INTRODUCTION Independent Sector Treatment Centres (ISTCs) were created to relieve pressure from Acute Hospital Trusts. In October 2011, an ISTC opened on the grounds of a hospital within the East and North Hertfordshire NHS Trust. Most elective orthopaedic procedures were transferred there. We investigated the effect on productivity of operating theatres working in the ISTC compared with those working in the Acute Hospital Trust (AHT). METHODS A 3-month period of working at the AHT was compared with the same period 9-months later in the ISTC, which were termed 'pre-' and 'post-ISTC' opening, respectively. Data for upper limb (UL) as well as foot and ankle (F&A) surgery were collected. Differences in the number of lists and patients per list constituted usage analyses. Financial productivity was calculated from the latest Payment by Results (PbR) data. A two-tailed Mann-Whitney U-test at a confidence level of 95% was employed to compare costs between groups. RESULTS The UL surgeon undertook 18 lists in both years with 66 patients (pre-ISTC) and 32 (post-ISTC), eliciting a reduction in productivity of 51.5%. There were 13 lists for F&A surgery pre-ISTC with 67 procedures, and 20 lists with 49 patients post-ISTC. Allowing for the difference in the number of lists, a reduction of 52.5% was noted. PbR analyses confirmed productivity of £169,695 (pre-ISTC) and £95,760 (post-ISTC) at a loss of £73,935 for the UL surgeon. F&A data revealed £97,801 (pre-ISTC) and £91,960 (post-ISTC) at a loss of £54,742 when correcting for the difference in the number of lists. There was a combined reduction in potential financial productivity of £128,677 over 3 months or £514,708 over 1 year. DISCUSSION Implementation of the ISTC was detrimental to departmental efficiency, with <50% of the number of patients being treated and a marked reduction in financial productivity.