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Long read

Making sense of accountable care

There is a more up-to-date version of this article

Since this piece was published NHS England has changed the name of accountable care systems to integrated care systems, which describes more accurately the work being done in the 10 areas of England operating in this way. We have published an updated long read to reflect these changes and make sense of all the terminology:

Making sense of integrated care systems, integrated care partnerships and accountable care organisations in the NHS in England

Constraints on NHS funding over the past seven years, combined with rising demand from a growing and ageing population, have put the NHS under enormous pressure. 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 means tackling risk factors such as obesity and redoubling efforts to reduce health inequalities. Limited progress has been made in fully engaging the public in changing lifestyles and behaviours that contribute to ill health and in acting on the recommendations of the Marmot report and other reviews to improve population health.

Why is there so much interest in accountable care?

The NHS five year forward view, published in 2014, set out a road map for achieving these objectives. Several areas of England have been working to put in place the new care models outlined in the Forward View, and every part of the country has developed sustainability and transformation plans (STPs) describing how they will implement the Forward View locally. Building on these developments, NHS England’s update on the Forward View, published in March 2017, made the following bold statement.

Our aim is to use the next several years to make the biggest national move to integrated care of any major western country.

(NHS England 2017, p 31)

This aim is being pursued through the new care models, STPs and a variety of developments that are labelled ‘accountable care’.

The term ‘accountable care’ originated in the United States at the time of President Obama’s health care reforms and it is increasingly used in the NHS to describe how the Forward View is being implemented. The context in which accountable care is being taken forward in England, where public financing and provision predominate, is, however, quite different to that in the United States.

What is accountable care?

Put simply, accountable care is a synonym for integrated care. This happens when NHS organisations work together to meet the needs of their local population. Accountable care also aims to improve population health by tackling the causes of illness and the wider determinants of health. Some forms of accountable care involve local authorities and the third sector alongside NHS organisations in working towards these objectives.

Developments in accountable care in England take different forms in different places. A variety of terms are used to describe these developments and this can be confusing and potentially misleading. For the purposes of this report, the following definitions describe the three main forms of accountable care that we have observed in our work.

  • Accountable care partnerships (ACPs) 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 a more formal version of an ACP that may result when NHS providers agree to merge to create a single organisation or when commissioners use competitive procurement to invite bids from organisations capable of taking on a contract to deliver services to a defined population.

  • Accountable care systems (ACSs) 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.

ACPs are at various stages of development across England and ACSs have been established in ten areas1 , two of which – Greater Manchester and Surrey Heartlands – are part of the government’s devolution programme. ACOs are also currently under discussion in a small number of places and NHS England is developing a new contract to be used by commissioners wishing to go down this route (see below).

  • 1The 10 ACS areas are: Blackpool and Fylde Coast; Berkshire West; Buckinghamshire; Dorset; Frimley Health; Bedfordshire, Luton and Milton Keynes; Nottingham and Nottinghamshire; South Yorkshire and Bassetlaw; Surrey Heartlands devolution area; and Greater Manchester devolution area.

How does accountable care fit into the current legislative framework for the NHS?

Developments in accountable care are a conscious attempt on the part of national and local leaders to make sense of the complex and fragmented organisational arrangements that resulted from the Health and Social Care Act 2012. In place of competition, which the Act was designed to support, accountable care seeks to promote collaboration by breaking down barriers between organisations and services. Experience shows that this is not easy and areas that are making progress are often doing so despite the 2012 Act and not because of it.

The Conservative Party’s 2017 general election manifesto promised to legislate to remove barriers to implementing the changes set out in the Forward View. However, the subsequent election of a minority government means that legislation on the NHS is off the agenda for the time being. The only substantive change being considered is the development of a national contract to enable the competitive procurement of ACOs where this is the preferred route.

The Department of Health and Social Care has consulted on changes to regulations to pave the way for an ACO contract, prompting two separate legal challenges. One of these challenges questions the legality of ACOs under the Health and Social Care Act 2012 while the other claims that ACOs will see the NHS opened up to privatisation.

What is happening in practice?

In practice, further developments in accountable care are not dependent on the proposed ACO contract. There are many other ways of overcoming the complexity and fragmentation of the current system, for example, through NHS organisations taking on lead provider roles, and by using alliance contracts. Areas as diverse as Northumbria, Salford, South Yorkshire, Morecambe Bay, East Somerset, Nottinghamshire, and Cornwall are showing the way in exploring these approaches. These areas and others are making use of existing legislative flexibilities to integrate care with public providers and commissioners taking the lead.

Developments in accountable care in England hold the promise of a different way of working in the NHS with an emphasis on places, populations and systems rather than organisations. Successful systems will take more control of funding and performance with less involvement by national bodies and regulators. They will also have the opportunity to accelerate the implementation of new care models designed to integrate care and promote population health, albeit within an increasingly challenging financial context.

Rather than opening up the NHS to increased privatisation and competition, as some have claimed, accountable care is likely to have the opposite effect. The main participants involved in developing accountable care are NHS organisations and partners in the public sector and they are making progress by collaborating not competing. The vestiges of market-based reforms remain, but they have taken a back seat as the need for NHS organisations to work together to make decisions on the use of resources has been given higher priority.

What does accountable care 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 ACPs and ACSs and alliances of providers that make up ACPs are taking on some of the functions of NHS commissioners. 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 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.

What’s happening with new care models?

A variety of new care models has been put in place to better meet the changing needs of the population. Two of these care models, primary and acute care systems (PACS) and multispecialty community providers (MCPs), seek to integrate care and improve population health. PACS and MCPs take different forms in different places but share a focus on places and populations rather than organisations. Both are examples of what we describe as ACPs.

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. The distinction between PACS and MCPs is being blurred as different care models evolve and increasingly converge. Both are focusing on integrating care and working to improve population health in their areas.

An advanced example of a PACS can be found in Salford, part of the Greater Manchester devolution programme, where health and care services are working in partnership to meet the needs of a population of 230,000. This work is led by Salford Royal NHS Foundation Trust which provides acute and community services and adult social care services under a Section 75 agreement with Salford City Council. Mental health services are closely involved in integrating care and work is under way to engage with general practices. The clinical commissioning group is collaborating with the local council to commission these services.

An advanced example of an MCP is Encompass in east Kent where 13 general practices are collaborating to improve care for a population of 170,000. The MCP has five community hubs bringing together multidisciplinary teams of GPs, community nurses, social care workers, mental health professionals, pharmacists, health and social care co-ordinators and others. These teams manage the care of individuals who have been identified as being at high risk of hospital admission. Other initiatives include a database of voluntary and community services, a social prescribing service and drop-in dementia clinics. Early evidence suggests that these changes have led to year-on-year reductions in emergency admissions to hospitals.

What’s happening in accountable care systems?

Sustainability and transformation plans, or partnerships as they are now called, build on the work of the new care models and set out ambitions to integrate care and transform services. Forty-four areas of England prepared these place-based plans during 2016 as NHS England and other national bodies emphasised the need for providers and commissioners to collaborate in addressing the challenges they face.

The update on the Forward View announced that some STPs would evolve into accountable care systems (ACSs) which would:

  • agree a performance contract with NHS England and NHS Improvement to deliver faster improvements in care and shared performance goals

  • manage funding for a defined population by taking responsibility for a system ‘control total’

  • create effective collective decision-making and governance structures aligned with accountabilities of constituent bodies

  • demonstrate how provider organisations would operate on a horizontally integrated basis, for example, through hospitals working as a clinical network

  • demonstrate how provider organisations would simultaneously operate as a vertically integrated system linking hospitals with GP and community services

  • deploy rigorous and validated population health management capabilities to improve prevention, manage avoidable demand and reduce unwarranted variations

  • establish clear mechanisms by which residents can exercise patient choice over where they are treated.

The quid pro quo for ACSs offered in the Forward View update was:

  • the ability for the local commissioners in the ACS to have delegated decision rights in respect of commissioning of primary care and specialised services

  • a devolved transformation package from 2018, potentially bundling together funding for the General practice forward view, mental health and cancer

  • a single ‘one-stop shop’ regulatory relationship with NHS England and NHS Improvement in the form of streamlined oversight arrangements

  • the ability to redeploy attributable staff and related funding from NHS England and NHS Improvement to support the work of the ACS.

The 10 ACS areas were selected on the basis of the quality of their STPs and an assessment of their ability to work at scale to demonstrate progress in taking forward the ambitions of the Forward View. They vary widely in their size and complexity. Other areas are likely to be added as they are able to demonstrate an ability to work in partnership to integrate care and improve population health.

The ACS programme involves ACS areas working with NHS England and other national bodies on a number of issues, including:

  • the governance arrangements and the leadership and staffing required to make a reality of ACSs

  • the financial arrangements needed, including the system control total, risk sharing and how services should be paid for

  • regulatory alignment and the implications for NHS England and NHS Improvement of working with ACSs

  • the performance contract with ACSs and the development of memoranda of understanding with NHS England with agreed performance goals

  • the development of population health management capabilities and a procurement framework to support this.

NHS England acknowledged in the update on the Forward View that the transition to ACSs was complex and would require a ‘staged implementation’. It also stated that progressing to an arrangement whereby commissioners would have a contract with a single organisation for the majority of health and care services and for the population health in an area would take several years.

Previous difficulties in using competitive procurement to promote integrated care, as in the UnitingCare Partnership contract in Cambridgeshire, suggest that this route is likely to be used sparingly. The decision to delay the use of the proposed national ACO contract in Dudley until 2019 at the earliest because of the complexities involved indicates the cautious approach being adopted.

How is accountable care being implemented?

ACPs formed under the new care models programme are invariably led by NHS organisations, often in collaboration with partners in local government and the third sector. Their aim is to integrate care around the populations served and to do this by working in partnership and in some cases pooling budgets. ACPs are very much a work in progress and even the most advanced examples have much work to do to realise the potential benefits.

ACSs are at a much earlier stage in their development with Greater Manchester being the most developed. The largest ACSs include within their boundaries several ACPs that are very similar to those that have emerged under the new care models programme. As examples, Greater Manchester, with a population of 2.7 million, has ten ‘local care organisations’ (to use its own terminology). South Yorkshire and Bassetlaw with a population of 1.6 million is working to develop five ACPs within its footprint.

Figure 1: The five ACPs in South Yorkshire and Bassetlaw ACS

ACSs in these larger areas are led by groups of NHS and local government leaders. Their principal functions are planning for the future, building on the work that went into STPs; aligning commissioning behind their plans; incorporating the regulatory functions of NHS England and NHS Improvement; managing performance in their areas; and providing leadership across the system covered by the ACS. Responsibility for service delivery rests with the organisations that provide care within ACSs and increasingly they are collaborating to put in place integrated care models through ACPs.

The distinction between ACSs and ACPs is much less clear in smaller ACSs; for example, Blackpool and Fylde Coast (population 300,000) and Berkshire West (population 530,000) are working to integrate health and care provision in a way that closely resembles what is happening in ACPs. These areas and other ACSs with smaller populations may in time come together with their neighbours to develop the capacity to plan and provide system leadership across much bigger geographical footprints.

What has accountable care achieved?

Early evidence from the new care models suggests 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.

Among the eight ACS areas (excluding the Greater Manchester and Surrey Heartlands devolution areas), Frimley Health has also experienced reductions in GP referrals and flat A&E attendances, and the part of the Nottingham and Nottinghamshire area covered by the Mid-Nottinghamshire PACS has seen reductions in emergency admissions that have contributed to bed reductions at Sherwood Forest Hospitals NHS Foundation Trust.

The experience of Frimley Health illustrates some of the service changes that have contributed to these trends. Drawing on the experience of the north-east Hampshire and Farnham PACS and similar work in Surrey Heath, GP practices have collaborated to provide same-day access to patients requiring urgent appointments, and community services have been aligned more closely with GP practices and adult social care. Mental health has been a particular priority and service users have worked with providers to improve access to a wider range of support. Hospitals have changed their ways of working in A&E to see and treat patients rather than always admitting them to a bed. The cumulative impact of many service changes lies behind Frimley Health’s success in moderating hospital use.

Greater Manchester provides further evidence of progress. Examples include improved access to GP services, investment in mental health services, and major changes to acute and specialised hospital service. Local care organisations across the conurbation are also building much closer links between NHS organisations and local authorities. This includes giving greater emphasis to prevention and population health as well as the integration of health and social care. These developments have been made possible in part because Greater Manchester was able to access its share of the national Sustainability and Transformation Fund to pump prime improvements in care and this has helped enable the area to make faster progress. Greater Manchester stands out because its work on health and social care is embedded within a broadly based and long-established public sector partnership.

Other examples include progress in the Dorset ACS in making better use of acute hospitals through the designation of hot and cold sites in Bournemouth and Poole; work to moderate use of hospitals through closer collaboration between care homes, GPs  and other services in the community, developed through new care models vanguards; and work in the Principia MCP in the Rushcliffe area of Nottingham where GP practices serving a population of 125,000 are collaborating to increase investment in primary care, support people to die in their home or preferred place of care, and reduce strokes. Principia, which is part of the Nottingham and Nottinghamshire ACS, is also breaking down barriers between hospitals and primary care by moving some specialist services into general practice and by GPs and community nurses reaching into the hospital.

The areas mentioned here all face the same challenges as the rest of the NHS in responding to rising demand with constrained budgets but they indicate how new ways of working are beginning to deliver improvements in care. Their work also underlines the need for additional funding for the NHS as well the need for new ways of working to sustain as well as transform health and care.

Is accountable care about making cuts and privatising services?

Accountable care is being implemented at a time when NHS finances are under huge pressure and, as a result, has been interpreted by some as a means of cutting spending and services rather than improving care. STPs in particular were seen as a way of NHS organisations working together to agree how they would live within the financial envelope available to them. Guidance from national bodies reinforced this perception with the requirement that plans should show how they would bridge the financial gap facing the NHS.

While financial issues are very important in ACPs and ACSs, it would be wrong to see accountable care first and foremost 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, accountable care is primarily about improving health and care, and in so doing seeking opportunities to deliver its financial objectives. ACSs are also 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.

It would also be wrong to see ACPs and ACSs as a means of privatising services. There is no evidence that private providers of clinical services are taking on a bigger role in areas that are furthest ahead in developing accountable care. The financial pressures the NHS is facing mean that, in any case, there are limited opportunities for these providers to generate profits. Even more important is the emphasis placed on the NHS leading the development of accountable care rather than using competitive procurement for this purpose. Private providers may be brought in by NHS organisations where they have distinctive expertise to offer but this has occurred throughout the history of the NHS.

Critics of accountable care have expressed particular concerns that the proposed ACO contract will open up the NHS to further privatisation by enabling private companies, including companies from the United States, to compete to deliver care to NHS patients. This may be possible in theory but it is highly unlikely in practice. If the ACO contract is used, it will require bidders to have the capabilities to deliver a wide range of NHS and related services. These capabilities do not exist among the private providers currently working with the NHS.

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 and concerns about inadequate care, serves as a cautionary tale. NHS organisations are better placed to compete for ACO contracts, working in partnership with local authorities and third sector providers where appropriate, and national bodies are actively exploring how a new form of NHS organisation might be used for this purpose.

Where next?

The challenges in making progress are real and should not be underestimated. They include the following.

  • The need to ensure that national regulators change their ways of working (rapidly) to support developments in the NHS. An example is the way in which the Care Quality Commission (CQC) has put in place local system reviews that assess how well organisations are working together to meet the needs of their populations.

  • The need to avoid creating another tier of management by incorporating the work of NHS England and NHS Improvement into ACSs and aligning and streamlining commissioning behind ACSs and ACPs, as is beginning to happen in some areas.

  • The importance of local leaders investing time and effort in building trust and collaborative relationships and overcoming competitive behaviours that in the past have created barriers to partnership working.

  • The importance of demonstrating tangible improvements in health and care while at the same time putting in place the governance, leadership and funding models needed to support accountable care.

  • The need for clinicians to be at the heart of accountable care developments, building on the work of the new care models and recognising that the principal benefits of integrated care result from clinical integration rather than organisational integration.

  • The need for politicians and national leaders to allow sufficient time for accountable care to become established and deliver results, recognising the growing pressures on the NHS to tackle the financial and service challenges confronting the health and care system.

  • Linked to this, the risk that the behaviour of regulators will undermine moves to system working if they resort to top-down performance management to address performance challenges rather than relying on ACSs to take the lead in so doing.

  • The importance of engaging fully with local authorities and other partners and avoiding an NHS view of the world taking precedence.

  • The need to put in place incentives (financial and non-financial) to stimulate emerging models of accountable care to deliver improved care and outcomes for their populations and avoid becoming unresponsive monopolies.

  • The need to engage a wide range of stakeholders, patients and citizens in the work that is under way, to listen to their concerns, and to involve them in developing new care models and accountable care in a transparent process.

  • The need to clarify the likely end state of current developments to provide greater certainty about the direction of travel for local leaders who are working to develop accountable care for their populations.


Accountable care is not a panacea and unless implemented with skill it will not deliver the improvements in health and care envisaged in the Forward View. The King's Fund believes that accountable care should be supported because it offers the best hope for the NHS and its partners to provide the integrated health and care services required to meet the needs of the growing and ageing population. It will not deliver results quickly which is why national and local leaders need to make a commitment over the long term to developing accountable care as the main way of providing and funding care in the future.

Changes in legislation will be needed to align the developments outlined here with the statutory framework in which decisions are being made. There is no prospect of this happening in the immediate future which means that NHS organisations are putting in place governance arrangements that enable them to make progress with accountable care within the existing statutory framework. These arrangements are a way of formalising the work being done in ACPs and ACSs and respecting the roles and accountabilities of NHS organisations, local authorities and other partners.

Their effectiveness in practice hinges on the willingness of local leaders to work in this way and if necessary to give up some of their own sovereignty for the greater good of the populations they serve. The biggest risk to accountable care is organisational protectionism, rather than privatisation, linked to a history of competitive behaviours and sometimes poor relationships between the leaders who need to collaborate to make a reality of accountable care. Our own work has found that progress is more rapid where effort has been invested in building trust and collaborative relationships. This can only be done at a local level and it takes time and requires sustained commitment.

The promise of accountable care will only be delivered if doctors, nurses, allied health professionals, pharmacists and many others in clinical roles work much more with each other and staff working in social care and the third sector around the patients and populations they serve. There are examples of this happening in the new care models and related initiatives like the primary care home pilots as well as in international exemplars such as the Canterbury health system in New Zealand. The NHS and its partners must act on learning from these examples, otherwise services will remain fragmented even if organisations become more integrated. The worst possible outcome would be another reorganisation of NHS structures that fails to improve care.

The other big risk is the ability of experienced leaders to find the time to develop new ways of working while also tackling the huge operational pressures facing the NHS and social care. It is a truism that the urgent tends to drive out the important and it would be understandable if the development of new care models were delayed as a consequence. To return to the starting point of this report, operational pressures cannot be managed simply by working harder, they require the development of new care models better able to meet rising demand for care in the community as well as in hospitals. This is the raison d'etre of accountable care and why it should be supported.

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