The idea of foundation hospitals comes from not-for-profit healthcare organisations in the US and in Europe. They are intended as something called a public benefit corporation based on the model of Alcorcon in Madrid, which is owned by the state but run by private management, reported by The Guardian to have impressed then health secretary Alan Milburn.
Milburn’s replacement John Reid had the difficult task of forcing the relevant legislation – the health and social care (community health and standards) bill – through parliament despite a backbench revolt which led to a mere 17-vote government majority and with the assistance of a number of last minute concessions.
There may be little indication to the outsider of a health trust having acquired foundation status. Some foundation trusts could set their own local targets based on local needs, which might make any change more obvious.
Who gets foundation status:
● it will be offered to all trusts before 2010
● eventually primary care trusts will be able to achieve foundation status
● so far only those trusts which have scored three stars in the annual star ratings for hospital performance have been invited to apply for foundation status
● the first foundation trusts have shown
- high clinical standards
- top quality leadership
- sound finances
- a high level of patient responsiveness
- sound safety standards
- evidence of staff and community support
Advantages of foundation hospitals:
● ministers emphasise the level of community involvement in foundation hospitals. Local people, staff and patients and even carers can become “members” of a foundation trust. Members will be able to elect a board of governors which in turn chooses the board of non-executive directors. However operational control will remain in the hands of the board of directors, not the governors.
● freedom from central control including the right to manage their own budgets.
● new powers as far as raising money, such as being able to keep any proceeds from the sale of assets and land; and they can raise money on the open market - e.g. take out loans from banks.
● any surpluses from these dealings are to be used to boost patient care, and should therefore theoretically act as an incentive to keep costs down.
● will be able to pay staff over and above nationally agreed terms and conditions.
Disadvantages of foundation hospitals:
● Opponents of foundation trusts insist they will be divisive by creating a two-tier system in which the NHS elite will get more resources at the expense of failing hospitals, so making health inequalities greater.
● the freedom of foundation hospitals to pay more will lead to them poaching staff from other local hospitals
● foundation status for NHS hospitals is a form of denationalisation, with such trusts increasingly going their own way
● foundation status may be the first step to privatisation of the NHS. The break-up of the NHS into locally-owned and government foundation bodies may make them susceptible to privatisation in future
● provision was made in a little-noted paragraph of the bill for private companies and charities to apply to acquire foundation status – ostensibly so that hospices can get foundation status
● foundation trusts can set up their own arrangements for governance which means there is likely to be substantial variation between different foundation trusts
● early indications show low levels of involvement by the local community; consultation meetings have been poorly-attended and many members of local communities have receive no communication whatsoever from prospective foundations
● the NHS has no experience of running elections for governors, and those for foundation trusts are likely to be complex with some governors on the boards of different foundations
Accountability:
● Foundations will be accountable to local stakeholders – for example patients and staff might be governors
● Foundations will be inspected by the commission for healthcare audit and inspection
● performance contracts agreed with primary care trust commissioners will set out local standards and targets
● a powerful independent regulator
(The Guardian)
Footnote: Flagship NHS hospitals failing
Bradford Teaching Hospitals NHS Foundation Trust adopted foundation status on 1 April 2004, and even though it is one of the first foundation NHS trusts is facing official intervention after recording a budget deficit of around £4 million GBP per annum.
(BBC News)
● the Alcorcon Hospital which provided the inspiration for Milburn’s enthusiasm for foundation hospitals, has met many problems in Spain. In 2000 the hospital had recorded 13,069 complaints, the highest number in Spain. While the official figures for 2002 and 2003 - at 921 and 1,009, respectively - are much lower, local unions maintain that the records are being fudged and that complaints are still rife.
● A recent report by the Federation of Associations for the Defence of the Public Health Service showed that foundation hospitals sent the most costly and difficult patients to nearby institutions; they also offered fewer services and fewer beds.
● They also complained that Alcorcon was short-staffed and that staff, some of them on casual contracts, were being forced to work long shifts
● Soon after the hospital was built Rafael Simancas, the Socialist candidate to lead the Madrid regional government, pledged as part of his campaign manifesto to turn Alcorcon back into a public hospital, amid accusations that Alcorcon is keeping closed 90 beds at the hospital closed - presumably, in
