What’s New in Care Models: Don’t say the O-word

Sign up to receive the What’s New in Care Models newsletter every week.

Welcome to the second instalment of What’s New in Care Models – HSJ’s weekly email tracking progress on efforts to reshape health and care services in the image of the Five Year Forward View.

Each week I will bring you the latest developments – covering the vanguards, devolution, and integration with social care – throwing you a few interesting links and taking the time to explore a single issue in some depth.

Your feedback will be welcomed, and I’d like to include comments and dialogue. So please let me know what you think.

David Williams, senior correspondent, integration

Readers comment: Should providers be involved in service specification?

An interesting comment on last week’s newsletter about the orthopaedic franchising vanguard suggests the plan may yet prove contentious. “What good looks like in orthopaedic care needs to be decided by independent professional bodies and agreed through a national consensus,” They wrote.“It should not be left to an alliance of three hospitals who have a lot at stake themselves in deciding who to assign the kite mark to.”

Meanwhile CCG leader Steve Kell tweeted: “We’ve been here before – specialists set gold standard specs, cost rises++”.

Don’t say the O-word

For all the excitement about it, there is one major downside to the idea of the “accountable care organisation”. It is the word “organisation”, and the pavlovian response it triggers in the NHS, which is to start talking at length about setting up new legal entities, or changing the rules governing foundation trusts.

The term “accountable care system” more accurately describes the original US vision of the ACO, which is for a network of providers acting as one. In this country, avoiding the “O”-word could also focus attention on making the existing systems that comprise the NHS work better.

Some leaders are using “ACS” to describe their adoption of new care models. First we had the health economy around Morecambe Bay– a primary and acute care system vanguard.

Now Berkshire West – which is not a vanguard site – has published some details of its ACS plan in its board papers. Our understanding is that Berkshire West is only unusual in that its plans are fairly advanced and that NHS Improvement has taken an interest. Expect other areas to follow with similar plans, particularly as the sustainability and transformation plan process encourages health systems to explain how they will move towards new models of care over the next few years.

Signatories to an initial agreement in Berkshire West are: Four CCGs around Reading, Newbury and Wokingham; Royal Berkshire Foundation Trust; and Berkshire Healthcare Foundation Trust. Councils, GPs and the South Central Ambulance Service Trust will be looking on with interest.

Here are the key characteristics of the planned Berkshire West ACS:

• The existing CCGs and trusts will continue to exist, and will retain all their statutory duties and liabilities. There will be no transfer of responsibilities, or joint ventures set up.
• There will be a joint, shared leadership team made up of the various parties’ chief executives. Beneath that there will be a joint “management team” made up of other executives.
• The commissioner function will remain, unlike in some lead provider or “ACO” arrangements where substantial commissioning responsibilities are transferred. But, it will be refocused on assessing population health needs, identifying priorities, redesigning services, allocating resources, determining outcomes, managing performance and quality monitoring. Note that the list does not include arguing endlessly over an annual contracting round, or issuing fines to providers for underperformance.
• Back office and estates. There will be efforts to reduce back office costs across the system, addressing functions like HR, payroll, finance, communications and facilities management. Estates will also be reviewed, and there will be a system wide strategy to develop the local workforce.
• Services will be redesigned in chunks. Themes will include prevention, urgent care, elective, long term conditions, cancer, children, and maternity.
• Price equals cost. Forget the PBR pricing regime, which underpays on non elective and overpays for elective care. Berkshire West wants to move to a system where care pathways are made as efficient and effective as possible, and providers are reimbursed according to the cost of providing this optimal care. In practice, that will likely lead to a higher price for emergency and less of an incentive for trusts to rack up elective activity. In turn, this would make it possible to move some episodic care out into primary or community care without removing the income stream the acute trust needs to run a surplus.
• Risk sharing. Changing care pathways will probably create double-running costs in the short term. It will also lead to some trusts getting more income at the expense of others, and this will probably create stranded costs. These will be funded by the whole system, not from one trust’s bottom line.

The “exam question” for the ACS, and for all new models of care, is this: if care pathways are optimised, and the cost of providing those services are reflected in the new prices paid to providers, will the system’s finances balance? Berkshire West’s providers are in deficit, and although the CCGs are in surplus, the system as a whole is in the red. It will be a few years before we know whether the ACS model will change that.

One final point: It is clear that for a system to operate like this, regulatory rules will have to be interpreted and enforced differently. For instance, it will make little sense to take action over a single trust’s finances when risks are being shared with other local organisations. And, it makes no sense to intervene in a trust which is in deficit if it is likely to balance over two or three years.

NHS Improvement is known to be taking an interest in Berkshire West’s developing plans. It will be worth keeping an eye on whether the regulator feels confident enough in this ACS plan to flex its approach to the local trusts.

Sign up to receive the What’s New in Care Models newsletter every week.