Accountable Care Organisations (ACOs)

Keep Our NHS Public Norfolk, June 2017

Accountable Care Organisations (ACOs) are American. America notoriously treats health care as a commodity, with far higher costs and far worse health outcomes than England.1 Unlike the NHS, which is a single-payer, tax-funded and publicly-provided service covering everybody (although this is being destroyed), US healthcare is a multi-payer, private insurance-based industry with private provision and millions of Americans not covered. ACOs are a key part of this for-profit industry, but they are not needed in the non-profit NHS – or wouldn’t be if it were not being converted to a US-modelled industry, a conversion pushed by the World Economic Forum and not just NHS England.2

The purpose of STPs is to do this by implementing the Five Year Forward View, which establishes ACOs.

The appointment of Patricia Hewitt as Norfolk & Waveney STP lead confirms this trajectory locally: following posts with Cinven, Bupa and other private health companies, a recent post held has been Senior Advisor for the Strategic Communications Segment of FTI Consulting, a US transnational.3 Its website says: “FTI Consulting works to protect clients’ political and policy interests, providing up-to-the-minute intelligence and assessments of policy and political risk, as well as developing and implementing issue campaigns and legislative and regulatory mitigation strategies”, and “the FTI Consulting team acts as clients’ local guide, helping to engage the right policy makers with the right message at the right moment to protect clients’ enterprise value.” 4

The establishment of ACOs in the English NHS is the Americanisation of our health care. Sustainability and Transformation Plans (STPs) are the delivery vehicle for ACOs.5,6 NHS England documents refer also to outcome-based commissioning, value-based commissioning, place-based commissioning, Multispecialty Community Providers and Primary and Acute Care Services, all of which mean ACOs.

Accountable Care Organisations – background:

When President Obama’s Affordable Care Act (ACA) was proposed, the cost of US health care had spiralled out of control. Realising that the Affordable Care Act was a threat to its survival, the US health insurance industry poured hundreds of millions of dollars into political contributions and lobbying,7 with two aims: to fight off pressure from clinicians for a single-payer system8 and to weaken the ACA’s provisions so that private health insurers could maintain their stranglehold on US healthcare.9 The industry convinced politicians that it would reform itself by reducing costs and improving care quality through a hastily-thought up model, the ACO, which would be clinician-led rather than insurer-led as previously. But insurers are now taking control.10 UnitedHealthcare, UnitedHealth’s insurance business, is now a major contractor with US ACOs;11 UnitedHealth is also a major player in our NHS.12

What are ACOs?

A US definition of ACOs is “groups of doctors, hospitals, and other health care providers who agree to share collective accountability for the quality and cost of care delivered to the patients attributed to their ACO.”13 According to NHS England, commissioners will have “a contract with a single organisation for the great majority of health and care services and for population health in the area”.14 A conflict of interest between cost and quality is built into ACOs: they keep a share of any underspends as a ‘bonus’.15 Almost all US ACOs transfer risk of financial loss to Medicare.16

One form of ACO being introduced by STPs is the Multispecialty Community Provider (MCP) (‘medical homes’ and ‘multi-specialty group practices’ in the US). MCPs aim to cut costs by reducing hospital admissions, spun as prevention and care in the community. They will have a capitated (fixed) budget, non-comprehensive services, quality metrics, and “a gain/risk share for acute activity”. They can be “entities such as a community interest company, a limited liability company or a partnership”.17

In Yorkshire, Scarborough & Ryedale CCG have put a £1.3bn MCP contract up for tender.18 This was the biggest NHS tender but it has recently been trumped by the Manchester tender for a £6bn contract for a ‘local care organisation’, an ACO. Manchester GP practices are seeking partners to form an MCP in order to bid.19 An MCP is planned for Norwich.20 Like many larger MCPs, it will use ‘capitated’ or global payments, which are fixed payments to providers – a cap on care. FTI consulting advised West Essex CCG on capitated payment.21

Evidence for US ACOs is lacking:

– Cost savings:
– Promised savings for Medicare have not been realised; bonuses can exceed these22
– Consolidation of providers and insurers has driven up costs for the privately insured;
employers have tripled deductibles (the fixed part of cost of care to the claimant)23
– Quality:
– Payments to ACOs are linked to quality metrics in order to prevent denial of care. But quality measurement is “rudimentary, with quality indicators assessing only a small slice of care and providers routinely ‘game’ (and sometimes even falsify) quality metrics”24
– Value-based payment and Pay for Performance25:
– Systematic reviews of P for P have found a lack of high-quality evidence underpinning it.
– Value-based payment (NHSE’s Commissioning for Value): “empiric support for this approach is lacking, and it rests on dubious assumptions about measurement and motivation”.

Other characteristics of ACOs26:

– Continuity of GP care is ruptured
– “Mind-numbing electronic documentation” is imposed on doctors and nurses

ACOs are the US health-insurance industry’s solution to a uniquely US problem: they should have no place in our NHS. Since STPs are the vehicles for imposing them, STPs should be opposed in their entirety. The NHS must be reinstated as a fully public service, as this is the most equitable and cost-effective way to provide health care.



1. Michael Marmot, The Health Gap: The challenge of an unequal world, Bloomsbury, 2015 p. 73.

2. Stewart Player, The Truth about Sustainability and Transformation Plans, Socialist Health Association, 25 May 2017:
3. Bloomberg Businessweek:

4. FTI Consulting, Public Policy Advocacy:

5. NHS England, Five Year Forward View, October 2014:

6. NHS England, Next Steps on the Five Year Forward View, NHSE, March 2017:

7. Wendell Potter, Deadly Spin: An insurance company insider speaks out on how corporate PR is killing health care and deceiving Americans, Bloomsbury Press, 2010 p. 193

8. The Working Group on Single-Payer Program Design, Beyond the Affordable Care Act: A physicians’ proposal for single-payer health care reform, no date:

9. Wendell Potter, Deadly Spin

10. Jenny Gold, ‘Accountable Care Organisations, Explained’, Kaiser Health News, 14 September 2015:
Accountable Care Organizations, Explained

11. Bruce Japsen, UnitedHealth Group Launches National ACO, 1 November 2016:

12. Tamasin Cave, NHS: The foxes have control, 3 May 2015:

13. Susan Baseman and others, Payment and Delivery System Reform in Medicare: A primer on medical homes, accountable care organisations, and bundled payments, Kaiser Family Foundation, November 2016:

14. NHS England, Next Steps, ch.6

15. Stewart Player, ‘Accountable Care’ – The American import that’s the last thing England’s NHS needs, Our NHS, 1 March 2016:

16. Jordan Rau and Jenny Gold, Medicare Yet to Save Money through Heralded Medical Payment Model, Kaiser Health News, 14 September 2015:
Medicare Yet To Save Money Through Heralded Medical Payment Model

17. NHS England, New Care Models: The MCP emerging care model, July 2016 p. 6:

18. Scarborough and Ryedale CCG Procurement Information Notice, 2017:

19. Neil Roberts, ‘Practices Plan to Form MCP and Bid for £6bn Provider Contract’, GP Online, 11 April 2017:

20. Norwich Clinical Commissioning Group, NHS Norwich CCG Operational Plan 2017-18 and 2018-19, 1 November 2016, pp. 10-11:

21. FTI Consulting, UK Healthcare Solutions: Modelling transformational change in the NHS local health economy:–files/insights/articles/modelling-transformational-change-in-nhs-local-health-economy.pdf

22. Susan Baseman and others, Payment and Delivery System Reform in Medicare

23. Adam Gaffney and others, ‘Moving Forward from the Affordable Care Act to a Single- Payer System’, American Journal of Public Health, June 2016, Vol. 106, No. 6, pp. 987-988:

24. The Working Group on Single-Payer Program Design, Beyond the Affordable Care Act: A physicians’ proposal for single-payer health care reform

25. The Working Group on Single-Payer Program Design, Beyond the Affordable Care Act

26. Adam Gaffney and others, Moving Forward


ACOs and N & W STP June 2017 Hewitt ed