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Three myths about Accountable Care Organisations

ZPB’s MD Alex Kafetz explores a few myths about the changes in the NHS and how these will affect organisations whose businesses work alongside providers and commissioners. 

This year, I’ve had the pleasure of visiting a few accountable care organisations (ACOs) in the USA as well as meeting with a number of emerging systems in England to learn about the changes they are making and the benefits these will bring.

Like many of the policy drivers in health and care in the developed world, we have to start with Don Berwick, former president of the Institute of Health Improvement in the USA, who defined the idea of the triple aim – that health and care delivery needs to form around ideas of better health for the population, better care for patients and better value for whoever is paying. Some now talk about the quadruple aim which includes bringing joy and fulfilment to the workforce. It’s this rubric that we need to keep in mind when trying to understand why these changes are taking place.

In this country there are some myths emerging around ACOs, which is why it is time to challenge some of them. These are my views, based on my insight into what I’ve learnt, and the opportunities and challenges I believe they create.

Myth 1: ACOs are a recent invention

ACOs weren’t invented by Jeremy Hunt, Teresa May, Simon Stevens or indeed Barak Obama. They are an idea that has been forming in many different developed healthcare systems, which all face the same challenges.

In February 2007, I was working in the East Coast USA and I first encountered the idea of accountable care when visiting a hospital system in Hackensack New Jersey that was buying care based on value and outcomes not activity.

At its simplest, an ACO is an area that has segmented their population, designed outcomes for these based around the triple aim and agreed some kind of finance pooling to achieve these outcomes. And the leaders in this area organise care – in the widest form – social care, mental health, social support, health prevention – in a patient-centred way rather than around the bricks and mortar of hospitals. The finance pooling is key to this, so money is spent on the triple aim not maximising income for one part of this system, which is often the hospitals. A few legally exist like Symphony in Somerset, but mostly in this country, organisations have voluntarily come together to redefine care and pool resource.

So, let’s be clear, we, in the NHS didn’t invent ACOs nine months ago and abolish them last month, the name is merely a descriptor for this type of care organisation, and one which I hope people will agree sounds sensible.

What we did invent were Accountable Care Systems or ACSs (and a lot of other things I’m not going to write about today, like vanguards, STPs, multi-speciality community providers, pioneers and the like). See The Kings Fund’s publication for a full description of the different models of care. The ACSs were just a name for eight areas that have made good enough progress, in integration, and crucially financial balance, to be fast-tracked by NHS England, with support and cash, to the described state. The other two in this category are Greater Manchester and Surrey who are working under devolved budgets.  It’s these that NHS England recently rebranded to be called integrated care systems or ICSs. According to someone at NHS England involved in the programme, they have been renamed “because it describes better what they are doing”. But I suspect this is also because there has been a political backlash to the use of the word accountable, and that leads us onto:

Myth 2:  ACOs are a trick to privatise the NHS

If there wasn’t so much noise and confusion in the media about their purpose and ownership, reports of legal challenges and a powerful anti-privatisation lobby it would seem laughable that these changes have been conflated with privatisation. The 2012 Health and Social Care Act fragmented the NHS and at their simplest, the Five Year Forward View reforms are trying to stop this – yet it’s many of the same people who objected to the act that are objecting to this. Again, I would go back to the principles of accountable care and ask: ‘What’s not to like?’

I believe there are two main misunderstandings that are exacerbating the situation:

  1. Confusions and conflation that we are implementing the US system. We’re not. Healthcare costs more per capita and swathes of people don’t have access. We would be idiots if that was the plan. That said, the two main architects of the plan, Simon Stevens and Mathew Swindells did spend ten and five years respectively in the States and have been employed (partly in my view) to bring the best of what they’ve seen over here. It could be argued America reacted first to challenges of spiralling costs, over testing and over medicalisation, too many hospitals and it’s the solutions to these that we are trying to translate.

Both Stevens, and Swindells heavily influenced New Labour’s policy towards the NHS, so it’s not unlikely we would have ended up here, whoever was in Number 10. There’s a key difference in what we are doing compared to the US. We, legally and morally, need to ensure any changes don’t widen inequalities – a check not always thought about over there.

  1. Secondly a lot of the protesters, many of whom claim to be “saving our NHS” cannot decouple the idea of an NHS free at the point of need, and hospitals. They think they are one and the same thing, and so conflate care, still free, still at the point of need, but which is taking place in out-clinics, or church halls, or mobile buses or in care homes or in people’s homes as, weirdly, as privatisation, because a bi-product is that the local hospital will have parts of it closed down. This is also true of MPs who march to save their local hospital but struggle to understand (but maybe we haven’t explained it well enough) why fewer services at a hospital site and the plans of the ACO might benefit their constituents, especially if they are from backgrounds where visiting a doctor doesn’t come naturally, health conditions are undiagnosed and they end up in A&E.

So, if you run a business, you might be thinking: ‘what do squabbling MPs, have to do with my organisation? We have a healthy three-month pipeline selling to existing systems.’

This brings us onto our third myth:

Myth 3: It can all be ignored

We don’t think this is the right strategy. Whilst the main focus may be on short-term targets and priorities, we recommend all organisations quickly get up to speed on the changes that are happening in the NHS as they may quickly see markets shape or reform. They need to be ready to respond to this when it reaches their line of business. Many of our clients do business with hospitals. Often that’s the right customer, but often, in areas such as early supported discharge, admission prevention or diagnostics, the hospital pays not because it was the right organisation to fund this, but because money was available, newly formed CCGs were still defining their remit and there was some kind of patient and financial benefit, and as the de facto system leader they felt they should.

In a period where hospitals are becoming smaller, with less influence and turnover, this situation might change.  We are not suggesting wholesale restructuring or sales plans thrown out the window, but we recommend all organisations have understanding of what’s to come.

Also, the move to accountable care is one of the few initiatives that has a bottom-up impetus (many areas have been implementing this for a few years), rather than a top down policy push from Skipton House. This is unlike Connecting for Health or, for example, where the push was purely from the top, or the numerous, successful, local pilots which weren’t adopted and spread nationally.

To finish, a further thought on why accountable care is happening. The opposite of the triple aim, is the triple fail: an event that is high cost, worsens health and delivers a poor patient experience. Often this sums up many people’s hospital stay.

ZPB are experts in advising, positioning and steering organisations through the complexities of the UK health and care system. We are running workshops for organisations looking to understand the changing NHS. Please contact me at if you’d like to discuss planning one for your organisation. 


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