New care models: is it time to talk about organisational form?

In co-producing New care models: Governance between organisations with NHS Providers last year, we highlighted that the first and most important step in the development of any new care model is clarity of purpose. In particular, those developing them need clarity of purpose about the population health and care outcomes partners wish to achieve and the preferred care model.

Experience to date suggests that many local economies, whether vanguards or not, have made a lot of progress on this front.

So what happens once everyone has signed up to agreed outcomes and a care model? That is the stage at which partners need to work through the detail required to make the new care model happen.

For commissioners that means considering how they will commission the model – being clear about the services to be included within it, deciding whether the model will result in any service changes, determining the form of any contracts to be awarded and, finally, the procurement strategy for awarding those contracts.

For providers – NHS, local authority, voluntary sector and independent sector partners – that means looking at organisational form. By ‘organisational form’ we mean the way in which the various health and care bodies in a local economy organise themselves to deliver a new care model.

It is often said that there can be too much focus on organisational form and it is undoubtedly the case that the priority should be on identifying population health and care outcomes and the preferred care model, as noted above. Focus on leadership and culture is also essential.

But organisational form cannot be ignored and, in fact, can be useful for helping partners to develop their thinking about how they can deliver the new care model.

Understandably, there is often a lot of staff and public loyalty to maintaining existing organisational forms. But success will require organisations to think beyond their statutory and organisational borders. Working in partnership across traditional boundaries will be essential to deliver new care models fit for the twenty first century.

There is no ‘right answer’ to the question of which organisational form best suits a particular model – the much-quoted ‘form follows function’ really is true here. All of the organisational forms described here can be established by one of three legal models:

  • Contractual joint venture in which participating parties enter into one or more contracts with each other (for example lead/ sub-contractor arrangements, alliance contracts or management contracts)
  • Corporate joint venture in which participating parties create a new jointly-owned independent legal entity to carry out services on their behalf (for example GP federations and companies set up by foundation trusts and GPs)
  • Mergers or acquisitions in which one party acquires the assets and liabilities of one or more other parties (for example GP super practices and trust mergers).

Broadly speaking, contractual joint ventures involve less integration and are easier and quicker to deliver than corporate joint ventures and mergers. However, corporate joint ventures and mergers allow for more formal consolidation and independent brand identity.

What is an accountable care organisation in the NHS?

The concept of accountable care is relatively new to the NHS. A commonly held definition of accountable care is a model which brings together a variety of provider organisations to take responsibility for the cost and quality of care for a defined population within an agreed budget (for example a capitated budget).

An accountable care model can take many different organisational forms ranging from loose alliances or partnerships in which organisations retain their own autonomy but agree to collaborate, to fully integrated networks of hospitals and other providers. Whether the model is called an accountable care organisation, system or partnership is likely to depend on the extent of organisational integration involved.

Many new care models are ambitious to become accountable care models. However, accountable care models are likely to be complex and time-consuming to establish given they will be dependent on the award of capitated budgets under long term contracts. On that basis an accountable care model might be the end goal of a new care model rather than something that can be established immediately.

First and foremost, the high level of trust between the partner organisations allowed us to develop a really strong vision for what we wanted to achieve. Our aim was to be ambitious by creating an integrated care organisation that would integrate adult community, mental and acute health and social care services for the benefit of our population. Identifying a preferred organisational form – a prime contractor model – at a relatively early stage meant that we were able to move forward into the detailed discussions necessary to make the ICO a reality. A rigorous project management process has also been essential to the success of the programme..

Salford Royal NHS Foundation Trust, participant in Salford Together Primary and Acute Care System – PACS – Vanguard


The most common and likely, but by no means only, options for organisational form of new care models are:

  • Lead provider arrangements where a provider such as a GP federation or trust holds a contract under which it delivers some services itself and sub-contracts other services to its partners – many multispecialty community provider (MCP) and PACS models are adopting this model
  • Lead contractor arrangements where an organisation holds a contract under which it is responsible for overall service delivery as the ‘system integrator’ but does not deliver any services itself, instead sub-contracting to its partners – this may also be suitable for MCP or PACS models
  • A new joint venture company, which is owned by the partners. Holds a contract as lead provider or contractor and, possibly, subcontracts some services to the partners – this may be suitable for any model provided it is clear what the company’s role is and what the benefits are to setting it up
  • A management contract under which one provider agrees to participate in the management of another provider – many acute care collaborations are adopting this model
  • A section 75 partnership agreement under which NHS bodies and local authorities agree to collaborate to deliver integrated health and care services – models for integrated health and social care are using this option
  •  An alliance contracting arrangement under which partners retain their sovereignty as organisations and hold their own contracts but agree to collaborate with each other – this may be suitable for any model, in many cases as a first step on the road to a new care model.

What is a hospital chain in the NHS?

Like accountable care organisations, hospital chains are a model which other countries such as Germany and the US are familiar with and which have a track record of success.

The key feature of a hospital chain is centralised strategic leadership for a group of hospitals with each hospital operating with agreed decision-making responsibilities locally, standard operating procedures and centralised back office functions.

The unique features of the NHS mean that international hospital chain models will need adaption here, but there is no reason why they cannot be successfully implemented. Early consideration of developing chains in the NHS has highlighted that key issues to be addressed are:

  • differences between foundation trusts and NHS trusts in a chain;
  • merger control under competition law;
  • procurement law, especially for management contracts;
  • regulation of the hospitals in the chain; and
  • governance and accountability.


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