Accountable Care Systems – Flavour of the Month

NHS reorganisation

The always excellent ‘Health Service Journal’ (HSJ) analysed potential care reforms under a future Conservative Government in its 30 May 2017 issue. At the time the HSJ article was written and published most observers predicted that the future Conservative Government as of 9 June 2017 would have a huge majority. This turned out not to be the case so some of the controversial reforms detailed and picked over below may be delayed or may not now come about.

The article led on the fact that NHS England (NHSE) is preparing to announce the first set of the newly christened ‘Accountable Care Systems’ (ACSs) – see below. (The NHS’s 12 month nomenclature ‘journey’ began with the US-style ‘Accountable Care Organisations’ in summer 2016, which then morphed into ‘Accountable Care Partnerships’ and is currently ‘ACSs’!). Still we shouldn’t get too hung up on the naming merry-go-round – but we should focus on the potentially chaotic impact of ACSs. On 15 June 2017 NHSE duly rolled out the pioneer ACSs – details on this later in the newsletteron. The HSJ author is Dave West and in his very extensive review and analysis he identifies many stumbling blocks to achieving ACS nirvana.

First though let’s just refresh ourselves with what ACSs are all about:

  • The major STP delivery vehicles for significant financial cuts and improved ways of working in delivering healthcare and social care services
  • In fact, it’s now clear that eventually all STPs will become ACSs
  • Consortia of NHS Trusts, CCGs, Local Authorities, GP Federations, charities, voluntary bodies and private companies
  • 10/15 year fixed price contracts to deliver specific services, to specific populations at a price calculated on the basis on an annual ‘capitation’ amount (£xxx/head multiplied by the population number)
  • Service suppliers are paid a bonus if they can demonstrate successful cost cutting
  • Attempting to deliver integrated healthcare and social care
  • Attempting ‘…to solve the problems of fragmentation, misaligned incentives, duplication of efforts, unclear access and long term system sustainability’
  • The trashing of the Health & Social Care Act 2012 ‘marketisation’ model of commissioners and service suppliers
  • Ringing the death knell for CCGs, as ACSs will hold sway across most of the care service landscape and will determine who gets paid for what and how much.
  • ACSs will be major private organisations holding £billion+ contracts
  • As with PFIs we might see ACS contracts traded and changing hands over time

Dave categorises the stumbling blocks into groups. I have attempted to summarise his enlightened scrutiny and added some of my own comments:

Organisational Structure/Business Type

Just what kind of organisational structure(s) will ACSs adopt? Also what business type will they operate under? (At an NHS NW London ACP seminar in September 2016 David Freemen (ACP boss of five CCGs) stated that in his region each 10 year ACP (now ACS) would choose its own business type (e.g. alliances, joint ventures, PLCs, PPPs?). BTW he envisioned five ACSs in NW London – all of which would be functional and not geographic.

ACS Details

Where are the ACS details? Various Local Authorities (including Ealing, Hammersmith & Fulham, and Liverpool) refused to sign up to their STPs because of the paucity of details. Councils in Staffordshire, Devon, and Oxford have voiced serious concerns about funding challenges and lack of information inherent in their STPs. All Councils have battered social care budgets which are under threat from the equally cash-strapped healthcare bodies. Is the Master/Slave relationship between healthcare and social care commissioners and services suppliers truly to be ‘consigned to the dustbin of history’?

How do GPs and GP Federations fit into this? What about patient choice? If there are multiple ACSs across the same geography, just how will they co-exist? And if not all healthcare and social services are delivered through ACSs, how do the non-ACS ‘legacy’ service suppliers relate to the ACSs? No doubt CCGs will soon atrophy and be powerless – so who would ‘commission’ these legacy non-ACS services?

Social Care

Current social care funding, policy and service level quality is a shambles. Future social care funding, plans and policies are in chaos

Are ACS Solutions Viable?

Re-organisation will probably not create ‘accountable care’. Scrutiny and evidence is needed to verify that ACS ‘solutions’ are likely to ‘solve’ the current problems.

Accountability and Governance

Under the current proposed arrangements, local accountability for money spent and service improvements is clearly missing. A massive re-organisation (back to PCT-type directly allocated budgets) might help here. Where is the governance structure for ACSs and for STPs themselves for that matter? Almost any ‘stay the same’ or ‘revolutionise how we do things’ is unlikely to address the fact that funding is not meeting unavoidable cost pressures.

No Immediate Universal Roll-Out of ACSs

Surely launching a few ACSs across England – which embody untested funding/allocation models – is a huge risk even if they all succeed (which is unlikely given previous ACO-type attempts). It is by no means clear just how ACS success might be ‘measured’. It won’t make accountability any clearer – and we’ll have a patchwork quilt of ‘good, early’ regions with ACSs and ‘bad, later’ regions with no ACSs. Seven million English citizens could benefit from these early ACSs – if they succeed. This leaves 58.5 million citizens being serviced by (sometime) later ACS service configurations.

No Parliamentary Scrutiny

At last someone has suggested submitting the STP/ACS approach to parliamentary scrutiny (not before time either). If what comes out of this is intelligent scrutiny, it must be worth doing. If the MPs and the Lords throw it out – so be it. But if they bless it (and hopefully improve on it), then at least we might move nationally in a co-ordinated, legal fashion.

Administration Costs

Scrapping CCGs won’t save us that much cash. Running the CCGs in England ‘only’ costs us £1.2 billion. After scrapping the commissioner/service supplier model, you still have administration costs. Trailblazer DevoManc has an annual administration budget of £8 million for example. Thus would translate to £152 million across England in a post CCG world.

CCGs Merging Before Dying

CCGs could merge. (In Ealing where I live our CCG is on its second marriage with other adjacent CCGs!). Dave West sees financial risks of distraction and disruption caused by CCG mergers. In the world of NW London CCGs there are clear conflicts of interest. Ealing CCG should be concerned more about not closing Ealing District General Hospital than the CCG NW London ‘Collaboration’of eight CCGs should be. The (non-statutory) CCG collaboration should be more concerned about attempting to provide healthcare service equitably to 2.1 million people across the whole of North West London.

Overhead Slashing

Accountants will always be keen on merging and eliminating costly duplication of services like HR, admin, PR, IT and expensive management. However merging NHS England (NHSE) and NHS Improvement (NHSI) might not make either organisation more effective. Some have also suggested throwing Health Education England and Public Health England in with NHSE and NHSI. This would create a centralised monster of some 15,500 staff. Mergers can also be very messy with long running ‘tribal’ battles being fought over, often for years. There are reports of continuing staff turmoil at NHSI. This follows the creation of NHSI over 14 months ago through the merger of Monitor, the NHS Trust Development Authority and some other smaller NHS patient safety, change management and management development specialist bodies.

And anyway Dave West sensibly states that ‘most of these people should rightly be put back in separate, credible local and regional tiers.

Brexit and a Labour Government – Game Changers?

Brexit may (or may not) deliver us from the European Commission’s Compliance and Competition Rules. If a Labour Government should come to power it has promised to repeal the Health and Social Care Act 2012. Should that possibility heave into view I’m sure HSJ/Dave West, I and others will put the Labour care services proposals under the microscope.

Mental Health – the Bridesmaid and Never the Bride

The herd of elephants in the room not mentioned by Dave West/HSJ is mental health. The Tory manifesto promised £1billion extra cash by 2021 The pro rata rate across the 60 NHS Mental Health Trusts would mean a 16.8% increase in income for my regional Mental Health Trust (WLMHT). Now that could be beneficial and the current four year wait by patients in WLMHT for a programme with a psychologist might be reduced – if trained pychologists were to become available. However should an ACS take over providing mental health and social care services, would the extra money be given to WLMHT or to the ACS? If it’s the ACS, the annual capitation amount determined by the ACS would determine how much cash was given to WLMHT.

Eight ‘Blessed’ ACSs Set Out on a Journey to Who Knows Where

Like the Pilgrim Fathers leaving Plymouth bound for the ‘unknown’ New World in 1620, Accountable Care Systems (ACSs) set out in England bound for who knows where on 15 June 2017. As Simon Stevens – NHS England’s boss – waved goodbye to these ACSs, he confused onlookers by changing the mission statement from what he had first trotted out with consultants McKinsey & Co at the World Economic Forum (WEC) meeting in Davos in 2012. Instead of 10/15 year contracts he gave them four year, grant-aided contracts. Instead of robust fixed price cost cutting mandates, he gave them each (pro rata) £14 million in annual grants. He promised that in time all 44 Footprints would morph into Accountable Care Systems..

Just who are the eight grant funded ACS ‘experimenters’? Let’s now have a peek at what we know about them. I’ll also throw in what I know of the ACS manoeuvering in the devolved Greater Manchester (‘Devo-Manc Health’) project – which Stevens describes as having ‘advanced arrangements’. There’s also the Northumberland ACS, and the potential ACS in West, North and East Cumbria. Finally we’ll pick over the bones of the ACS failures at Cambridge and Peterborough and Torbay and South Devon.

South Yorkshire and Bassetlaw ACS

This will be one of the first ACSs to becomes operational. Its aim is to ‘…link local hospitals together to improve their clinical and financial viability’. The consortium line up is seven NHS hospital trusts – covering 15 hospital sites, which employ 45,000 staff and service 2.3 million residents. It calls itself an ‘Acute Care Federation’.The nascent ACS (an NHS ‘Vanguard’ site in 2015) claimed benefits already achieved include saving almost £1 million by pooling purchasing and using a shared IT system.

Frimley Heath ACS

Known as Frimley Health and Care System (FHCS) it is a massive consortium of 30 public and private care providers. Five CCGs, five GP Federations, 10 Local, District and County Authorities, two Ambulance trusts, five mental health and community providers (including Virgin Care) are included. 750,000 residents will have all their health and social care service needs provide by the FHCS ACS. Cuts to hospital services are on the menu and replacement by our old friend ‘out-of-hospital services’. The logistics, management and political skills needed to orchestrate 30 mostly public bodies will be immense. It all may prove insurmountable.

Nottinghamshire ACS

The Nottingham ACS is made up of over seven public bodies and the private healthcare company Circle Health. It appears to be the merged entity of two NHS Vanguard sites. The consortia calls itself ‘The Greater Nottingham Transformation Partnership’. Its plan is ‘to deliver whole system integration of hospital, social and primary care with a single outcomes -based capitation contract’. Data sharing between primary, secondary and GP service providers is a key feature of the plan.

Blackpool and Fylde Coast ACS

Two CCGs, two NHS Foundation Trusts, Lancashire County and Blackpool Councils have united as the ‘Local Health Economy’. The focus is supporting patients with long-term conditions, more community support and ‘patient centred services’. In October 2015, the consortium received an NHS England ‘Transformation Fund’ grant of £4.26 million. Apparently 1,000 people were being cared for as from 1 April 2016. Plans to extend the project to embrace Pennine Lancashire, Central and West Lancashire and Morcambe Bay were announce on 31 March 2017.


Three Hospital Trusts are partnering together in this ACS. Its aim is to establish sustainable models of care for in and out-of-hospital care. A key goal is meeting the needs of local people 24 hours a day and seven days a week.

Luton, with Milton Keynes and Bedfordshire

This ACS is not one of the 2015 NHS Vanguard sites. The ACS is made of 3 CCGs, 4 Local Authorities and 12 NHS bodies. But there is dissension in the ranks. The Mayor of Bedford and Council leaders complained that they were pressurised to sign up to the ACS. They refused. A Governor of Luton and Dunstable University Hospital also went public and voiced his concerns about STP/ACS service closure plans and increasing bureaucracy in care delivery.

West Berkshire

Another ACS which has no Vanguard heritage. NHS Trusts and CCGs are partnering to organise primary care into larger GP practice ‘hubs’. Some outpatient services will move from hospitals to hubs. There will be increasing services provision for the frailest. Mental health services will be expanded. Separate providers will be required to integrate their services.


No Vanguard heritage. This ACS comprises 3 Hospital Trusts, 1 Ambulance Trust, 2 CCGs, 1 County Council, and 1 GP Federation. Its aims are fairly bland i.e. improvements in local health and care. When ACS details were leaked in December 2016, complaints were made by a local GP, Oxford Patient Voice and the Oxford East MP. Major complaints were about secrecy and lack of public debate.

Greater Manchester

Devo-Manc Health is the biggest, most advanced (and most complex) ACS in England. The ACS plan was launched in December 2015. It’s integrated healthcare and social care services on a grand scale – 2.8 million people, 37 statutory bodies, 100,000 staff and 563 care homes.

In March 2016, Greater Manchester took control of an annual care services budget of £6 billion. NHS England chipped in with a ‘transformation’ grant of £450 million over five years. But, here’s the killer…by 2021 annual savings of £2 billion have to be achieved. So here we are 15 months later and there seems to be little or no announced progress on cost reduction, care integration or service improvements.

Have 37 statutory bodies, including six different business models ever worked successfully together on any project in England?


Dudley CCG launched its procurement process in December 2016. The Invitation to Tender asked for responses from organisations to run integrated population health and social care services for over 30,000 people. The ACS ‘flavour’ is labelled a ‘Multi-speciality Community Provider’. The intention is that a single entity will deliver services including community based physical health for adults and children, some outpatient services including GMS, PMS and APMS (flavours of GP contracts), local enhanced services, Urgent Care Centres and GP out-of-hours care, while adult social care services will be phased in. GPs can, bizarrely, choose to opt in or opt out of participating in the ACS.

Healthcare providers were invited to bid for the ACS contract in June 2017, with a submission deadline of 15 July 2017. The 15 year contract, worth up to £5.4 billion, is expected to go ‘live’ on 1 April 2018.

Surrey Heartlands

Simon Stevens announced a devolution agreement in Surrey Heartlands in June 2017, comparing it to the deal arrived at with Greater Manchester. The agreement ‘will bring together the NHS locally with Surrey County Council to integrate health and social care services’.

Cambridgeshire and Peterborough

This was the first ACS-type car crash in England. This £800 million older people and community services five year project collapsed in December 2015. It ‘lived’ for just eight months. The consortium partners were Cambridge CCG, Cambridge University Hospitals NHS Foundation Trust and Cambridge and Peterborough NHS Foundation Trust. The failure is variously attributed to ‘failure to reach agreement on contract cost’ and ‘lack of financial sustainability’. The two Trusts shared ‘unfunded costs ‘(i.e. losses) of £16 million.

Torbay and South Devon

Here the initial consortium line up was South Devon and Torbay CCG, South Devon Healthcare Foundation Trust, Torbay and South Devon Foundation Trust, Torbay Council, South Western Ambulance Services Foundation Trust, Devon Doctors Ltd and community pharmacies. The plan was to develop new Urgent Care Centre facilities in two areas. Primary care records were to be shared with the out-of-hours urgent care provider. Set up in October 2015, it planned to use a system provided by Kaiser Permanente (KP). KP is an American healthcare and hospital gaint with sales in 2015 of $60.7 billion.

But…it’s all going wrong. Torbay and South Devon Foundation Trust has pulled out of the ACS claiming its dislike of the risk sharing aspect of the contract. Torbay Council has revealed a £12 million overspend by the ACS and has warned of substantial risk to the Council.

Whatever Happened to Social Care?

The total NHS England grant, over four years, propping up the chosen eight ACSs is £450 million. Stevens emphasises that these eight ACSs are in’…areas of national priority such as cancer, mental health, primary care and reducing the strain on A&E. In the HSJ report of the Stephens’ announcement, it’s very concerning that none of all his ‘care’ platitudes mention social care. Was this deliberate or an error?

ACS Failures So far Concern Finances – Never Mind About Service Quality or Quantity!

What is missing from the Stevens announcement or in publicly available details on the extended line-up of ACSs are vital ‘ACS life or death’ settings of the annual capitation fee to be charged. For example in the Frimley ACS if the annual capitation amount is set at £500, then the annual ACS budget for the 750,000 residents’ health and social care would be £375 million. The total four year budget would be £1.5 billion. If the capitation amount is doubled to £1,000 then the annual budget is £750 million and the four year budget is £3 billion. As the oft-quoted ‘Alzira Model’ (ACS) in Spain showed us throughout 1997 to 2012 – the capitation was set too low (204 Euros) and the ACS (RSUTE consortium) failed. Compensation paid out by regional government was 69.3 million Euros. The ACS consortium was re-constituted (RSUTE II) at a higher, and progressively higher, capitation amount (379 Euros in 2004 up to 639 Euros in 2012). Under the RSUTE II consortium there were doctor shortages, a doctors’ strike and continued staff dissatisfaction. According to a study carried out by the Universities of Zaragoza/Manchester and Manchester Business School, there were allegations that the consortium ‘cherry picked’ the most profitable medical and surgical specialities. At the same time it was referring HIV and other chronic disorders to other non-RSUTE II hospitals. The annual bill for regional government was very high.

Now it’s no surprise, in a way, that the Cambridgeshire and Peterborough ACS and the Torbay and South Devon ACS allegedly failed because of financial problems. The third ‘strike’ against English ACSs was the indefinite postponment of the Northumbria ACS. It was due to go ‘live’ on 1 April 2107 – but didn’t. What brought this one down was Northumberland CCG’s coming clean and admitting it had annual debts of £41 million.

North West London ACSs Not Amongst the ‘Chosen’ Ones

On a parochial level I do find it interesting and uplifting that none of the ‘Accountable Care Partnerships’(ACSs in June, 2017-speak) for caring for the elderly mentioned in the October 2016 North West London’s (NWL’s) STP have been selected for early grant funding and implementation. Could it be that the inspired, committed and continuous opposition in NW London by activist groups is having an impact? Ealing Save Our NHS, Hammersmith & Fulham’s (H&F’s) Save Our NHS Hospitals and Brent Patient Voice deserve particular praise here. Also Council Leaders Steve Cowan (H&F) and Julian Bell (Ealing) must also take some credit in slowing down the STP steamroller by refusing to sign up to the NWL STP.

When Will Grants be Replaced by Cost Savings?

In all the surviving ACS and ACS-type projects, few metrics can be found in the public domain which measure cost savings or service improvements. All the ACSs seem to be propped up with NHS England grants. With just three years to go before Stevens’ 2014 Five Year Forward View goals must be realised, when will these chosen few, early adopter ACSs actually achieve significant (grant free) cost savings? When will there be transparently measurable service improvements? Just how much will the early and late ACS s contribute to the Holy Grail of £22 billion annual NHS cost savings across England by 2020?