Jeremy Hunt is not the only one saying this kind of thing. I’ve heard representatives from acute hospitals, GP federations and CCGs all make the same claim: they want to become an accountable care organisation (ACO).
But what does this really mean? The basic concept of an ACO is that a group of providers agrees to take responsibility for all care for a given population for a defined period of time under a contractual arrangement with a commissioner.
Essentially accountable care organisations, which have emerged from the United States over the past few years, are the next generation of managed care, but with a fundamental difference. While managed care initiatives in the 1980s and 1990s handed over a capitated contract to a network of providers to manage a defined population, they were not accountable for improving care, or even delivering care (networks quickly realised they could save money by restricting access). Learning from the scars of this legacy, these more recent managed care initiatives have included a stipulation to improve quality.
Like baseball and Las Vegas, ACOs are very much an all-American product, and leave most people in the United Kingdom scratching their heads with confusion, with the exception of some core enthusiasts. Commentators with much more poetic flair than me have likened ACOs to unicorns – we can all describe what a unicorn looks like, but nobody has ever seen one.
However, the overarching ambition of an ACO will be familiar to those involved in any kind of NHS transformation project – to improve the quality of care and reduce costs, largely by working together more efficiently. Nobody could argue with that!
But could a CCG, GP federation or acute hospital really become an ACO? Well, the clue is in the title.
Accountable: the ACO model is based on the premise that those who are accountable for the cost and quality of care for a whole population will be incentivised to improve care. Accountability refers to both clinical and financial accountability – the ACO is contracted to achieve on a range of quality and outcome measures, typically within a defined budget. The ACO might have a number of these ‘at risk’ contracts with a range of different payers (commercial and government), within which there might be a range of different outcome measures, thresholds, and payment mechanisms.
Care: an ACO delivers care; it doesn’t commission it. This is how it can minimise its risk, by taking control of the way care is delivered for a whole population. The ACO is able to develop and deliver preventive interventions for patients with a high-risk profile, as well as reactive interventions to avoid unnecessary hospital admissions.
Organisation: to organise and deliver this care, these accountable providers come together in a formal organisational structure (for example, a physician hospital organisation or independent practice association). It is through this structure that the ACO is able to build a leadership team and appropriate governance arrangements to manage risk across diverse providers, holding them to account for their part of the care pathway. If part of the organisation is not performing well, leaders have a range of structures and mechanisms at their disposal to incentivise improvement.
The current mix and remit of providers and commissioners in the NHS does not singularly or collectively embody these features. CCGs do not deliver care. Very few acute hospitals or GP federations would feel comfortable sharing clinical and financial risk with other providers through a legal structure.
In fact, ACOs are only one type of model being talked about in the NHS at the moment. In the past couple of weeks I have had many meetings where most of the conversation is spent trying to establish a common definition of ‘prime provider’, ‘prime contractor’, ‘prime integrator’, ‘lead provider’, ‘lead accountable provider’ and ‘alliance contract’ (and I’m sure there are many more). What is apparent is that all these models mean different things to different people, but they are all essentially working towards the same goal – quality improvement, cost savings and working together more efficiently.
More important than designing care to fit within a tight definition of an ACO (or other) model, is experimenting with payment and contracting tools in a range of ways – all the while focused on having a clear and convincing narrative of what the service should look and feel like to patients and those delivering their care. The organisational form will name itself.
This blog is also featured on the Public Finance website.
- Read our report: Accountable care organisations in the United States and England
- We'll be exploring ACO's in more detail at our annual Integrated care summit on 14 October