Run ragged

Planning the final assault

The introduction of ‘accountable care organisations’ could be the beginning of the end for the NHS, writes James Linney

There is a new buzzword in the national health service: ‘ACOs’. Accountable care organisations provide a ‘new and exciting vision’ for how the NHS is organised, we are told. Now, you might be thinking that the last thing the NHS needs is another reorganisation, but let us not judge things too hastily - this one might not be as disastrous as the last few.

For a start, ‘accountable care’ sounds promising. Maybe Jeremy Hunt has repented and finally decided to introduce some democracy into the NHS? Well, I am afraid I will now have to bring you back to earth: he has not. In this in article I am going to look in detail at the genesis of ACOs and how they could represent the biggest leap yet towards privatisation.

Before discussing yet another game-changing reform, it is worth having a quick look back over what the past seven years of Tory rule has meant for the NHS. It infamously began with a pledge from David Cameron that the Conservatives would “stop top-down reorganisation”. Even as Cameron spoke these words, we now know that the then health secretary, Andrew Lansley, was concocting a plan for the largest top-down reform the health service has ever seen. One that David Nicholson, chief executive of the NHS at that time, described as “a reorganisation so big you can see it from outer space”. So Lansley’s 2012 NHS Health and Social Care Act (HSCA) was rushed through parliament and we were told that it would reduce NHS bureaucracy and give control back to doctors.

However, like text messages, it is sometimes hard to tell when the authors of such acts are being sarcastic. So, some people were surprised when the HSCA created new, previously unimagined layers of bureaucratic organisations, whose roles were ill-defined and relationships beyond understanding. We now had NHS England, Monitor, NHS Improvement, the Care Quality Commission, NHS Digital, Healthwatch ... It was a bit like Richard P Feynman’s claim about quantum mechanics: if you think you understand clinical commissioning, then you haven’t understood clinical commissioning.

The whole point was to whip up a storm of confusion and when the dust settled the Trojan horse within the HSCA was revealed: hidden in the reform was the severing of the department of health’s legal duty to fund a comprehensive NHS. The HSCA also created clinical commissioning groups (CCGs). These, we were promised, would be the vehicle through which GPs would finally have control of the NHS budget and could commission (buy) services best suited to their patients.

There were two small caveats though: they would have to impose £26 billion of ‘efficiency savings’ and would be legally obliged to offer the services out to tender to “any qualified provider”. Meaning that, if a private company could undercut the NHS provider, it would have to be given the contract.

That brings us to ACOs. Significantly they are being championed by Simon Stephens, head of NHS England, and are being imported directly from America - two facts that should immediately set alarm bells ringing. This is the same Simon Stephens who was previously senior vice-president of the mega-firm, United Health - the largest private health insurer in the US. It was under Stephens’ leadership that United Health settled out of court, after being accused of overcharging millions of Americans in 2009. Helpfully (or not), in August NHS England (NHSE) published a ‘supporting document’, where its vision for this exciting new ACO initiative was introduced.1

Yet if you look more closely at this document (and I recommend you do not!) you will find that, the more you read, the less you understand. As a general practitioner, I have to attend regular CCG meetings and consider myself relatively well versed in the latest health-managerial speak, yet this document made my head hurt. Maybe one day we will discover a Rosetta Stone that will help us understand the ACO plan, but until then here is my attempt at decoding it.

Middle men

The claim is that health and social care provision will be integrated, supposedly allowing for more regional control, whilst improving efficiency. We are told: “… an ACO is where the commissioners in that area have a contract with a single organisation for the great majority of health and care services and for population.” Basically, NHSE will be giving authority to a ‘middle man’, whom the CCGs will pay to organise all care for a certain population area. Significantly there exists no statutory authority for NHSE to do this and, even more importantly, we are not told who these ‘middle men’ will be. But - as co-author of the NHS Reinstatement Bill, Allyson Pollock, points out - they open the door to private health and insurance companies:

ACOs will be non-NHS bodies designated by NHSE, even though there is no statutory provision conferring such a function on NHSE. Behind the ACO it appears that there will be a network of companies - such as large providers, subcontractors, insurance companies and property companies - but the consultation is silent on ACO membership or their contractual relations.2

These contracts will apparently be held for as long as 10-15 years and built within the contract will be a profit incentive and a limited budget commitment - a combination that can only lead to further healthcare rationing.

We can get some idea of how ACOs work in practice by looking to their birth place: America. In the US the health system has always been far more fragmented, complex and costly than in Britain. In 2014 the total spending in the US was 16% of GDP compared to the UK’s 9%.3 There ACOs evolved from the notorious ‘health maintenance organizations’ (HMOs), which are run by insurance groups and responsible for providing care for a given population. They are known for their ruthless, routine denial of access to treatment - screening out the sick, paying huge sums to their chief executives and undertaking systemic fraud.

Initially ACOs were supposed to be a way of making Obamacare more efficient and less costly and most ACO contracts were held by Medicare and Medicaid state agencies. However, increasingly they are run by insurance companies such as Simon Stephens’ United Health. ACOs use market-based mechanisms to lower costs, whilst committing to a capitated budget - the carrot being that they are allowed to keep any savings as profit. Even as vehicles for cost reduction there is very little evidence in support of ACOs. According to the Kaiser Health Foundation, none of the projected $320 million savings were achieved between 2011 and 2014, and in fact the ACO programme actually cost Medicare an additional $3 million.4

So we can see the true nature of the ACO plan. Why import an initiative from a less efficient health system without any sound evidence to support it? The answer is that it is a stepping stone towards a healthcare system that both Simon Stephens and his successor, Jeremy Hunt, are ideologically committed to: one where the NHS is exposed to the full, destructive force of the market.

Eight areas in the UK have already been chosen to become proto-ACOs and despite any legal authority the fast-tracking of their implementation is going ahead.5 This has led Allyson Pollock and other leading health professionals to start legal proceedings against Jeremy Hunt, in an attempt to block ACOs.6

For many NHS campaigners, ACOs represent the final assault of the Tories’ ‘privatise the NHS’ offensive. Given the weak position of the government and the surge of support for Corbyn’s Labour, perhaps Jeremy Hunt is planning a final showdown before the next general election. This is unlikely though: much more likely is the continuation of Tories’ ‘death by a thousand paper cuts’ strategy. Hence the introduction of ACOs without any public consultation, cloaked in a wave of impenetrable health-managerial language. The NHS will be fragmented into regions, where health provision is in the hands of non-NHS, profit-driven bodies which have been granted 10-15-year contracts. This simultaneously avoids an all-out public attack on the NHS and allows Jeremy Hunt the possibility of securing his egoistic legacy.

Either way, in the short term, only a Labour government seems to offer any respite in the all-out assault on the NHS. Yet despite Corbyn’s commitment to renationalisation, Labour’s 2017 manifesto was at best weak when it came to healthcare. Pledges such as “we will introduce a new legal duty on the secretary of state and on NHS England to ensure that excess private profits are not made out of the NHS at the expense of patient care”, and “[we will] insist on value-for-money agreements with pharmaceutical companies”, could have easily appeared in a New Labour manifesto.

The left’s role, therefore, must be both to oppose further, Tory-sponsored, NHS erosion and to demand a more radical Labour position. For a start by insisting that there is no such thing as “value-for-money agreements” with pharmaceutical companies - all profits gained from the NHS are made at the expense of patients.


1. www.england.nhs.uk/wp-content/uploads/2016/12/1693_DraftMCP-1a_A.pdf.

2. www.bmj.com/content/359/bmj.j5349.full.

3. https://visual.ons.gov.uk/how-does-uk-healthcare-spending-compare-internationally.

4. https://khn.org/news/medicare-yet-to-save-money-through-heralded-medical-payment-model.

5. www.england.nhs.uk/2017/06/nhs-moves-to-end-fractured-care-system.

6. www.nhsbillnow.org/new-legal-action-against-jeremy-hunt-to-stop-accountable-care-organisations.