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What are Accountable Care Organisations (ACOs)?

ACOs have caused a major stir, but what actually are they, and how will they affect the NHS?

Constraints on NHS funding and rising demand from a growing and ageing population have put the NHS under enormous pressure. The response requires the NHS to work differently by breaking down barriers between services, to integrate care around people’s needs and to place greater emphasis on the prevention of ill health.

Developments in integrated care are taking different forms. A variety of terms are used to describe these arrangements and they are often used interchangeably, leading to confusion. Integrated care systems (ICSs), previously known as accountable care systems, bring local NHS organisations and local authorities together to plan and commission care for their populations and provide overall system leadership. 

They evolved from sustainability and transformation partnerships (STPs), which were introduced across the country in 2016, but are more advanced in their ability to work collaboratively and are given more freedom by the NHS to decide how they manage resources. At the same time, groups of providers of NHS services are also coming together in many areas to integrate the way that care is delivered. This may include hospitals, community services, mental health services and GPs, as well as social care and independent and third-sector providers in some cases. We refer to these as integrated care partnerships, and the areas they cover are usually smaller than those covered by an ICS. 

Accountable care organisations (ACOs) are a more formal version of integrated care partnerships that could be established when commissioners award a long-term contract to a single organisation to provide a range of health and care services to a defined population following a competitive procurement. NHS England is developing a new contract to be used by commissioners wishing to go down this route, but ACOs do not yet exist in practice. Nevertheless, these developments have been met with some concern and prompted two separate legal challenges. 

Why are ACOs so controversial? 

Two key factors have driven these concerns. The first is that the language of accountable care originates in the United States, raising concerns that ACOs signal a move to an “American-style system”. But these concerns are largely unfounded. The aspect of ACOs that has been adopted from the US is the idea of holding providers to account for improving outcomes for a defined population. Other elements, such as who pays for care and delivers it, would not be copied from the US. The principles of a universal health system, funded through taxation and available on the basis of need to pay, wouldn’t be affected.

The second factor is that the proposed contract would involve the use of competitive procurement, raising concerns that this would allow private companies to compete to deliver NHS care. In practice, public-sector providers are more likely to be awarded these contracts, as a successful bidder would need to demonstrate that they have the capability and experience to deliver a wide range of NHS services, and that other local providers – including GPs – are willing to work with them. The area furthest ahead in its plans to use the contract, Dudley, has identified two NHS trusts as the preferred providers. However, these arguments offer little reassurance to those who doubt the capability of commissioners to manage procurements of this nature or the motivations of some providers. 

In response, NHS England has decided to delay the use of the proposed ACO contract, and this offers an opportunity to listen to the concerns of campaigners and communicate why the contract is needed. At The King’s Fund we have argued that much more needs to be done to explain what the contract would add to existing ways of integrating care and, indeed, whether it is needed at this stage in the development of integrated care.

Progress in integrated care systems

Ten areas have been selected by NHS England to lead the development of integrated care systems and they have been working to put in place the structures that are needed for an ICS to work. For example, they are forming boards, appointing leaders to oversee their systems, and making agreements to share money and responsibility for performance. They’ve also been working to change and improve how care is delivered, for example by introducing multi-professional community teams to support older people in the community and avoid unwanted hospital admissions.

Recent guidance from the national bodies makes clear that ICSs will become increasingly important in planning services and managing resources in the future. The areas that are operating in this way will be given increasing freedom over how they manage their resources, and other systems will soon be joining the programme if they can demonstrate their readiness to do so. 

What does all this mean for the future of the health system?

This represents a different way of working for the NHS with an emphasis on places, populations and systems rather than organisations. It marks a shift away from policies that have encouraged competition and towards an approach that relies on collaboration between the different organisations delivering and paying for care.

Working in this way is not easy in the context of the Health and Social Care Act 2012, which was primarily designed to promote competition. Changes in legislation will be needed to bring the statutory framework into line with the priority being given to integrated care, but there is no prospect of this happening in the short term because the government lacks a working majority and Brexit is dominating the timetable. 

Integrated care is not a panacea and national and local leaders will need to be realistic about the time it will take for these developments to deliver results. They will not remove the significant operational and funding pressures facing the health and care system in the short term. However, The King’s Fund believes the development of integrated care systems should be supported, as they offer the best hope for the NHS and its partners to provide the integrated health and care services required to meet the needs of the growing and ageing population now and in the future.


Anna Charles is senior policy adviser at the King's Fund. 

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My constituency needs more doctors - a new medical school will help

Boston and Skegness will get one of the five medical new schools recently announced by the government. 

Boston and Skegness is the constituency that – infamously – voted more vigorously than anywhere else to leave the European Union. More than three-quarters of voters turned out for the referendum, and 76 per cent of them wanted to leave. What was the specific reason cited most often for doing so? 

It was either “I can’t get an appointment at my GP”, or “A&E is full to burst”. These answers were proffered as an example of the pressures stemming from immigration, because the lens through which Brexit was seen on the ground was as often as not, the NHS. No wonder, then, that big red bus was so powerful.

On talking to local NHS staff, however, it wasn’t immigration per se that had challenged the system most profoundly: it was the difficulty in recruiting staff to rural and coastal Lincolnshire, and it was the blessing of a population that is living longer and longer. Some pointed out that prior to the surge in immigration, the less and less used maternity unit at Boston’s Pilgrim Hospital was on a trajectory that would have threatened closure as it would have become harder to run safely. Hugely dedicated local NHS staff were being put under increasing pressure, and ultimately the limited number of doctors training in the system were more likely to go to larger hospitals where opportunities to teach or specialise were hugely attractive.

So from even before I was elected in 2015, and well before the referendum, it was obvious that Lincolnshire needed a radical shot in the arm to alter patterns of recruitment for doctors. That, said the universal consensus, was a medical school based in the county.

Still, it was truth be told a campaign I signed up to lead in Parliament with little genuine hope of success. Most recently, in every departmental Health Questions in the Commons, it felt as though every MP in the place stood up solely to say that their constituency deserved a slice of the government’s plan to increase medical school places by 1,500.

The government’s criteria, however, did dictate that it was places that were “under-doctored” that would be given a first look at the new scheme, and there was a particular focus on increasing GP and mental health services. All these the Lincoln University bid did, and by signing up to do the scheme jointly with the well-established Nottingham University Medical School a good deal of bureaucracy was cannily avoided. It was rightly not enough to say that Lincolnshire needs more doctors. Doctors tend to practice near to where they train; ergo we get a shiny new facility. Knowing that Lincolnshire fitted government criteria so well, I was conscious that the role of a local MP must surely be to make sure the bid accurately reflected that reality.

Some 6,000 medical students start their training each year, and Jeremy Hunt’s 25 per cent expansion of that number by 2020, hand in hand with a similar expansion in nursing training, is a transformational exercise for the NHS. It addresses the long-term deficit in doctors that we’ve locally sought to plug with overseas recruitment and a £20,000 golden handshake for GP trainees, and demonstrates that for all the talk of the NHS needing increased investment, the challenges don’t simply require extra cash. Indeed, with more doctors in the system there are likely to be lower bills thanks to fewer locums with their higher wages, and less stress on the existing workforce resulting in sickness and absence. It’s a classic case of investing to save. And on the way there’s a commitment to increase the diversity of medical students, attracting more applicants from state schools and making the typical doctor look a little and sound a bit more like the typical patient.

So alongside Lincoln, Sunderland, Lancashire, Chelmsford and Canterbury each get new medical schools, while other existing ones expand. All this, of course, is only possible if there is the money to fund that expansion, and Conservative stewardship of the economy has delivered that. These are announcements that defy the accusation that the government is consumed by Brexit, and indeed, they also address concerns that leaving the European Union might further challenge recruitment. That, in truth, remains to be told but inarguably expanding medical schools can do no harm. 

Speaking personally, however, there’s a second truth: voters routinely tell their MPs that we achieve nothing for the man or woman on the street, and rural areas each claim to be forgotten counties. Every one of these new medical schools demonstrates not only genuine commitment to the NHS from this government, but also the fruits of huge coalitions of MPs, healthcare professionals, university staff and others, all making a single, local case to Whitehall. This is a plan that will take a number of years to bear fruit, but it is also one that will last for generations – and it’s an example of long-term thinking on healthcare from public servants across the board. More of that, hopefully, is to come soon.


Matt Warman is the Conservative MP for Boston and Skegness.