Published: 20/03/2003, Volume II3, No. 5847 Page 30 31
Foundation trusts will not be truly accountable if their elected representatives are consigned to the margins of decision-making. But, say Rosemary Rowe and Matthew Bond, recent NHS history suggests they may find it difficult to make their voices heard
The government's decision to create foundation trusts as public interest companies independent of Whitehall control has attracted both cautious support and vocal criticism.
1The concept of foundation status, giving managers more freedom over local decisionmaking, has been welcomed as an overdue retreat from the increasing centralism that marked Labour's first administration. Their freedom from Department of Health line management, ability to negotiate local wage agreements, freedom to borrow from the public and private sectors to finance capital programmes, and the reduced burden of inspection and monitoring offer the potential for substantial local autonomy.
However, critics have argued that foundation trusts will create a two-tier system in which elite hospitals obtain resources at the expense of others. It has also been claimed they will trigger wage inflation and inhibit collaboration with other NHS agencies.
The opposition in many ways resembles the clamour that surrounded the introduction of the internal market over a decade ago. Then, as now, hospitals were promised an unprecedented level of autonomy within the health service when they became freestanding trusts. That autonomy was supposed to be matched by constraints to ensure that they pursued the interests of patients and not just organisational or professional concerns. These constraints relied on the discipline of the market, with GP fundholders and health authorities acting as discriminating purchasers of their care.
If foundation trusts are not simply to pursue the interests of their managers or the professionals working in them, what constraints will they face?
Three are immediately visible: the regulatory framework created by Labour, management accountability to local stakeholders through the operation of a board of governors, and market constraints exerted by commissioners in primary care trusts.
Our research into Labour's organisational changes in primary care suggests there are a number of limitations to their ability to ensure that foundation trusts use their new freedoms responsibly.
The governance arrangements of foundation trusts seek to foster greater local accountability through social ownership. Foundation trusts are to be 'owned' by their members: patients, the public and trust staff who live in the area and register to become members.
They will have the right to elect representatives to the foundation trust's board of governors, which will advise and oversee the work of a management board. They will also be able to elect non-executive members to form one-third of the management board.
Research into the ability of non-executive members of PCT boards to hold health providers to account has found that most experienced difficulties in fulfilling this role. Two barriers have been information deficits and lack of legitimacy.
Lay members' lack of familiarity with the established routines of the NHS can be viewed as a considerable asset, enabling them to focus on patients' needs and to challenge traditional patterns of working. Their experience of other areas, such as the private or voluntary sector, can provide a rich source of new ideas.
But providers have tended to use the specialist nature of medical knowledge to safeguard their autonomy and to exclude lay participation from decision-making. PCT non-executive members found their influence remained marginal because strategic decision-making tended to be developed by the professionally dominated executive committee, and accountability processes were determined by the need to comply with criteria established by central regulatory agencies.
Although gaining experience on the job is an important route to acquiring knowledge, it will be essential for foundation trusts' board of governors and lay non-executives to have adequate training in the way the NHS operates. Access to relevant, timely information in an appropriate form will be key to their ability to execute their scrutiny role.
Clinicians and managers will also need to receive training and development to ensure they facilitate lay input. This does not simply mean providing lay members with appropriate information, but developing board processes that will enable lay members to provide strategic input.Without this, there is a danger that, faced with the complexity of the NHS, non-executives will defer to managers and health professionals.
Providers may not feel it is legitimate for lay members to question clinical decisions and managers may consider it inappropriate for them to concern themselves with 'technical' problems. As a result, non-executive members may find themselves dealing only with 'what is left' after professionals and managers have staked out their territory.
In primary care groups and PCTs, lay members' lack of clarity regarding their roles, combined with professional preconceptions, meant many were automatically delegated responsibility for public involvement - a peripheral activity for most PCTs - instead of extending lay influence to the heart of NHS decision-making.
Concerns about the legitimacy of lay views in PCGs and PCTs were exacerbated by confusion about lay members' representative status.
PCG lay members were appointed by the local health authority and PCT non-executives by the NHS Appointments Commission. But they varied in the extent to which they sought to represent the views of their local community.
Those who felt they had a representative role experienced difficulties in accessing a wider range of views, due to the limited extent of public involvement activity.
4The position of foundation trust lay governors and non-executives will be different in that they will be elected - a substantial step forward.
But if lay influence is to be extended, the culture of decision-making will need to change to one that recognises the legitimacy and value of lay views.
And expectations regarding the appropriate sphere of influence of lay members will need to be redefined.
It will be important for the DoH to issue guidance on this or there is a danger that health professionals and managers will expect lay members to assume the traditional non-executive role at the margins of decision making.
The other mechanism intended to ensure local accountability is the work of commissioners. PCTs will need to be able to monitor and ultimately influence the care provided by foundation trusts through their commissioning function.
This assumes that PCTs have adequate information as to the volume and quality of services available from existing and alternative providers and that they have the capacity to use this information to shift their commissioning of services.
But there is considerable evidence that PCT commissioning is not advanced and that they have been slow to influence hospital services.
5Resource allocation within acute hospitals has tended towards a 'black box' approach, with most services being provided by block contract for unspecified activity levels.
PCTs have experienced difficulty in extracting more detailed information from their acute providers.As a result, the bulk of funds have continued to be allocated along historic lines, with PCTs tinkering with new monies.
Healthcare resource groups are being developed for certain procedures, so PCTs will be able to commission these on a quality and volume basis.
However, they will also need to look at the whole budget and see how funds are allocated across services if they are to make significant shifts to commissioning patterns.
Our research indicates that even if such information is available, PCTs have limited capacity for commissioning.Their managerial resources have increased with the abolition of health authorities but their responsibilities are much more extensive.Adequate progress in developing primary and community care, supporting health improvement activities and encouraging the integration of local health and social care must be achieved if they are to continue to engage local stakeholders.
Doubts also remain about the extent of contestability within the commissioning system.
One of the lessons from the 1990s was that the internal market failed because of the impracticality of switching contracts from local providers.
Although the government is encouraging use of overseas and private providers, many acute hospitals continue to hold a natural monopoly.
Without an increase in their commissioning skills and the ability to switch to alternative providers, PCTs will lose any leverage they are supposed to derive from the commissioning function.
Doubts about the legitimacy, knowledge and appropriate role of non-executives may lead to a limited influence of local accountability on the behaviour of foundation trusts. Lack of commissioning capacity and contestability within the system may severely impair the action of market mechanisms.
This suggests that the onus of ensuring that foundation hospitals use their new freedoms responsibly will fall to the regulatory framework with its reliance on national processes of standardsetting and inspection.
The need to meet centrally determined standards and the weaknesses of local accountability mechanisms may mean that foundation trusts will not deliver greater accountability to local stakeholders.
Foundation trusts offer the potential for substantial local autonomy.
Their governance arrangements raise concerns.
Lay non-executives in primary care trusts will face difficulties holding hospitals to account.
1Department of Health. A guide to NHS foundation trusts. The Stationery Office, 2002.
2 Rowe R. The role of the lay member in primary care groups and trusts: do they enhance public accountability? Bristol school for policy studies, 2002.
3Bond M. Nurture not nature.HSJ 2002; 112:30-31.
4.Alborez A, Wilken D, Smith K. Are primary care groups and trusts consulting local communities? Health and Social Care in the Community 2002;10(1): 20-27.
5Goodwin N, Smith J. About the size of it. HSJ 2002; 112(5831): 22-25.
Rosemary Rowe is postgraduate researcher, school for health policy studies, Bristol University. Matthew Bond is primary care fellow, London School of Economics and Political Science.