Instead of Accountable Care Organisations

The NHS in England is being reorganised, yet again. Jeremy Hunt and his advisors have decided to turn upside down their own previous reforms. Now commissioning organisations (CCGs) and service providers (NHS Trusts) will be brought together into large Accountable Care Organisations (ACOs). How this will work in practice is not clear and rightly there have been calls in Parliament to scrutinise the changes. A coalition of health campaigners, including Stephen Hawking, are also trying to take the Government to court to stop these plans.

In one minimal respect these changes are positive, for they could mark the end of the era of the internal market and commissioning. The Government’s austerity programme and the cuts, not just to the NHS, but in particular to social care, have further undermined the ‘purchaser-provider split’ and the complex tariff arrangements that are used to fund NHS service provision. Now, as demand rises, and real funding falls, it makes no sense to continue with this pseudo-market model, one that has dominated the NHS since 1992.

However the threat of continuing privatisation to the NHS continues. In fact the term ACO is an American term which is used to describe an insurance-based model for funding healthcare, one which is generally associated with low quality and highly rationed care. It is entirely feasible that the NHS is being parcelled up into large chunks which can then be taken-over by US companies for profit. Even if this does not happen immediately there is every sign that these new arrangements will worsen the quality of the NHS:

  • Even more privatisation, for larger contracts, won by larger profit-making corporations
  • Even more rationing according to bureaucratic tick-box systems
  • Even less connection to local communities and people
  • Even more centralisation of money and jobs in fewer places

Even if ACOs are not privatised they are certainly likely to adopt the kind of heartless rationing and contracting systems adopted by US companies to control costs. They will be so out of touch with real communities that anything more human or positive is not available to them.

Inevitably central government will try to reassure the public that they do not intend to do any of these things. They will likely talk about ‘working in partnership with local communities’, increased ‘personalisation’, ‘asset-based approaches’ and addressing the ‘social determinants’ of health. But, after seven years of austerity and regressive social policies none of these reassurances are remotely credible. Taking money, power and authority away from local communities and away from local government will only reduce local influence on the NHS. Austerity is a policy of central government and further centralising the NHS further will only make things worse.

Despite the lack of any clear democratic mandate, any clear policy and any legislation, there remains considerable momentum behind the drive from Whitehall to reorganise existing NHS organisations into ACOs.

So this short paper tries to offer some provisional answers to just two questions:

  1. What should we do in the short-run to resist these changes?
  2. What kind of new arrangements should we seek in the medium and long-term?

Urgent next steps

The first urgent priority must be for all those who care about the NHS and its future to make clear, at every opportunity, that they are opposed in principle to the development of ACOs, for the following reasons:

  • No case has been made for the use of the ACO model. There is no research to support taking a model developed in the worst-performing country for health care in the developed world (the USA) and using it to replace the system used in the best health care system in the developed world (the NHS).
  • In fact these changes are just a smoke-screen for cuts. The Government should be pressed to properly fund the NHS and social care, not to make radical organisational changes that will waste more money on new salaries, redundancies and consultancy fees. We should not be wasting our time on planning organisational change but overturning austerity.
  • There is no democratic mandate for the reforms. There is no legislation to support them and there has been no Parliamentary scrutiny of them.
  • ACOs are not statutory bodies and so, as the functions of local statutory bodies are moved into new regional entities, that work can be bundled together and privatised.
  • ACOs themselves are not democratic. They are not accountable to local people, neither directly by election, nor indirectly by the involvement of elected local councillors on their board.
  • ACOs do not respect local democracy and are disconnected from local identities. Their boundaries frequently make no sense to citizens nor to existing institutions. For example, the proposed South Yorkshire & Bassetlaw ACO effectively annexes part of Nottinghamshire into Yorkshire.

In particular, it is surely the duty of local government to reject this shift in policy and to refuse to cooperate with plans to establish ACOs (or similar non-statutory regional bodies).

Principles for change

Most of us who want to defend the NHS are united in wanting to see an end to the era of internal markets, privatisation and commissioning. However this does not answer the question of how we would like the NHS to be organised instead.

Even prior to 1992, when the era of commissioning began, the NHS has had a history of being constantly and pointlessly reorganised by Whitehall and London-based politicians. We all want a National Health Service – but not every decision can or should be made in London by a bureaucrat or politician. The NHS is one of the largest and most complex organisations in the world. Decisions need to be made at many different levels and in many different contexts, by citizens, professionals and democratic bodies.

To begin with we need to reflect more deeply on the principles that should underpin the long-term organisation of the NHS, and so I am going to propose 5 broad principles:

  1. Justice – The organisation of the NHS must be designed to promote social justice, not just by providing free high quality healthcare to everyone, but also by promoting income equality within its own salary structures and social justice in wider social structures (e.g. housing, social care, social security and education).
  2. Democracy – The NHS belongs to the people and it must be accountable to the people through established democratic structures and appropriate statutory bodies.
  3. Subsidiarity – The NHS is a large and complex system and decisions need to be made by the right people, at the right point. Some decisions should be left to citizens or to professionals; others must be made at the level of the local community or at appropriate regional levels. Only those decisions which really must be made nationally should be made in Whitehall (or Edinburgh, Cardiff or Belfast).
  4. Citizenship – The NHS must encourage a culture of trust, openness and citizen responsibility at every level of society. It is a public good, part of our common and shared inheritance and we all have a shared responsibility to develop and improve it for future generations.
  5. Stability – Constantly changing managerial structures undermines effectiveness, innovation and trust. The NHS needs to work within a framework which is much more stable over time. The costs of constant reorganisation far outweigh the putative and contradictory benefits of any proposed reform.

Democracy and the NHS

If these are the right principles then our goal over the long-run must be to push for significant positive reforms to apply these principles and to protect the NHS and strengthen its status as part of our common inheritance.

In outline the following steps for positive reform can be envisioned:

1. Constitutional reform – The right to free healthcare for all should be a constitutional right, protected not just by law but by further constitutional measures that would limit the ability of politicians to interfere unduly in the principles of the NHS or in the structures of local government. Such rights could be established alongside other economic and social rights – rights which the UK has signed up to internationally – but which it currently does not respect at home. Under the current administration the prospects of fundamental and positive change may well be very poor, but looking to the future it is quite possible to imagine changes in the constitution of the UK that would better safeguard the NHS and our social and economic rights more generally for the future.

2. Democratic control – Central government must guide overall policy and help define the general rules within which local people work. However there is no reason why people in different areas cannot make their own decisions about how they want to organise health care in their own communities. Developing a strong and sustainable welfare state means working through and with citizens and ensuring democratic accountability.

3. No ACOs – The idea of Accountable Care Organisation must be abandoned. It refers to US system which we do not want and which offers no value. It suggests additional accountability, but it in fact it is about reducing accountability. The idea is worse than useless and must be abandoned.

4. Stable local structures – Ideally the NHS would be organised around a stable configuration of local government boundaries and one that allowed for regional, local and neighbourhood levels of discretion, with suitable democratic structures at every level. However, currently local democracy in the UK is very weak and needs to be improved. Until better systems are developed the NHS must be organised around existing local authority boundaries. Any plan to make decisions at a level larger than the local authority – let’s call this an Area level – should only be possible with the explicit agreement of all local authorities within that area. It is totally unacceptable that NHS structures can be gerrymandered by Whitehall. Local authorities must agree to the creation of any area or regional structures that includes them.

5. Governance – If we accept the need for a larger decision making body beyond the boundaries of the local authority then let us call these Area Health Authorities. If there are no direct democratic elections to such Area Health Authorities then only existing local councillors from local authorities within that area have the necessary mandate to speak up for local people. Hence the board of the Area Health Authority must, as a minimum, be made up by a majority of locally elected councillors.

6. Management – Taking on the role of overseeing local health services is complex work and so a proportion of the significant existing resources currently spent on management within the NHS should be shifted into the direct control of local authorities.

7. Legality – Until any new statutory body, like an Area Health Authority, is created then the primary responsibility for delivering NHS responsibilities must lie with either an existing statutory NHS body or a local government body. There should be no risk that the management and over-sight functions are delegated to some non-statutory body which can be privatised or can avoid direct democratic scrutiny.

Although many of these potential reforms would certainly not be supported by the current Conservative Government it is not clear that other political parties would not support these principles. In fact several Conservative MPs are showing signs that the creation of ACOs is one crazy reform too far.

Nor is there any reason why local councils could not adopt some of these ideas a goals as part of their negotiations with the NHS, whatever the pressures from Whitehall. Currently Health & Wellbeing Boards are supposed to act as the guarantors of locally defined plans and appropriate shared accountability between the NHS and local government. In the short-run it should be these bodies who decide how local services are organised.

Shifting power away from local authorities and towards bureaucratically defined and unaccountable areas will do nothing to improve the NHS or to resolve its funding problems.

A short note on social care

There is a tendency to run together health and social care as if they are, or should be, one service. In fact the idea that health and social care can or should be integrated is a very dubious nostrum. There are good reasons why social care has remained stubbornly distinct from health care, not just in the UK, but around the world:

  1. Social care is predominantly focused on helping people live their lives as citizens, by respecting and supporting person autonomy – it is not a form of health care where the professional is largely the expert.
  2. Social care, because it is about the whole of life, must also be sensitive to issues of housing and education – not just health care – in fact for children education is a much more significant partner than the NHS.
  3. Social care is best organised in partnership with citizens, families and local communities, with support by systems of funding controlled by individuals.
  4. In practice social care can be organised by people and families, with support from national or local funding, and underpinned by local services. There are good reasons why local government will continue to play an important role in shaping social care and other local community services.

Clearly the current crisis in funding, which particularly targets social care and local government, is caused by the ideological commitment of the Government to drive down the level of public spending. This is putting the current system under tremendous strain. However this is not a reason to shift adult social care into the hands of the NHS. Instead local government must insist on their right to play its part in ensuring that local healthcare systems are designed to respect the rights and needs of local people.

Local government must not become a bystander, watching on as the NHS is pushed through another wave of chaotic organisational changes, instead it should be the champion of the interests of local people.


The idea that the NHS should be democratic and more accountable at a local level has been around along time. In fact it is, as I understand it, the policy position of the Socialist Health Association. However the debate about a more local NHS was derailed by the 1992 market reforms and since then the drift of policy has been to increased bureaucratisation and to central control.

Personally I think the Labour Party’s new stance, committing itself to the full renationalisation of the NHS, is entirely correct. I am hopeful that the era of mindless neoliberalism and meritocratic top-down management is finally tottering (if far too slowly) to a close.

So now is an excellent time to start thinking about the kind of NHS we really want.

We certainly want end to the crazy market systems; but surely we do not want to go back to an era of centralisation and to constant reorganisation. Perhaps it is time to consider entrusting the NHS to us – the people.

Further reading

These ideas reflect a long tradition of human rights developments around the world. These publications may be of interest:

Duffy S (2017) Heading Upstream: Barnsley’s Innovations for Social Justice. Sheffield: Centre for Welfare Reform.

Hunt P (2017) Social Rights Are Human Rights: but the UK system is rigged. Sheffield: Centre for Welfare Reform.

Potts H (2008) Participation and the Right to the Highest Attainable Standard of Health. Colchester: Human Rights Centre, University of Essex.

Potts H (2008) Accountability and the Right to the Highest Attainable Standard of Health. Colchester: Human Rights Centre, University of Essex.

First published by the Centre for Welfare Reform.

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  1. brizcox says:

    This a commendable argument. One additional aspect also to keep an eye on and resist is the move towards hypothication of the tax take for the NHS. Once we pay a health tax it will be easy to shift this entirely over to the private sector as an individual health care insurance payment. Together with the Accountable Care Organisation we will have privatised our health system in two steps.

  2. Mervyn Hyde says:

    Funding is crucial in understanding how the Neo-Liberal agenda has been rolled out, it should also be noted that structural simplicity is essential in creating an efficient delivery of care.

    Fragmentation is the means by which the Tories isolated and sold off large chunks of it, we need a financial structure that is based on national needs divided up on the old system which are area based with regional connectivity.

    Not on the same basis as Devo Manc but as with the old structures first set up under the NHS, that is what made it a national health service.

    The Reinstatement Bill is really the only game in town, it is ready to go and devised by people who understand the Needs of the NHS and people.

    Most will say unwittingly, that we can’t afford the money and the disruption, which is false in both cases.

    We can afford it, the government is the issuer of our currency and can create it without limit, that is a fact, why have we been told differently is down to who controls the information we receive and who’s interest it serves.

    If we allow the privatisation to continue, then the NHS will not be a universal care system and provision will depend on the individuals ability to pay, currently in the USA 40% of people receive either poor access or none at all.

    So we have all the money we need to pay not only for the NHS, but all our public services, the only thing standing in our way is this Tory government.

  3. Renationalisation is vital. But why does nationalisation equal centralisation? And, if it doesn’t, why could there not be democratic input into decisions at more local levels. I fail to understand why socialism means handing the power to spend over £100 billion pounds to bureaucrats in London and to any more local bureaucrats they appoint. The NHS can easily be nationalised, held in common ownership by the people, and democratically accountable to local people for its decisions.

  4. Tom Lake says:

    The abolition of the internal market is not a minor matter but a change which reverses decades of policy across much of government. With the changing needs of the population – people having multiple long-term ailments – the need for integration is great.

    A key question for any large organisation is how to arrange for enough autonomy and independence for its sub-units while maintaining commonality of purpose and effective cooperation and collaboration. Statism is not the answer.

    Rationing is not the problem – the problem is the lack of resources. If you are short of resources you can either have rationing or a famine – which do you prefer? It is obvious that we need to get the resources back into the NHS and to the social determinants of health and wellbeing.

    At the moment in my area of Berkshire West we are about to start with an Accountable Care System ( a collaboration of CCGs and providers) and the management will say that we are following the New Zealand Health Boards model more than the US ACO model. So perhaps a change of name is the first step we need, and the easy one.

    I don’t understand your objection to contracting. If you plan a budget and divide it appropriately between hospitals and community nursing then you will effectively have contracts. Are you proposing an unplanned free for all? What we don’t want is the internal market.

    I absolutely agree that health bodies need to have all the standards and obligations of public bodies. We could also usefully demand open books collaboration, public supervision.

    I can’t understand why people are so keen on the old structures. We certainly need the Secretary of State to have responsibility for the provision of a national health service, but I can’t say that everything was wonderful under the PCTs. In Reading South we had plenty of poor GP practice, poor diabetic care and so on which did not improve until the CCG took on primary care commissioning. Sorry if it is not your experience but here at least the evidence for clinical leadership via CCGs is positive. That doesn’t mean we need competition and an internal market but it does indicate a strong role for GPs in local management. And by the way Dr Somerville Hastings in his 1928 paper “The Future of Medical Practice in England” said, “In my own experience, at any rate, it is often a much more difficult problem to make a diagnosis and decide on the best line of treatment for a given patient than to actually carry it out. The general practitioner, to whose province this must mainly fall, must, therefore, always be the most important person in the medical hegemony, and any scheme of medical service that fails to take this into account is of necessity foredoomed to failure.”

    1. Martin Rathfelder says:

      There is always rationing of healthcare. Everywhere. We can always spend more money on less effective treatment. The only question is how is the rationing to be conducted.

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