Accountable Care Organisations (ACOs)
Last Updated: March, 2019

 NHS England  wants  Accountable Care Systems (ACSs)  (also known as  Integrated Care Systems (ICSs) ) to be delivered by an Accountable Care Organisation (also known as an Integrated Care Provider). This is a single lead provider that has been awarded an  Integrated Care Provider Contract (ICP Contract) .

The ICP contract gives the lead provider the task of both planning and providing services for up to half-a-million people within a specific area for 10-15 years, These huge contracts potentially worth billions of pounds can be held by a private company - the ACO.

The plan to develop ICP contracts was challenged by MPs and a judicial review (not least) on the grounds that it required new regulations and a public consultation. In response a sham consultation was conducted in 2018.

The concept of ACOs originated in the US as a response to Health Maintenance Organisations (HMOs) dominated by large health insurance corporations. HMOs are notorious for denying patients access to medically necessary treatment, paying exorbitant CEO salaries, and systemic fraud. So ACOs are an evolution of HMOs in which an attempt is made to mitigate the power of the insurance corporations.

The fact that ACOs developed in an insurance-based health industry raises questions about whether they are appropriate models for the NHS, which is premised on social solidarity and universal health care.

Models for ACOs

Not all ACOs have the same structure. In one version, the lead provider is a single organisation able to set up a series of subcontracts with other providers. Alternatively, a lead provider (or group of providers) may form a new corporate vehicle (a Special Purpose Vehicle - SPV) to hold the primary contract - similar to the private consortia who have taken on  Private Finance Initiative (PFI)  contracts.

Since the early 2000s, the Department of Health has fixated upon the example of  Kaiser Permanente  (a large California-based HMO), where doctors are jointly partners and salaried employees.

The Department of Health and NHS England also like to cite the Alzira model in Valencia (Spain) as a template in which the Valencia government combined with the Ribera Salud corporate consortium financed, ran and delivered regional health services. So ACOs can be seen as a form of Public-Private Partnership (PPP) that goes beyond the scope of a PFI contract.

Notably, in June 2017 the new coalition government in Valencia passed new legislation to return the Alzira health concession to direct public management. At around the same time the Ribera Salud Group came under police investigation for embezzlement and corruption. In Madrid, following mass strikes by health workers and other difficulties, the regional government abandoned its plan to use the Alzira system for six public hospitals. Nonetheless, Ribera Salud has emerged in the UK: now 50 percent owned by transnational health insurance company Centene Corporation, they are involved in developing an Accountable Care System for Greater Nottingham.

Other Concerns

  • ACOs are non-statutory, non-NHS bodies - even when set up by, or including, NHS Trusts or Foundation Trusts.
  • ACOs have no statutory accountability or governance obligations, and no clear lines of accountability.
  • ACO structure and ownership is unrestricted: they could include NHS providers or GPs, but also private companies, insurance companies, banks and property companies.
  • ACOs can be established as off-shore companies.
  • ACOs might need numerous sub-contracts with Trusts, general practices, private health companies, voluntary organisations etc to provide services, leading to more unnecessary costs, more fragmentation, and less public control.
  • ACOs will help strip NHS assets, such as land and buildings, so ending the social ownership of much of the NHS estate while allowing private companies to profiteer from it.
  • ACOs are likely to under-deliver required skill levels and undermine NHS terms and conditions of employment.

By becoming a lead provider with a single long-term contract to set up and manage an entire system of health care for half-a-million people, a private company will be in a position to make decisions on spending, and on the nature and location of services, and to sub-contract with a range of other providers. This is wholesale privatisation.

Also see  Big Picture - Post 2012 NHS Plans