Comment

08.03.16

Accountable care organisations: the future of the NHS?

Source: NHE Mar/Apr 16

Robin Miller, senior fellow, and Professor Judith Smith, director, from the Health Services Management Centre at the University of Birmingham, consider the future potential for accountable care organisations in the NHS.

The accountable care organisation (ACO) is often vaunted by US commentators as the ideal way to align the motivations and interests of health funders (commissioners in an NHS context) and providers. The underlying theory is that if you give a population-based budget to a provider organisation or group of organisations and require them to deliver a set of specific health outcomes for their registered population, they will be incentivised to a) keep people as healthy as possible to decrease overall use of healthcare services, and b) minimise the use of high-cost hospital-based care by ensuring effective community-based provision. 

The ACO model was introduced in the US through the Affordable Care Act 2010, with two accompanying programmes for those people accessing government-funded health services through Medicare or Medicaid. The programmes included the US Pioneer Programme in which the ACO was deemed to be accountable for financial losses as well as gains, and the Shared Savings Programme in which ACOs could split savings with the funder, but do not initially have to bear any losses. 

There are various structures to be found under the ACO banner, including group practices (as per UK general practice super-partnerships), networks across acute and primary care providers, and chains of hospitals working with local primary care and nursing homes. Key to the ACO model is a capitated payment system and the opportunity for the partners to retain any savings that they achieve. Such payments are dependent on the ACO achieving a rigorous set of quality and outcomes metrics that incorporate patient experience, patient safety and preventative care. 

New forms of integrated care in the NHS

Given the strong policy interest in bringing about improved integration of care within the English NHS – across mental and physical care, health and social services, and hospital and community – the ACO appears to hold promise. It could in principle provide an organisational form that draws together previously siloed or competing providers into a network or joint venture with a shared sense of purpose and financial interest. Within the New Models of Care Programme established by NHS England, in order to take forward the ideas set out in the Five Year Forward View, there are three ‘Vanguard’ schemes that have stated their intention to explore the potential of the ACO as an organising structure. These Vanguards (Northumbria, Northamptonshire and Salford) plan to bring together the organisations responsible for acute hospital care, general practice, mental health, social care, ambulance services and pharmacies. They hope to achieve better productivity, improved outcomes and (in the case of Northumbria) address health inequalities. 

A further accountable care network for cancer services is being established between the Royal Marsden NHS FT, The Christie NHS FT and University College London Hospitals NHS FT. The possibility of an ACO arrangement is also being explored in other localities outside the Vanguards programme. 

Will ACOs work in the NHS? 

ACOs are still relatively new in the US, and emerging evidence from evaluations has been described as limited, in regards to both cost and quality. All the original US Pioneers reported that they were achieving the required quality targets and most had lower hospital readmission rates than comparator areas. However, whilst just over half of these ACOs have generated savings for their funder, the others had come in with losses. This led Shortell et al 2014 to surmise that there is ‘need for caution in claiming too much for ACOs… progress to date has been mixed and there needs to be realism about the hard work and time it will take for this approach to demonstrate measurable benefits’. 

That said, some ACOs have been able to report impressive improvements in both outcomes and efficiency, and the model does incorporate a number of the components known from research evidence to help achieve service integration at scale. These include a range of professions and services to respond to the diverse needs of a population; an emphasis on quality as well as efficiency; the financial incentive for providers to act holistically and collaboratively; and flexibility to create different organisational forms depending on local circumstances, history and opportunities. 

NHS in Northumberland

Is the ACO a development to be welcomed? 

The ACO clearly has attraction as an organisational form that can draw together previously disparate acute, primary and social care providers into a new network or body that can focus on delivering integrated care. There is a need, however, to beware  of placing too much faith in the ability of an organisational form to change actual function or delivery of care. We know from the wider body of research into change that organisational form is just one (and an unreliable one at that) factor in enabling new forms of integrated care. 

The evidence shows that there is no guarantee that it will encourage the clinical leadership, attention to IT and data, development of new clinical processes, establishment of learning culture, and effective patient and community engagement that are key ingredients of positive and sustainable improvement. These ingredients are typically much harder to bring about than the putting in place of a new organisational form, albeit that the new organisation is often what attracts and preoccupies managers. Even if the Vanguard ACOs in the NHS prove successful, it is highly unlikely that such a model would work in areas without previous good experience and understanding of partnership working or careful and dogged attention to the practical aspects of integrated care. 

We also need to be realistic about the scale of the task that would face an ACO holding a sizeable proportion of the NHS and adult social care budget – over the course of a contract lasting, say, seven years, this could amount to billions of pounds, and there must be questions to pose about the current ability of providers to manage and distribute this level of funding. 

Finally, ACOs call into question the future role of local commissioning in the NHS. If ACOs take hold within the new ‘footprints’ of Sustainability and Transformation Plans, which are intended by NHS Improvement to enable effective local NHS planning, it would seem that the current network of CCGs will need to be pruned back to a smaller number of regional funding bodies that hold contracts with ACOs or other provider networks. 

Whereas former health secretary Andrew Lansley intended a competitive NHS market based on clinically-led CCGs contracting with local (or other) providers, we seem to be moving towards a more managed and planned local approach. The challenge for the NHS is to ensure that the excitement of a new organisational form, such as the ACO, does not detract from the tough business of bringing about integrated care on the ground.

Tell us what you think – have your say below or email opinion@nationalhealthexecutive.com

Comments

Tony Sloane   30/12/2016 at 11:06

Struggling to understand the need for an all singing new model which I currently without a significant evidence base (#Key Word - Evidence). Some of the current challenges arise specifically from siloing of community, acute, etc services. That isn't rocket science, and was, I believe, predicted during previous restructurings. By all means re structure, bu don't jump on a bandwagon! (Oh, nd get rid of the Health Sec who doesn't actually believe in the NHS😊)

Allan Cairns   18/01/2018 at 13:34

I've read the article and I see that a number of the schemes already in place in America are failing to show savings in fact they are showing losses. As the NHS is already underfunded wouldn't it be better not to employ more beurcrats and pen pushers and spend my money and every other tax payers money on what we want a working fully staffed NHS.

David Y   21/01/2018 at 10:09

This proposed system will yield most profit for commercial organisations incentivised to ration patient treatment by the contract they have signed - so patients suffer - if on the other hand these organisations fail to make profit and fail, what is the safety net? Either services will cease (patients suffer) or government has to bail out (taxpayer) - surely the right system for the NHS and care homes is a ' not for profit' model to put a stop to the currently accelerating privatisation being driven by Hunt.

Margaret P   02/02/2018 at 12:47

Time for everyone to wake up and check out the accountability of the ACOs. This is being put to the CCGs in Kent soon who will no doubt have to kow tow to Simon Stevens will so is a fait accompli. Goodness knows how much the Strategic Commissioner's salary will be but we're being told the plan is care closer to home but commissioning is obviously going to be delivered from afar. Just like the Carillion, Capital & G4S there is no way contractors' quality or quantity can be relied on, so hopefully that has been a wake up call for all concerned in this sorry 'market led' initiative and would urge those of a like mind to support Stephen Hawking's efforts to get a judicial review.

Add your comment

 

national health executive tv

more videos >

latest healthcare news

NHS at 72: Managing mental health services going forward

03/07/2020NHS at 72: Managing mental health services going forward

Sean Duggan, Chief Executive of the Mental Health Network Let’s take this opportunity to reflect on the amazing achievements of our he... more >
Government issues £16m funding to speed up life-saving diagnoses

03/07/2020Government issues £16m funding to speed up life-saving diagnoses

Patients may be set to receive earlier and more accurate diagnoses for potentially life-threatening diseases such as cancer and Crohn’s dis... more >
Telecoms deal benefits half a million NHS frontline workers

03/07/2020Telecoms deal benefits half a million NHS frontline workers

Almost 500,000 NHS frontline staff in England have benefited from mobile and fixed broadband offers to stay connected at work during the cor... more >

the scalpel's daily blog

NHS at 72: Managing mental health services going forward

03/07/2020NHS at 72: Managing mental health services going forward

Sean Duggan, Chief Executive of the Mental Health Network Let’s take this opportunity to reflect on the amazing achievements of our health system over the past few months. But as we recognise the best of the NHS and its response to the Covid-19 crisis we must not forget that for mental health the peak has yet to come. Covid-19 has placed enormous pressure on the entire health and care system. Despite the very real hardships f... more >
read more blog posts from 'the scalpel' >

interviews

Matt Hancock says GP recruitment is on the rise to support ‘bedrock of the NHS’

24/10/2019Matt Hancock says GP recruitment is on the rise to support ‘bedrock of the NHS’

Today, speaking at the Royal College of General Practitioners (RCGP) annual conference, Matt Hancock highlighted what he believes to be the three... more >
NHS dreams come true for Teesside domestic

17/09/2019NHS dreams come true for Teesside domestic

Over 20 years ago, a Teesside hospital cleaner put down her mop and took steps towards her midwifery dreams. Lisa Payne has been delivering ... more >
How can winter pressures be dealt with? Introduce a National Social Care Service, RCP president suggests

24/10/2018How can winter pressures be dealt with? Introduce a National Social Care Service, RCP president suggests

A dedicated national social care service could be a potential solution to surging demand burdening acute health providers over the winter months,... more >
RCP president on new Liverpool college building: ‘This will be a hub for clinicians in the north’

24/10/2018RCP president on new Liverpool college building: ‘This will be a hub for clinicians in the north’

The president of the Royal College of Physicians (RCP) has told NHE that the college’s new headquarters based in Liverpool will become a hu... more >

last word

Haseeb Ahmad: ‘We all have a role to play in getting innovations quicker’

Haseeb Ahmad: ‘We all have a role to play in getting innovations quicker’

Haseeb Ahmad, president of the Association of the British Pharmaceutical Industry (ABPI), sits down with National Health Executive as part of our Last Word Q&A series. Would you talk us th... more > more last word articles >

editor's comment

26/06/2020Adapting and Innovating

Matt Roberts, National Health Executive Editorial Lead. NHE May/June 2020 Edition We’ve been through so much as a health sector and a society in recent months with coronavirus and nothing can take away from the loss and difficulties that we’ve faced but it vital we also don’t disregard the amazing efforts we’v... read more >

health service focus

How NHS Property Services adapted to a new way of working

01/07/2020How NHS Property Services adapted to a new way of working

From May/June 2020 edition Trish Stephen... more >
Cleaner, greener, safer media: Increased ROI, decreased carbon

12/06/2020Cleaner, greener, safer media: Increased ROI, decreased carbon

Evolution is crucial in any business and Nati... more >