Accountable care organisations (ACOs) explained

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Accountable care organisations (ACOs) are under active development in a number of areas of England. They are a response to growing financial and service pressures and work to put in place new care models that integrate services previously provided separately. So what are ACOs and what needs to be done to ensure they deliver benefits for patients?

What are ACOs?

ACOs have evolved recently in the United States and they build on a much longer history of integrated care systems such as Kaiser Permanente and Intermountain Healthcare. An ACO brings together a number of providers to take responsibility for the cost and quality of care for a defined population within an agreed budget. ACOs take many different forms ranging from fully integrated systems to looser alliances and networks of hospitals, medical groups and other providers.

Why are ACOs relevant to the NHS?

ACOs have attracted interest as one way of overcoming fragmented responsibility for the commissioning and provision of care in the NHS. They are a practical expression of ‘place-based’ working under which NHS organisations and their partners agree to collaborate in order to meet the needs of the population they serve. There has been particular interest in ACOs in areas of England involved in the new care models programme.

Northumbria is proposing to develop an ACO to take forward its work as a primary and acute systems vanguard. It will work under a contract agreed with commissioners who will define the outcomes the ACO will be expected to deliver. Similarly Morecambe Bay is developing plans for an accountable care system involving a network of providers in the Bay area. A different example is west London where the role of accountable care partnerships is being actively explored.

Will they deliver benefits for patients?

While early evidence on ACOs in the United States is mixed, the experience of established and successful integrated care systems like Kaiser Permanente holds important lessons on what needs to be done to deliver benefits for patients.

First and foremost, the NHS needs to build strong relationships between the leaders of participating organisations and the clinicians who deliver care. This includes nurturing cultures of collaboration and teamwork to overcome organisational and professional silos and deliver truly coordinated care. Collaboration between clinicians is especially important as the potential benefits of ACOs result primarily from clinical integration and not organisational integration.

Second, the NHS needs to support cultures of collaboration and teamwork by accelerating the implementation of electronic care records and the use of predictive tools to identify patients who have higher than average health care costs. These tools create opportunities to reduce avoidable hospital admissions and ensure timely discharge from hospital when patients do need to be admitted. Case management of patients at high risk of admission to hospital and the use of nurses to follow up and coordinate care after discharge can also contribute.

Third, the NHS needs to put in place new ways of commissioning and paying for care. This includes longer term, outcomes-based contracts and the use of budgets that cover the health care needs of a defined population (‘capitated budgets’) rather than payment according to the number of patients seen or treated (‘payment by results’). Importantly, commissioning itself needs to be integrated to facilitate the development of integrated models of care.

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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