Accountable care organisations (ACOs) explained

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Many people in health policy circles are talking about accountable care organisations (ACOs). ACOs build on previous efforts to integrate services in the NHS and their development draws on experience from health systems in the United States and other countries.

NHS England has recently outlined ambitions for sustainability and transformation partnerships (STPs) to evolve into ‘accountable care systems’ (ACSs), and proposed that these ACSs might become ACOs but only after ‘several years’. Eight areas of England have now been identified to lead their development.

The language of accountable care comes from the United States, where ACOs have taken shape in the wake of Obamacare as an attempt to improve care and reduce growing health care costs. While the term ACOs is relatively new, they represent the most recent manifestation of well-known integrated systems, such as Kaiser Permanente, which have a much longer pedigree. They come in a variety of forms ranging from closely integrated systems to looser alliances and networks.

Three core elements

In the case of the NHS, ACOs and ACSs (terms often used interchangeably to describe very similar set ups) can be thought of as comprising three core elements.

First, they involve a provider or, more usually, an alliance of providers that collaborate to meet the needs of a defined population. Second, these providers take responsibility for a budget allocated by a commissioner or alliance of commissioners to deliver a range of services to that population. And third, 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.

Variations on these core elements centre on the involvement of general practitioners in the network of providers delivering care and of local authorities as providers and commissioners of services.

The most ambitious plans for ACOs in England extend well beyond health and social care services to encompass public health and other services. In Greater Manchester, for example, the aim is to use all public resources to improve health care while also tackling the wider determinants of health. This work, and that of other STPs, points to the emergence of what we have called population health systems, which seek to integrate care and to improve the broader health and wellbeing of the local population.

Local context

There is no single model for an ACO and so local context is important in shaping the approach taken in different areas. In some places, it is likely that working towards integrating hospital, community, mental health and adult social care services will make sense, whereas in others there will be an appetite for more broadly based partnerships. Elsewhere, horizontal integration, such as hospital chains and groups, may be the focus. There is no evidence that one form of ACO is superior to others and much depends on developing the leadership and collaborative cultures required to improve care.

Every ACO needs to adapt to the history of local collaboration and the willingness of partner organisations to find common cause. Progress is likely to be made more quickly in areas where organisational arrangements are relatively simple and more slowly where they are complex. Areas in which organisations are performing well often have a head start on areas where organisations face challenges, although a ‘burning platform’ can also serve as a stimulus to action.

What do ACOs do?

Delivering high-quality care in the community and people’s homes is a priority for ACOs in the United States – as it is for emerging ACOs in England. This means understanding the population served and stratifying that population according to need and health risk. People at high risk of hospital admission may receive support from case managers and others to help them live at home. People with long-term conditions will often receive targeted support to help them manage their health. Others will be helped to remain in good health through screening, and the provision of advice and other forms of support.

Many ACOs in the United States are focusing on improving access to primary care services and drawing on the range of skills and resources available outside hospitals – including community nurses, social workers and other staff. They are also putting in place new roles and processes to co-ordinate care across the health and care system. As well as improving care for patients, a common aim is to reduce unnecessary hospital use and associated costs by anticipating the needs of patients before they experience a crisis.

Within hospitals the aim is to avoid admission by assessing patients in A&E and providing care in the community where appropriate. For patients who are admitted, medical specialists known as hospitalists manage care with support from other clinicians and discharge planners to minimise lengths of stay. After discharge, patients are followed up by phone or in their homes to ensure continuity. Skilled nursing facilities may be used for patients who are not ready to go home. Some ACOs are also starting to address the social needs of their patients, such as housing, income support and access to legal services.

The most advanced ACOs use electronic patient care records so information about patients is available wherever they receive care. Information technology enables patients to communicate with doctors and nurses through email and other means, while enabling ACOs to communicate test results, and provide reminders of appointments and screening opportunities. ACOs can also use patient information for population health management (for example, by segmenting the population based on health needs).

One of the best-known integrated care systems outside the United States is the Canterbury Health Board in New Zealand, which has been successful in moderating the rate of growth in hospital use by investing in services in the community. GPs and consultants in Canterbury also came together to agree health pathways for the diagnosis and treatment of patients with common medical conditions thereby breaking down barriers between clinicians.


Plans to establish ACOs in the NHS face technical and relational challenges. The technical challenges include the organisational forms needed when alliances of providers and commissioners are involved and the nature of the contracts and budgets required to turn plans into practice. Work is also needed on the incentives needed to enable providers to deliver the expected outcomes and share risks and rewards.

The relational challenges centre on the need to develop trust between the organisations and leaders involved as well as an ability to collaborate in a legal context that was designed to promote competition. These people and behavioural issues need serious attention in many areas and extend beyond organisational leaders to middle managers and clinical staff. The principal benefits of integration arise when clinical barriers are removed and this will only happen if frontline staff come together to redesign care.


These challenges are not insurmountable but they take time to overcome. Hardly surprising therefore that areas with a history of seeking to integrate services, such as Northumbria and Salford, are furthest ahead in establishing ACOs in England. Yet even in these areas, progress has not been straightforward, confirming the view expressed in the Next steps document that it will take time for these nascent arrangements to develop and mature. Common difficulties include how to engage GPs in emerging ACOs, and how to marry the very different forms of accountabilities in local government and the NHS.

Next steps

Building strong relationships and cultures of collaboration takes time which is why the experience of established integrated care systems in the United States is generally more positive than that of recently created ACOs. Policy makers therefore need to be patient as emerging ACOs are established and avoid rushing to judge whether they are working. A process of trial and error supported by evaluation and learning is the best way of understanding what role ACOs have in the NHS of the future.

Get in touch

To speak to us about how we can work with you to develop integrated care and cultures of teamwork and collaboration, please contact Nicola Walsh: or 020 7307 2662.


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