• New type organisation could make ACOs less controversial and avoid tax issues
  • National bodies in talks with areas making the most progress
  • Social care and local government could be represented in governance

A new form of NHS organisation may be created to run the NHS’s first “accountable care organisations”, to avoid tax problems and potentially make them less controversial.

NHS Improvement and NHS England are in discussions about the option with the areas closest to introducing full ACO style arrangements.

Several sources involved in discussions told HSJ that using dedicated NHS trusts or foundation trusts – potentially with significant changes to their governance – to run or lead ACOs was a likely option.

They cited several reasons:

  • avoiding additional VAT charges on non-NHS organisations;
  • avoiding staff concern about moving out of the public sector; and
  • reducing political controversy about the private sector role.

ACOs could be led or hosted by NHS trusts or foundation trusts already providing services in the area – but these are often not trusted enough by GP practices or social care providers. Having primary care “fully integrated” is fundamental to the most ambitious ACO models.

This has led to a strong interest in creating dedicated NHS organisations, several sources said.

These could potentially be created as completely new NHS trusts. However, officials are looking at whether it may be easier to “repurpose” shells of trusts that are no longer needed or “spin out” new FTs from existing ones in a “demerger”.

However, those developing ACO trusts want them to be very different to existing NHS providers. They need GP practices to have strong ownership and/or control. One relatively straightforward idea being considered is primary care representation on the board/executive, including the possibility of a GP chair, and via dedicated FT governors. For GPs who do not become employed by the trust, another method may be tying its income to that of the trust via a risk/gain share.

Social care and local government could also potentially be represented in the governance of an ACO foundation trust. It is unclear whether new regulations may be needed to make some of this possible.

ACO trusts/FTs will be distinctive in that they are expected to hold capitated budgets for most of the care of their population, some of which will be bought from other providers.

The areas most advanced in developing ACO type structures are the City of Manchester and Dudley in the West Midlands. They are hoping to go live in the spring. Other areas, including Stockport, Sunderland and Northumbria, have explored them but are further behind.

Labour last week called for a debate about ACOs in the Commons, and two groups of activists are currently challenging NHS England and the Department of Health over a draft ACO contract and associated changes to regulations published nationally.

NHS England and NHS Improvement were approached for comment.

New form of NHS organisation planned for first ACOs