your preferred way?
- How quickly do you want to set up your model, recognising that some organisational forms and legal models may require the establishment of new corporate bodies, transfers of services and assets and due diligence on potential risks and liabilities?
- Do you have the resources and skills to implement your chosen organisational form and legal model?
- Are there any cultural issues within your organisation you need to address to make these changes?