House of Commons Library

Accountable Care Organisations

Published Tuesday, January 9, 2018

This Commons Library briefing paper looks at the introduction of Accountable Care Organisations (ACOs) in the NHS in England, the development of the ACO policy, and comment on its potential impact.

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An Accountable Care Organisations (ACO) is a model of healthcare organisation where a provider, or group of providers, takes responsibility for the healthcare provision of an entire population. There is no fixed definition of an ACO, but the organisation usually receives an annual, capitated budget to deliver contractually agreed health outcomes.

The NHS in England’s Five Year Forward View (2014) agenda focuses largely on the greater integration of healthcare providers to offer a more joined-up service for patients. The current Government views ACOs as a way to help deliver this.

In July 2017, NHS England announced eight areas which would become Accountable Care Systems (precursors to ACOs). In August 2017, a draft ACO contract was also introduced, which will allow Clinical Commissioning Groups (CCGs) to choose to commission ACOs in their areas. The Government has argued that some regulatory changes will be required in order for the ACO contract to be used.

The two month consultation around the draft ACO contract has been controversial, and a judicial review has been launched against the legality of the process. Another judicial review has been launched against the contract by the campaign group 999 Call for the NHS, arguing that the annual, capitated payment method is not permissible under the current regulatory framework.

The proposed introduction of ACOs in the NHS in England has generated some commentary as to a potential increase in private sector involvement, in part due to the model’s origin in the American healthcare system.

This briefing paper explores the above, as well as the future roles of CCGs and GPs in an ACO system.

As health is a devolved area, this briefing looks at England only.

Commons Briefing papers CBP-8190

Author: Alex Bate

Topics: Health finance, Health services

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