What are ACOs and what do they mean for GPs?

Plans to develop accountable care organisations (ACOs) in the NHS have proven controversial. GPonline looks at whether they are simply a pragmatic way to facilitate NHS integration, or a one-way ticket to NHS privatisation.

NHS integration (Photo: iStock)
NHS integration (Photo: iStock)

What are ACOs?

ACOs are organisations contracted to provide an agreed range of health and care services to a defined population, generally in return for an annual capitated budget. They provide the vast majority of health and care services to everyone in a geographic area, under a single contract agreed with commissioners.

In England, the organisations would be the final stage in the evolution of the 44 sustainability and transformation partnerships (STPs) set up from 2015. NHS England's Five Year Forward View policy paper said the 'traditional divide between primary care, community services and hospitals – largely unaltered since the birth of the NHS – is increasingly a barrier to the personalised and co-ordinated health services patients need', and called for greater integration of services.

STPs were set up to facilitate this process, with a view to evolving into accountable care systems (ACSs) - more formal partnerships spanning health and social care organisations working together towards shared goals. ACSs could eventually develop into ACOs - which would bring the member organisations within an ACS together under a single contract.

Where did the idea come from?

The ACO model has been developed largely in the US health system, with health secretary Jeremy Hunt - like other health secretaries before him - citing leading US exponents of the model such as Kaiser Permanente as examples of 'best practice in other parts of the world'.

What do they hope to achieve?

By bringing together what are currently multiple health and care organisations serving populations into a single organisation with an integrated budget, working under a single contract, NHS leaders hope to eradicate organisational 'siloes' that can lead to duplication of work and inefficiency. The aim would be to create a contractual structure that drives integration and joint working across what are often disjointed services under current arrangements.

Have ACOs begun to take shape in the NHS?

NHS organisations in 10 areas of England - covering around one in six people in the country - have joined the first wave of ACSs. From April 2018 these groups will be granted extra freedoms around commissioning and control of budgets - they could take full delegated control of commissioning primary care, and manage 'transformation funding' packages including GP Forward View, cancer and mental health money.

In return for these freedoms they will have to demonstrate how they will achieve better integration of services within primary and community services, and between acute and primary services. They will also have to develop preventive strategies and self care, and agree outcomes targets, according to NHS England's Next Steps on the Five Year Forward View document.

Why are some people worried about ACOs?

NHS England guidance says that there will be 'no formal restrictions' on who can hold an ACO contract - so the organisations could be run by an NHS organisation, or a non-NHS organisation such as a limited company.

Existing UK laws mean that these contracts are likely to be put out to tender, opening them up to bids from private providers. NHS England guidance says: 'Public contracts regulations (PCR 2015) require that contracts for clinical services with a lifetime cost over the £589,148 threshold must be advertised to the market.'

NHS England argues that the aim of forming ACOs is simply to integrate health and care services and improve them for patients, and denies that the objective is to privatise the NHS because services will remain free at the point of use.

But the BMA and other critics say that because ACOs open the door to NHS services across ‘entire localities being run by commercial organisations’, this is absolutely about privatisation.

And these deals would not easily be reversed in the short term. NHS England plans to award contracts for up to 10 years - a duration it believes would provide an incentive for providers to invest in the services they provide.

What do they mean for GP contracts?

Changes to GP contracts depend on the level of integration ACOs adopt, ranging from 'virtual', 'partially integrated' to 'fully integrated'.

Under a virtual integration model, GP practices and other organisations working together in an accountable care model would retain their existing contracts and sign an 'alliance agreement', which would set out shared principles and objectives.

A partially integrated system would involve commissioners awarding a single contract for all services in an area apart from core general practice. Practices would retain their PMS/GMS contracts and sign an integration agreement to govern how they work as part of the accountable care model.

Under a fully integrated system, GP practices' contracts would be suspended - with partners and all other GPs working across the area becoming employees, owners or subcontractors within the ACO. GPs would be offered terms at least in line with the BMA model contract.

Despite guarantees that the suspension of GP contracts would be reversible, GP leaders have said that in practice this may prove impossible because re-establishing individual practices would require unpicking of complex funding streams and services that had been pooled or merged.

What would happen to GP funding under ACOs?

If practices across a geographical area choose to join a fully integrated ACO model, this would mean that the provision of GP services would be covered by the single contract held by the ACO - and funding for GP services would be wrapped up with that.

Critics of the ACO model say that pooled budgets - particularly when overall NHS funding is tight - could mean that GP services lose out financially as powerful hospital chiefs demand a greater share of funding. NHS England, however, hopes that an integrated budget would create flexibility in how services are delivered and help the health service move away from payment based on activity towards payment for shared outcomes.

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