Independent providers won't run ACOs due to politics of 'privatisation'

There has been much made recently over whether the NHS’s shift towards accountable care, and in particular the potential development of accountable care organisations, represents the “privatisation” of NHS services.

It is an issue currently being considered by the Commons health select committee as part of their inquiry into integrated care – which provides a welcome opportunity to examine those claims in more detail.

But what does the independent sector itself think?

ACOs

The first thing to say is that the sector welcomes the shift towards greater coordination of care and the development of sophisticated population health management capabilities in the NHS.

Internationally, it is the case that much of the expertise in mobilising and running population health resides in the non-statutory sector and there is much for the NHS to learn from this experience, including in key areas such as health analytics and data insight capability.

By partnering with independent sector operators there is an opportunity to think creatively about accessing capital

Second, for coordination of care to be meaningful it must involve all operators in a locality. In planned care, for instance it is inconceivable that in many areas access standards can be met without extensive utilisation of independent sector acute capacity. The same is true for diagnostic imaging.

We have highlighted before the dangers of integrated care systems becoming simply “airless rooms” and it is important that local systems both plan inclusively and acknowledge the importance of bringing in operators from outside that have something transformational to offer, particularly to help relieve pressures on the acute sector.

Third, by partnering with independent sector operators there is an opportunity to think creatively about accessing capital. This could enable step down capacity to be introduced to help with delayed transfers of care, or modernised diagnostics equipment managed and run by specialist independent sector providers.

Stepping back

But what about an independent sector provider taking on responsibility for an ACO covering all services in a geography, which is the question that has received most recent attention?

It is of course the case that the law makes clear any operator whether public, private or voluntary could be asked to lead an ACO and that it is their fitness for purpose and not their ownership type that matters most.

The law makes clear any operator whether public, private or voluntary could be asked to lead an ACO and that it is their fitness for purpose that matters most

But it is also clear to me from discussions with independent sector leaders that they are not expecting to be commissioned to take on full responsibility for running a large scale ACO in the immediate future.

This is partly to do with the politics of NHS “privatisation”, which in the case of large scale ACOs is likely to make it very difficult for a commissioner to award a contract to an independent sector operator.

Risks

But there are also genuine concerns over the risks to which any operator taking on a large scale ACO contract would be exposed.

A failure to set the commercial terms of an ACO appropriately – for instance, by a commissioner disclosing inaccurate or incomplete data on the cost of existing service provision – could leave the successful bidder in the position of having to absorb very substantial unexpected costs onto its own balance sheet.

A failure to set the commercial terms of an ACO appropriately could leave the successful bidder having to absorb very substantial unexpected costs

This was just one of the issues identified as causing the collapse of the Uniting Care contract in December 2015 and it is unclear the extent to which these commercial issues have been resolved in the intervening period.

For independent sector providers, this throws up material issues given the fact they cannot access “bailouts” from the centre and are reliant on contracts being set at a deliverable level.

So, as the NHS leadership seeks to carry forward its laudable ambition of introducing sophisticated forms of population health management into the NHS, it can count on the support of the independent sector which through its capital, capacity and capability has much to bring to the table.

But in the current environment it seems unlikely that taking on responsibility for running a large scale ACO will be central to that contribution.