With ACSs blending into ICSs, and ACOs in hot water, we look at what’s cooking for the NHS in England.

There has been a recent proliferation of three-letter acronyms in the NHS. We have been introduced to accountable care organisations (ACOs), sustainability and transformation partnerships (STPs) and accountable care systems (ACSs). The latter have since been rebranded as integrated care systems (ICSs). Behind the confusing acronyms lie important objectives for the health and care system, with significant implications for its future. At the King’s Fund, we have been working to make sense of these developments – and exploring their implications for health and care managers.

Why is change needed?

Constraints on funding combined with rising demand from a growing and ageing population have put the NHS under enormous pressure. The NHS will have to work differently, breaking down barriers between services to integrate care around people’s needs and placing greater emphasis on population health.

The NHS Five Year Forward View set out a road map for achieving these objectives and is now being pursued through STPs, integrated care systems and new care models. This represents a different way of working for the NHS, with the emphasis on places, populations and systems rather than organisations.

What do the different terms mean?

A variety of terms are used to describe different ways of integrating care and they are often used interchangeably, leading to confusion.

Integrated care systems (ICSs) have evolved from STPs. They bring together NHS providers, NHS commissioners and local authorities to work in partnership to improve health and care in their area, take the lead in planning and commissioning for their populations, and provide system leadership.

Across England, providers are forming integrated care partnerships – local alliances which aim to join up the delivery of care. They may include hospitals, community services, mental health services and GPs. Social care and independent and third sector providers may also be involved in some cases. Some of the new models of care implemented through the vanguards programme, including the multi-speciality provider (MSP) and primary and acute care system (PACS) vanguards, are examples of integrated care partnerships. Early evidence reported by NHS England shows that some have moderated demand for hospital care.

Accountable care organisations (ACOs) are a more formal version of integrated care partnerships: commissioners award a long-term contract to a single organisation to provide a range of health and care services to a defined population following a competitive procurement. This organisation may subcontract with other providers to deliver the contract.

ACOs do not yet exist in practice. NHS England is developing a new contract for commissioners wishing to go down this route, and the Department of Health and Social Care has consulted on changes to regulations to facilitate this. Current indications are that only Dudley and the City of Manchester are planning to use the contract.

Nevertheless, these developments have been met with a wave of concern and prompted two separate legal challenges. NHS England has now delayed introducing the contract and agreed to consult on how it should be used.

Why are ACOs so controversial?

Two key factors are behind the controversy over ACOs. The first is that the language of accountable care originates in the United States, raising concerns that ACOs signal a move to an ‘American-style health system’. These fears are largely unfounded. It is only the idea of holding providers to account for improving outcomes for a defined population that has been adopted from the US. The principles of a universal and comprehensive health system funded through taxation and available on the basis of need would not be affected.

The second factor is that NHS England’s proposed contract would involve using competitive procurement, raising concerns that private companies would be able to compete to deliver NHS care. In practice, this is unlikely to happen, as a successful bidder would need to demonstrate that they have the capability and experience to deliver a wide range of NHS services, and that other local providers – including GPs – are willing to work with them. However, these arguments offer little reassurance to those who doubt the capability of commissioners to manage procurements of this nature, or the motivations of some providers.

In our view, it is unclear why the contract is even needed, when many areas have developed new models of integrated care without it – making use of existing flexibilities to pool budgets and join up services. A further question is whether the competitive procurement process required by law to award an ACO contract will risk undermining the collaboration between commissioners and providers that has characterised many successful integrated care partnerships.

The national bodies need to spell out the expected benefits of the contract and respond to these concerns if they wish to pursue its introduction. The vacuum created by the lack of clarity so far has fuelled suspicion and risks toxifying the wider transformation and integration agenda.

What’s happening in integrated care systems?

Ten STP areas have been selected to lead the development of integrated care systems. They have been working to put in place the structures needed for an ICS to work – making agreements to share funding and responsibility for performance, forming boards, appointing leaders to oversee the system, and renegotiating their relationships with the regulators.

The updated planning guidance for 2018-19 from the national bodies makes clear that ICSs will become increasingly important in planning services and managing resources. Areas operating in this way will prepare a single system operating plan and may take responsibility for a system control total – an annual financial target set by NHS Improvement for the whole system – in 2018-19. Other systems will soon be joining the programme if they can demonstrate their readiness to do so.

What does this mean for local leaders?

As part of these developments, CCGs are working more closely with each other and with local authorities to develop joint or integrated commissioning, and with providers to plan care for their populations. Looking to the future, commissioning is likely to become more strategic, focusing on the planning and funding of new models of integrated care rather than annual contracting rounds. It is also likely to involve longer-term, outcome-based contracts in place of the current system of Payment by Results, which was designed to support choice and competition.

Providers will need to adjust to an environment where collaboration, not competition, is the order of the day. Organisations will be asked to give up some of their own sovereignty and act in the interests of the wider system and populations they serve. Our work on system leadership points to the importance of local leaders investing time and effort in building trust and collaborative relationships. This can only be done at a local level, takes time and requires sustained commitment.

A major risk to these developments is that leaders may not be able to find time to develop new ways of working while also tackling huge operational pressures. Even for the most experienced leaders, leading the development of integrated care systems alongside their day jobs is a significant ask and will not be sustainable in the long term.

ICSs are not a panacea, and national and local leaders need to be realistic about how long they will take to deliver results. ICSs will not address the significant operational and funding pressures facing the health and care system in the short term. However, the King’s Fund believes that they offer the best hope for creating a health and care service that meets the needs of the population now and in the future, and their development should be
supported.

Anna Charles is senior policy adviser at the King’s Fund.