Moving to accountable care

by Chris Ham

22 May 2017

Accountable care organisations are likely to mean different things in different areas and face technical and relational challenges – and finance staff have a major role in their development

Accountable care organisations (ACOs) are under discussion everywhere. They build on previous efforts to integrate services in the NHS and draw on experience from the United States and other systems. The recent update on the five year forward view outlines ambitions for sustainability and transformation partnerships (STPs) to evolve into accountable care systems (ACSs) and identifies nine areas of England to lead their development. It proposes that accountable care systems might become ACOs, but only after ‘several years’.

The language of accountable care comes from the United States where ACOs have taken shape in the wake of Obamacare. ACOs are 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 shapes and sizes ranging from closely integrated systems to looser alliances and networks. In the case of the NHS, ACOs and ACSs can be thought of as comprising three core elements.

First, they involve a provider or more usually an alliance of providers that come together to collaborate in meeting 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 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, if any, of general practitioners, and of local authorities as providers and commissioners. The most ambitious plans for ACOs extend well beyond health and social care services to encompass public health and other services. In the case of Greater Manchester, the aim is to use all public resources to tackle the determinants of health in a move to what we at The King’s Fund have described as embryonic population health systems.

There is no single version of what an ACO should look like and so local context is important in shaping the approach taken in different areas. In some places, it is likely that work to integrate 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, as in emerging hospital chains and groups, may be more feasible.

Plans to establish ACOs 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 that should be used 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 an NHS 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 front line staff come together to redesign care.

These challenges are not insurmountable, but they take time and leadership 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 update on the forward view 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.

Finance staff have an important role to play in these developments. Most obviously, the introduction of system control totals in some STPs as a move towards ACOs represents a potentially significant shift in how NHS resources are used and how organisations are held to account. Careful thought will have to be given to aligning system control totals with the accountabilities of NHS organisations, and the risk sharing arrangements required in how system control totals are applied in practice.

With other colleagues, finance staff also have a key role in building the collaborative relationships on which ACOs will ultimately succeed or fail. This means setting aside time to understand the pressures facing different organisations and how these pressures can be tackled collectively. It means approaching meetings not with the aim of achieving organisational advantage, but with an ambition to work with others to succeed together. It also means presenting a united front to the regulators and ensuring their behaviours are aligned to support ACOs to succeed.

Chris Ham is speaking at the HFMA Convergence conference in July.