Implications of ‘accountable care’

 In case you’ve not read our pages on Accountable Care Organisations (ACOs) and Accountable Care Systems (ACSs), these are radical new ways of delivering care being introduced at breakneck speed: a number of service providers work together over a set period (e.g. 15 years) to take responsibility for the cost and quality of a specified range of health services for a defined population and for a fixed sum (a ‘whole population budget’).

An ACS is an evolved version of a ST Partnership with responsibility for the health and resources for a defined population. Existing commissioning contracts remain in place. Commissioners, such as Clinical Commissioning Groups (CCGs), together with a network of providers across different services, enter into an alliance agreement and commit to managing resources together, along with agreeing governance arrangements and the sharing of risk and gain.

In contrast, with ACOs, there is a single contract that establishes an organisation (either an existing or new organisation) that takes responsibility for deciding how to allocate resources and design services. It acts as a lead provider that can set up a series of sub-contracts with other providers.

Some of the issues raised by Accountable Care 

In the following, we use the term ‘accountable care system’ (i.e all lower case) where the issues raised relate to both ACOs and ACSs. Otherwise, where the issues are specific to just one of the forms of accountable care, we use ‘ACO’ or ‘ACS’, as relevant.

Accountable care systems are in breach of the NHS Constitution: The introduction of accountable care has been dominated by NHSE’s drive for ‘efficiency savings’. Organisations within an accountable care system collectively agree to provide services to registered patients for a fixed budget, irrespective of the care that is actually provided, or needed by patients: even with minimum delivery standards in place, these whole population budgets provide an inducement to offer as little care as possible to minimise costs. This approach contravenes the first two principles of the NHS – to provide a comprehensive service, available to all, on the basis of need.

Accountable care systems have no legal standing:  Despite the hugely significant changes being made following the 5YFV, the statutory framework of the NHS remains the same: substantial changes to the NHS are now brought about by administrative decree rather than through a democratic process including public consultation or the introduction of primary legislation that has been duly scrutinised by Parliament. This means that there is now a conflict between the legal powers and duties of existing statutory bodies in the NHS (such as CCGs) and the authority of new organisational forms, like ST Partnerships, that have no formal existence. In other words,

There are two sorts of change afoot – things which are in the Health and Social Care Act 2012 or other legislation, but which are simply being ignored or changed on the ground; and new ideas which don’t figure anywhere in the Health and Social Care Act 2012 or other NHS legislation, but which are being done anyway.

NHSE has said that ACSs will “create an effective structure for collective decision-making and governance” and Simon Stevens has announced that ST Partnerships will have governance rights over organisations within their local health system, including those bodies (like CCGs or local authorities) with statutory responsibilities. This is at best problematic, if not illegal, without legislative change: ST Partnerships – and the ACSs and ACOs they are setting up – have no statutory basis and have no power in law to make decisions without referring these back to partner organisations.

In addition, accountable care systems represent a step away from the split between commissioners and providers enshrined in previous legislation such as the Health and Social Care Act (2012).  Normally, new legislation would be brought in to regularise this situation but there is widespread belief that this would publicly flag up what is happening to the NHS and open a can of worms for NHSE.

NHSE claims that accountable care systems will reduce costs by changing the current system for commissioning services –  bundling them into giant contracts and reducing the costly annual round of purchaser/provider negotiations.  However, without new legislation to remove or amend the HSCA, if private providers miss out on a long-term monopoly contract from an ACS, they could seek expensive compensation.  In any event, accountable care systems will still be operating in the context of an expensive and wasteful market system.

 Increased privatisation of the NHS:      With ACOs, the boundary between what is done by CCGs and providers will shift: ACOs will allow private companies a significant new role in the planning and commissioning of services, as well as their delivery, so escalating NHS privatisation. The single, large-scale contract that characterises ACOs is immensely attractive to private companies and makes it possible for multiple services to be put on the international market, allowing wholesale privatisation at one fell swoop.

By and large, individual ST Partnerships have no expertise in setting up accountable care systems and so they are spending significant sums of public money on advice from private consultancy firms, like Capita. One can only guess the extent to which these firms shape the new systems with their own future interests in mind.

Some fear that accountable care models will in themselves provide a structure that, in future, will facilitate the introduction of private health insurers. Notably, with ACOs in the US, the single contract is held by a public or private insurer.

Asset stripping:    The Naylor Review estimated that delivering NHSE’s 5YFV (e.g. providing premises for new models of care) depends on finding around £10 billion for capital investment in the medium term. The Review suggested that around £2 billion of this could be raised by the sale of NHS assets, notably land and buildings owned by NHS providers in the acute sector. However, it appears that the only way these assets can be made fully accessible to an ST Partnership is if the purchasers and providers involved become a single organisation – an ACO. (With ACSs,  the land or buildings owned by NHS providers remains in their ownership). This means that ACOs provide a potential way of ending the social ownership of the NHS and transferring its assets to private ownership.

Lack of accountability and public consultation:    ST Partnerships are introducing accountable care systems with scant public involvement or consultation, despite the changes in service provision that will inevitably be involved. These new systems are presented as local bodies working in partnership with local communities but in reality, they will be run as businesses with little accountability to local people. This is in breach of the NHS Constitution’s principle that the NHS is accountable to the public, communities and the patients that it serves.

Centralisation of control:      Accountable care systems are being presented as a way for local organisations to get more control over the health system in their area. However, these new systems are being introduced at the same time as increased direct financial intervention on the part of NHSE and NHS Improvement (NHSI), reversing the previous system in which CCGs controlled the funding of services at local level.

Lack of evidence:       There is little robust evidence to support the introduction of accountable care systems to the NHS, partly because pioneer programmes have, by NHSE’s own admission, been of short duration and provided only small sample sizes.

In the US, ACOs are relatively new, and vary in form, ranging from closely integrated systems to the looser alliances that are closer to ACSs in the UK. There is mixed evidence about their performance. The very different contexts in which the NHS and US health care system operate (not least the different levels of funding), and the lack of a standard model of care also makes it difficult to compare with the US experience.

Unrealistic expectations:    ST Partnerships or their progeny (such as ACSs) are expected to move towards a new form of financial control (a shared control total), in which financial risk is shared across the whole local health system. This means that individual providers within an ACS must set aside their own interests and allow any surpluses they make to be used to offset losses elsewhere within the system. In effect, each provider will police the spending of its partners. As, increasingly, many providers within an ACS will be private companies whose first priority legally is to make profit, they are unlikely to put aside their own interests for the good of the whole, especially as some NHS providers will be in deficit. Alternatively, this system runs the risk that public funding will support private companies operating at a loss.

Workforce issues:   One way in which ACOs may reduce costs could be through ‘transforming’ its workforce. ACOs are likely to have reduced numbers of doctors and nurses who will be replaced by new technologies to reduce face-to-face consultations, and new roles, such as lower paid, lower skilled physician and nurse associates. Nationally agreed pay levels and NHS terms and conditions of work are expected to be undermined as staff are transferred to employment by ACOs. For example, with the Alzira model developed in Spain, hospital doctors and many GPs were no longer employed by the public sector, as was usual in Spain’s public hospitals, but by the company running the ACO. Generally, in Spain, employment in the private sector employment means worse terms and conditions, including less job security, lower pay scales and longer working hours. This allows productivity can be increased by around 20 – 30%, compared to the public sector. In Alzira, medical salaries had a fixed component (80%) and a variable element dependent, for example, on how staff responded to incentives. The unified information system for sharing patients’ data not only made patient costs visible to clinicians, it allowed individual clinicians’ work to be monitored and controlled. In Madrid, the regional government abandoned its plan to use the Alzira system for six public hospitals following mass health workers’ strikes and other difficulties.


No one can deny the need for acute, primary care and community NHS services to be better integrated. However, this is not what ACSs or ACOs will deliver, at least not while they are primarily vehicles for privatisation and unprecedented levels of ‘efficiency savings’, widely recognised to be unachievable without savage cuts in services.

Accountable care systems that serve the interests of the private health industry while being of questionable value to patients are being introduced outside of any legal framework and without rigorous scrutiny by Parliament. We need new legislation, such as the NHS Reinstatement Bill, that protects the founding principles of the NHS, ends contracting and the marketisation of the NHS and re-establishes public bodies and NHS services that are accountable to Parliament and local communities.

 Further information 

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