Have the greater freedoms given to Foundation Trusts in the NHS made any difference to their performance? Hot on the heels of the Wanless Report, the University of York’s Centre for Health Economics has set out to answer that $64,000 question in a fascinating policy document published on 25th September.

One of the Government’s flagship ‘big ideas’ Foundation Trusts have been being phased into the English NHS since 2004. The Department of Health predicts that there will be about 170 acute and specialist hospitals with Foundation Trust status by the end of 2008.

According to the Department’ enthusiastic prose ‘The introduction of NHS Foundation Trusts represents a profound change in the history of the NHS and the way in which hospital services are managed and provided.’

But do they really do what it says on the tin?

In the latest issue of Health Policy Matters (13), the Centre for Health Economics compared the financial performance of Foundation Trusts and non-Foundation Trusts. It analysed performance before and after the creation of Foundation Hospitals in respect of their retained surpluses and their relative cost differences.

In fact they found that there are indeed significant differences in the performance of Foundation Trusts and non-Foundation Trusts - but it appears that those differences are long standing and not the result of any change in status. There is a difference of about eight percentage points in relative costs of FTs and non-FTs, but this was true both before and after the reforms.

A surprise result? Not to seasoned NHS watchers. The underlying idea of Foundation Trusts was to ease off the reins of central management and to permit favoured Trusts significantly more autonomy. To become a Foundation Trust in the first place however existing Trusts were required to demonstrate an above average degree of competence.

Inevitably, these selected for Foundation status were already performing better than the average – and all that now appears to have happened is that the pre-existing differentials have been maintained. Higher pay for senior managers inevitably influenced Trust Boards’ enthusiasm for Foundation status quite beyond the certainty of any other benefit.

Ironically, although the creation of Foundation Trusts may not have made any significant difference to financial performance, the Centre for Health Economics report concludes by pointing out that the reduced need for Foundations to provide financial data may make such comparisons impossible to make in the future.

The full paper can be accessed electronically at http://www.york.ac.uk/healthsciences/pubs/hpm13final.pdf

By Steve Ainsworth