Accountable Care Organisation (ACO) and Integrated Care Systems (ICS)

NHS England’s 2014 Five Year Forward View (5YFV) and the subsequent Next Steps on the NHS Five Year Forward first introduced the concept of Accountable care organisation (ACOs) and Integrated care systems (ICSs) as an approach to integrate primary and acute medical care in the NHS.

They were cited as a similar model to the Primary and Acute Care Systems (PACS) and Multispeciality community providers (MCPs). Both of these models, MCPs and PACS were precursors to the development of ACOs/ICSs in the NHS. In PACS, hospitals often take the lead in joining up acute services with GP, community, mental health and social care services. The emphasis in MCPs is on GPs working at scale to forge closer links with community, mental health and social care services. Following the publication of 5YFV, NHS England established nine PACS and 14 MCP ‘vanguards’ to trial the models, covering around eight per cent of the population of England.

What are ACOs?

The term Accountable Care Organisations (ACOs) refers to an area-based model of healthcare provision, where a single body takes responsibility for the health needs of its entire population. Although there is no fixed definition of ACOs, most usually include the following elements:

• They involve a provider or, more usually, an alliance of providers that collaborate to meet the needs of a defined population.

• These providers take responsibility for a budget allocated by a commissioner or alliance of commissioners to deliver a range of services to that population.

• ACOs work under a contract that specifies the outcomes and other objectives they are required to achieve within the given budget, often extending over a number of years.

The intention of ACOs is to operate in a more integrated manner than healthcare models that pay per procedure carried out, as well as a greater focus on prevention and health promotion.

What are ICSs?

ICSs would see CCGs and providers (such as NHS trusts, GPs and community healthcare providers) within a Sustainability and Transformation Partnership (STP) area working together to manage funding for their defined population.

The major difference between ACSs and ICSs is that with ACOs “there will be a single contract with a single organisation for the majority of health and care services in the area.” ICSs also involve CCGs as commissioners, getting them to work more closely together with providers such as NHS trusts and GPS, to plan care for their populations. ACOs however only integrate providers, with no formal role for CCGs.

What are the main forms of integrated care?

There are three main forms of integrated care:

•            Integrated care systems (ICSs) have evolved from STPs and take the lead in planning and commissioning care for their populations and providing system leadership. They bring together NHS providers and commissioners and local authorities to work in partnership in improving health and care in their area.

•            Integrated care partnerships (ICPs) are alliances of NHS providers that work together to deliver care by agreeing to collaborate rather than compete. These providers include hospitals, community services, mental health services and GPs. Social care and independent and third sector providers may also be involved.

•            Accountable care organisations (ACOs) are 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. This organisation may subcontract with other providers to deliver the contract.

ICPs are at various stages of development across England and ICSs have been established in ten areas, two of which – Greater Manchester and Surrey Heartlands – are part of the government’s devolution programme.

Why are these controversial?

The language of accountable care originated in the United States at the time of President Obama’s health care reforms, and its use in the NHS has raised concerns that it could result in health and care services coming under the control of private companies. However, if ACOs are established in the NHS, they will be a means of delivering care and not funding it. The principles of a universal and comprehensive NHS funded through taxation and available on the basis of need and not ability to pay will not be affected.

The proposed ACO contract could result in more NHS services being managed by private companies but this seems unlikely to happen in many cases because:

The experience of Hinchingbrooke Hospital in Cambridgeshire, where the private company, Circle, had to hand back its contract to provide NHS services because of insufficient funding suggests that there are limited opportunities to generate profits from NHS contracts. This is not surprising when deficits are endemic among NHS organisations following several years of austerity. It is hard to envisage how private companies would perform better financially than NHS organisations when they would be taking responsibility for the services provided by these organisations if they competed successfully for an ACO contract.

Rather than opening up the NHS to increased privatisation and competition, as some have claimed, these developments are likely to have the opposite effect. The vestiges of market-based reforms remain, but they have taken a back seat as the need for NHS commissioners and providers to work together to make decisions on the use of resources has been given higher priority. The risk this creates is the possibility of legal challenges from private companies who feel that commissioners are not using competitive procurement as required under the law and instead are keeping contracts within ‘the NHS family’.

Why is the change needed?

NHS is under severe pressure due to rising demand and funding constraint. It has been clear for some time that simply working our current hospital-based model of care harder to meet rising demand is not the answer. Rather, the NHS needs to work differently by providing more care in people’s homes and the community and breaking down barriers between services. The NHS also needs to give greater priority to the prevention of ill health by working with local authorities and other agencies to tackle the wider determinants of health and wellbeing.

This aim is being pursued through the new care models, STPs and the evolution of some STPs into integrated care systems. These developments hold out the promise of a different way of working in the NHS with an emphasis on places, populations and systems. Successful integrated care systems will take more control of funding and performance with less involvement by national bodies and regulators.

Will these changes lead to cuts in NHS budget?

While financial issues are very important, it would be wrong to see these developments as a means of the NHS balancing its books. Recognising that the NHS is required by parliament to keep within its spending limit, and that this is proving difficult, these developments are primarily about improving health and care, and in so doing seeking opportunities to deliver its financial objectives. Integrated care and population health should not be expected to save money but have the potential to enable resources to be used more effectively.

This is an attempt to give local leaders more control over the use of the collective resources at their disposal, thereby enabling them to back the ambitions set out in STPs with flexibility to move money around.

What has this way of working achieved?

Early evidence from the new care models suggests some progress is being made in moderating rising demand for hospital care.

Data collected by NHS England, for example, shows that PACS and MCPs in aggregate have seen lower growth in per capita emergency admissions to hospitals than the rest of England. Some new care models have reported absolute reductions in emergency admissions per capita.

What do these developments mean for commissioning?

One of the consequences of these developments is that the commissioner/provider split that has underpinned health policy since the early 1990s is unravelling. Providers and commissioners are working together to establish ICPs and ICSs. Clinical commissioning groups (CCGs) are either merging or agreeing to collaborate and are working closely with local authorities in many areas to develop joint or integrated commissioning.

Commissioning in the future is likely to make use of longer term, outcome-based contracts. The current system of Payment by Results, which was designed for an environment in which choice and competition predominated, will then be superseded, in many cases, by population-based budgets. Commissioning will become more strategic and concerned with the funding and planning of new models of integrated care rather than the annual contract round that has added little value to the NHS in recent years. Commissioners will have a key role in holding providers to account for delivering outcomes agreed in contracts.

What next?

The NHS long term plan released in Jan 2019 commits that By April 2021 ICSs will cover the whole country, growing out of the current network of Sustainability and Transformation Partnerships (STPs). ICSs will have a key role in working with Local Authorities at ‘place’ level and through ICSs, commissioners will make shared decisions with providers on how to use resources, design services and improve population health (other than for a limited number of decisions that commissioners will need to continue to make independently, for example in relation to procurement and contract award). Every ICS will need streamlined commissioning arrangements to enable a single set of commissioning decisions at system level. This will typically involve a single CCG for each ICS area. CCGs will become leaner, more strategic organisations that support providers to partner with local government and other community organisations on population health, service redesign and Long Term Plan implementation.



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