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Briefing

Integrated health organisations (IHOs): what can the NHS learn from UK and international evidence?

Published November 2026
Time to read clock icon About 25 mins
Authors
Hospital patient discussing treatment with doctor

Key points

  • Better integration of care is a longstanding policy aim in England. The government’s 10-Year Health Plan set out ambitions for new integrated health organisations (IHOs) to take on responsibility for whole health budgets for local populations. IHOs represent the latest attempt to coordinate services and incentivise more preventative care. Other countries have pursued similar approaches.
  • We reviewed relevant evidence and interviewed experts from several comparable countries to understand more about the impact and implementation of similar models, to see what we could learn for NHS policy on IHOs. We also interviewed NHS trust leaders to understand their views on the emerging policy direction in England. 
  • Overall, evidence supporting the effectiveness of IHO-style models internationally is limited and mixed. The most consistent impact we found in the literature was for modest cost savings in accountable care organisations (ACOs) in the US, driven by reductions in hospital use. But fundamental differences in health system design and context limit the transferability of this evidence to the English context. 
  • Understanding how other health systems are redesigning services for patients and the factors shaping their performance likely offers more fertile ground for international learning. Many of the more successful international models tended to invest in proactive care management, care coordination across different settings, data analytics and other approaches to plan and manage services across the population, as well as targeted interventions for high-risk patients.
  • IHOs will ultimately rely on local partners changing the way care is delivered. Introducing new organisations, contracts, budgets or governance arrangements may help, but broader factors including changes in culture, leadership, management and relationships are just as important. Developing the skills and capabilities to improve services is critical, including digital and data infrastructure. Strong involvement of primary care is needed to make these models work.
  • There are outstanding questions about how new IHO models will work in practice in the NHS. These include how contracts and budgets are constructed, the scope of services and population covered, how accountabilities will work, and plans for implementation. Long-term commitment and rigorous testing and evaluation will be needed to support ongoing policy development. 
  • The development of IHOs raises further questions for other parts of the NHS, including about the future of integrated care boards (ICBs). Providing clarity and stability for the NHS should be a priority for government, given the drag that ongoing organisational change and uncertainty has on the system.
 

Introduction

Better integration of health and social care services is a long-standing policy goal in England and other countries. The idea is that more coordinated care is needed to meet the needs of an ageing population and rising numbers of people living with multiple long-term conditions. Care is too often fragmented and focused on treating people in hospitals, with missed opportunities to intervene early and prevent disease. These challenges are not unique to the NHS, with countries around the world facing similar pressures and implementing a mix of approaches that aim to incentivise more coordinated care.

In England, successive national pilot programmes have been designed by policymakers alongside local initiatives that aim to better join up care for patients. Yet these diverse efforts repeatedly fall short of ambitions. Pilots to integrate health and social care services in the 2010s, for example, made only limited headway in reducing unplanned hospital admissions and struggled to move from pilot phase to wider adoption. 

Labour’s 10-Year Health Plan, published in 2025, laid out the latest vision for the closer integration of services within the NHS. The plan proposed that top-performing NHS trusts evolve into integrated health organisations (IHOs), able to hold the whole health budget for a defined local population. Despite the name, policymakers have since confirmed that IHOs will take the form of a new contract and that newly designated advanced foundation trusts (AFTs) will be among the first to take them on. Policymakers have high expectations for IHOs: the hope is that they will ‘support integration, shift resources from hospital to community, focus on population health and tackle inequalities’. 

Detail on how these new contracts will work in practice is limited. Two ‘first wave’ IHO candidate trusts have been approved by NHS England, with contracts expected to launch in 2027. Over time, the aim is for IHOs to become ‘the norm’ across the NHS. Similar models have been developed internationally – most notably accountable care organisations (ACOs) in the US. But evidence on the impact of these approaches is limited and mixed, and existing overviews of these models and what they might mean for the NHS in England are now several years old.

This briefing reviews a mix of evidence to inform the development of IHOs in the NHS – synthesising the latest available evidence on similar models in the UK and internationally, alongside interviews with senior leaders on the current policy in England. We first give an overview of the policy context, then set out what we know about the implementation and impact of these models in the UK and internationally, before identifying some of the key factors shaping implementation. Finally, we draw the strands of analysis together to identify key questions and implications for future policy on IHOs.

 

Methods and approach

Integration of health and care services can take varied forms, and the literature on these approaches is vast (see Box 2). While other internationally recognised examples of integrated care may offer valuable lessons on service redesign for the NHS, here we focus on models that most closely resemble the proposed IHO approach, covering ‘vertically integrated’ models where one organisation or entity takes responsibility for managing or providing services at different stages of the patient care pathway, via organisational or financial integration. For example, this might be a single provider holding a contract to deliver care for a defined population covering hospital and primary care services. 

We used a mixed-methods, exploratory design (see Appendix 1) to explore: 

  • what the evidence suggests about the impact and implementation of similar models internationally
  • experiences of adoption and insights into enablers and barriers to implementing IHO-type models
  • early experiences and insights from NHS trust leaders thinking about IHO development
  • what these insights mean for the NHS in the current context, identifying key policy questions and wider implications as IHO policy develops.

1. Rapid evidence review 

A rapid review of international literature aimed to identify key features, evidence of impact and factors shaping implementation of similar models of vertical integration in other countries. This included systematic searches across major databases and grey literature, ultimately including 46 studies for in-depth review. Most studies focused on literature from the US. 

2. International and NHS experiences in more depth 

Desk-based research of policy documents and relevant literature and a series of scoping interviews explored experiences of developing and implementing similar integrated models. Interviews with international experts (n=8) and UK stakeholders (n=10) focused on lessons from established initiatives and previous attempts to strengthen coordination across services across care settings (including interviews with NHS trust leaders that examined early experiences of and emerging thinking on IHOs). Interview participants were recruited pragmatically based on expertise and role. 

3. Analysis

Interview and desk-based research findings were synthesised using a common thematic framework (informed by the SELFIE framework). This was developed following an initial review of a sample of transcripts and based on themes identified in the data and key domains in our interview guide. Qualitative research software was used for the analysis. Key messages, policy questions and implications were refined through a roundtable with a wider group of leaders (including from ICBs, primary care, academia, and national policy organisations) to validate and contextualise results. 

Limitations

Our findings reflect a high-level synthesis of expert opinion and key evidence rather than a systematic analysis across contexts. Insights may also be influenced by survivor bias, whereby a small number of well-established and apparently successful models are disproportionately represented in the evidence base despite having taken many years to develop and rarely being replicated at scale. 

The review was complicated by the lack of agreement on what integrated care actually involves and inconsistent definitions and terminology across the literature, which made it difficult to compare models. We include evidence from both organisationally and financially integrated case studies, though literature on financial – or contractual – models largely comes from ACOs in the US. The focus on organisational or financial forms of vertical integration and the time limit for inclusion of 2017 may also mean we missed some relevant evidence or examples.

Participants included in the qualitative analysis were purposively recruited primarily through professional networks, representing organisations at the forefront of integration efforts, and – in terms of the UK interviews – were mostly NHS trust leaders. This potentially limits the diversity of perspectives and wider generalisability of the findings.

Integrated care is a broad term that covers a spectrum of approaches that seek to improve coordination, quality and outcomes by connecting services, professionals, organisations and systems in different ways: 

  • Organisational integration involves formally bringing organisations together through mergers or structural change and sometimes refers to efforts to bring separate organisations together virtually though networks or contracts.
  • Functional integration focuses on support and back-office functions rather than front-line care (eg shared digital infrastructure and patient records, administrative functions). 
  • Service integration refers to the integration of different clinical services, for example by organising care through multidisciplinary teams or shared pathways.
  • Clinical integration concerns the coordination of care through shared protocols, care plans, guidelines, pathways and professional practices. 
  • Normative integration relies on shared values and commitment that enable trust and collaboration. 
  • Systemic integration refers to there being coherent rules and policies at all organisational levels. 
  • Integration can be vertical – involving organisations operating at different stages of the care pathway (such as hospitals, primary care and community services) – or horizontal, involving two or more organisations or services delivering care at a similar level (eg the formation of primary care networks or hospital group models in England). 

Given IHOs will use a capitated contract for multiple local services held by a single lead provider, in this briefing we focus on examples of vertical integration through organisations or contracts to identify models most relevant to current proposals in England. 

Sources: Curry and Ham 2010, Lewis et al 2010, Matos et al 2025, Valentijn et al 2013. 

 

Overview of the policy context for better care integration

Numerous national policies promoting collaboration between health and care services have been introduced in England over the past three decades. The early 2000s, for example, saw care trusts established to pool health and social care funding and Section 75 partnership agreements introduced to expand budget pooling between the NHS and local authorities. From 2008, a series of national programmes sought to improve coordination between services through a range of locally piloted models. The most recent of these – the Five Year Forward View (2014) and ‘new care models’ programme that followed – set out to test and implement a menu of approaches to support more widespread integrated working and ‘dissolve’ traditional divides between primary care, community services and hospitals. 

Drawing inspiration from the US, Spain and Singapore, one of the models trialled, the primary and acute care system (PACS), aimed to integrate hospital and primary care provision and – at its most radical – transfer accountability for all health needs of a list of patients under a capitated budget. Pilot sites were set up and funded around the country, accompanied by local evaluation. The idea was for these models of care to be tested and then replicated elsewhere but, in practice, the initiative lost momentum when initial funding came to an end and only one of the models was implemented more widely. The focus of these initiatives also changed over time, often from a broader initial set of aims encompassing patient experience or clinical quality to a much narrower focus on curbing hospital utilisation and costs.  

Alongside new ways of working, new contractual forms were mooted to support these approaches. A draft contract was published that would enable a lead provider to be handed responsibility for managing and delivering a wide range of health and care services for a defined population under one long-term agreement. NHS providers and commissioners were reportedly supportive of the contract but responses from GPs were more mixed. The consultation surfaced concerns about privatisation, blurred lines of responsibility, concentrated financial risk and practical complexity. There was also scepticism that contracts alone could deliver effective integration of services. 

Progress with new contracts and aims to introduce ‘accountable care’-style models ultimately faltered, stalled by debate about the potential private-sector involvement and the complexity of the procurement and contracting processes involved. National policy moved on to focus on broader partnership working at a planning and system level: integrated care systems (ICSs), born out of sustainability and transformation partnerships, were rolled out across the country, culminating in the Health and Care Act 2022 which officially organised England into 42 area-based ICSs. These bodies have since been subject to another set of changes under the new Labour government, including deep cuts to their budgets, mergers and ‘clustering’ across larger geographical areas, a redefining of their role to focus on ‘strategic commissioning’, and other proposed changes to their governance.   

Although not driven by explicit national policy changes, since around 2015 there have also been a growing number of local examples of vertical integration of organisations in the NHS, with acute trusts taking on responsibility for running general practices. Largely implemented as a local solution to help support and maintain primary care when local practices are at risk of closing, vertical integration of this form is still modest in terms of its adoption across the NHS.

‘It's a bit like that film where everybody's forgotten about The Beatles… I'm kind of saying, you know, can I just, by the way, we did try this once before, there's nothing new in this.’

                                                                                                                                  ICB senior leader

IHOs and the 10-Year Health Plan

More than a decade after the forward view, the 10-Year Health Plan represents the latest attempt to encourage more coordinated care, a greater focus on prevention and more care delivered in community settings. Neighbourhood health services sit at the heart of this vision, with plans for multidisciplinary teams working at local level, new neighbourhood health centres acting as local ‘one-stop shops’ for health, care and wider community support, and a greater focus on proactive and preventative care to keep people well and reduce avoidable hospital use. The plan proposed new IHOs (see Box 3), intended to provide a mechanism for coordinating care and aligning resources across defined populations, improving population health and supporting the plan’s ambition to deliver integrated, community-based care at scale.

What are IHOs? 

IHOs are described as ‘a new capitated contractual form’ through which a single provider holds a contract and takes on responsibility for the health outcomes, service planning and allocation of resources for health services for a defined local population. National policy states that IHOs will ‘support integration, shift resources from hospital to community, focus on population health and tackle inequalities’.

Governance and organisational model

IHOs will be commissioned and overseen by integrated care boards (ICBs) in their reshaped role as strategic commissioners. Eligibility to hold an IHO contract is currently restricted to those designated ‘high performing’ via the new advanced foundation trust (AFT) process led by the Department of Health and Social Care and NHS England. Guidance emphasises that while IHO contracts will only ever be held by NHS organisations, there will be routes developed to enable ‘mature neighbourhood providers’ to lead an IHO (eg by partnering with or working within an NHS organisation). 

How will they operate?

IHO contract holders are expected to coordinate care across acute, community and mental health services through subcontracting and partnership arrangements. The model is being developed alongside new contracts for neighbourhood health providers and IHO populations are expected to be built from locally agreed neighbourhood footprints to align populations from neighbourhood to IHO level. General practice will continue to operate under existing nationally determined contracts, with IHOs responsible for managing these contracts locally. NHS England has indicated that IHOs will be allocated a capitated budget for a defined population, but there is currently limited detail on how funding allocations or payment mechanisms will operate in practice. IHOs will be eligible to join a national Strategic Commissioning Development programme (for example, to access support to develop commissioning skills). 

Implementation

IHOs remain at an early stage of implementation. Two trusts were recently approved as the first to be eligible to hold contracts, expected to begin in 2027. NHS England will work with this first wave of IHO contract holders to test the model and develop a plan for wider rollout, including to areas where it could address ‘entrenched’ system challenges. ICBs have been asked to begin implementing some outcome-based contracts within 3 years. The long-term ambition is for IHO contracts to become ‘the norm’.

Sources: Department of Health and Social Care 2025, NHS England 2026a and 2026b, Collins 2026.

 

What we learnt from other countries

Similar models to the proposed IHO approach have been developed internationally over the past two decades in response to common challenges of fragmentation, rising demand, population ageing and constrained resources – mirroring the factors cited by NHS trust leaders we interviewed as reasons for pursuing an IHO model. Table 1 provides a summary of relevant international examples considered in this research – more detail on these can be found in Appendix 2.

While several of the international models share a focus on integrating care and improving population health outcomes, they differ substantially in their governance arrangements, payment mechanisms, population coverage and relationships between providers. There is no single dominant model, with choices about design and implementation shaped by local and national context, policy priorities and system architecture. 

In the US, for example, accountable care organisations (ACOs) aim to align financial incentives and provider accountability around the needs of a defined population, with providers most commonly remain organisationally separate but linked through shared savings* or capitated contracts with varying levels of financial risk. In contrast, countries such as Portugal and parts of Spain have pursued more structural approaches, bringing responsibility for primary, community and hospital services together as single organisations with unified governance, leadership and budgets. 

Leadership and governance models vary both between and within countries, as has the pace and scale of implementation. Some systems have evolved these models gradually over many years through local experimentation and organic growth (eg Germany’s Gesundes Kinzigtal) while others – most notably Portugal – have moved towards rapid, nationally driven rollout following earlier regional pilots. Population coverage ranges from relatively small, locally defined examples covering tens or hundreds of thousands of people (in parts of Spain and Germany, for example) to system-wide programmes covering millions (such as in state-wide accountable care programmes in Maryland and Vermont).

International examples have commonly implemented some form of financial reform alongside other system changes in an effort to better align payment models with policy goals. This might involve, for example, moving from a reliance on fee-for-service and similar payment mechanisms that primarily incentivise higher levels of activity to ‘global’ budgets with new quality incentives covering multiple providers in an effort to promote more coordinated and preventative care across different services. 

Other countries have considered but ultimately not pursued IHO-type models. New Zealand, for example, has explored more formal organisational models of integration but has tended instead towards collaborative, network-based approaches. This reflects a broader lack of support for approaches that introduce more competition to the health service, complexities associated with implementing them and questions about whether the desired gains would be replicable in a small country with a different model of delivering services (to, say, the US).  

*Shared savings arrangements mean that participating providers agree to cooperate and collaborate with the aim of achieving joint savings – which are then distributed to providers – for the care provided to patients.

Table 1: International integrated care models – comparative summary

Country and modelGenesis/policy contextKey featuresImpact

US: accountable care organisations (ACOs)

Developed in response to rising costs, fragmented care and concerns about quality within a predominantly fee-for-service system.

Networks of providers linked through shared savings and risk-based contracts. Organisations usually remain legally separate but are incentivised to coordinate care and improve outcomes.

Small reductions in costs, largely through lower hospital use; quality generally maintained or modestly improved; limited evidence of population health gains.

Germany: Gesundes Kinzigtal (GK)

Created to improve coordination across fragmented ambulatory and hospital sectors and support management of long-term conditions.

Population-based integrated care model using shared savings agreements; coordinated by a dedicated regional integrator rather than organisational merger.

Mixed evidence; some benefits for individuals, but no consistent improvements in population outcomes or quality.

Spain: Basque integrated care organisations (OSIs) and Alzira

Introduced to address population ageing, multimorbidity and organisational fragmentation in a decentralised national health service system.

Organizaciones sanitarias integradas (OSIs) integrate primary and hospital care under a single organisation; Alzira used a capitated public–private partnership model integrating primary and secondary care.

Some evidence of improved coordination and reduced hospital activity, but overall findings are mixed and robust evaluations remain limited.

Portugal: local health units (LHUs)

Established to tackle fragmentation, chronic disease pressures, workforce shortages and access challenges. Expanded nationally from 2024.

Fully integrated organisations bringing together primary, community and hospital services under single governance and budget arrangements.

Early evidence suggests improvements in coordination, access and some quality measures; no clear evidence yet of consistent system-wide cost or outcome benefits.

What do we know about the potential impact of these models?

The rapid evidence review conducted as part of this work was dominated by literature on US ACO models (see Appendix 3). Overall, the evidence on the impact of vertically integrated approaches is modest, heterogeneous and context dependent. 

The most consistent impact was for modest cost savings in ACOs, driven by reductions in hospital use (Lowell 2024) – an outcome that does not appear to harm quality of care (Trombley et al 2022, McWilliams et al 2020, Kaufman et al 2019, Wilson et al 2020, Holm et al 2024, Nyweide 2026). Physician-led ACOs and those with a larger proportion of primary care providers achieve greater savings than hospital-led models for reasons that may also apply in England (McWilliams et al 2018, McWilliams et al 2020). For example, hospitals may face conflicting incentives to reduce activity given their dominant payment models and higher fixed costs (which are incurred regardless of service volume). Hospitals may also have less direct control over the types of services provided to their patients. ACOs with higher baseline levels of spending also achieved greater savings than comparison groups (Congressional Budget Office 2024, McWilliams et al 2016). Overall, these effects were generally small, and gross savings did not always translate into net savings once shared savings payments and programme incentives were taken into account.

There is some evidence of improvements on measures such as preventative care and chronic disease management. But there is little and mixed evidence on patient experience, population health outcomes or health inequalities – cited as core goals of the IHO approach. The transferability of the evidence that does exist is constrained by fundamental differences in health system design and context. The structure, values and cultures of the US and English health systems, for example, vary widely and financial incentives exert a stronger influence in shaping organisational and clinician behaviour in a market-based system like the US where ACOs stand to win or lose financially based on their performance. The voluntary nature of ACO programmes also means that some of the effect may reflect systematic differences between those participating and not participating (eg with those most likely to achieve savings more likely to join ACOs in the first place) (Ouayogodé et al 2021).

More useful insights for developing IHO-style models in England may be found by focusing on how leaders and staff involved in these models are going about redesigning services for patients. Across countries, the evidence (Kaufman et al 2019, Lowell 2024, Goiana-da-Silva et al 2024, Schubert et al 2021) on approaches used in more successful models suggests they tended to invest in proactive care management, care coordination, data analytics and other approaches to plan and manage care across the population, and targeted interventions for high-risk patients.

 

Key factors that shape implementation are common across settings

Drawing on UK and international experiences, we explored factors shaping the implementation of IHO-style approaches. Despite differences in health systems and model design, many themes were consistent across settings. Several factors interrelate. 

Effective relationships and high levels of trust 

‘Square one and nothing happens without it.’

                                                                                                                                  NHS trust leader

Building positive and trusting relationships between local leaders was seen as foundational to making more integrated models of care work over the long term. This aligns with wider literature on organisational collaboration that describes how historical relationships between agencies – present or absent, good or bad – shape the way local partnerships develop and function. As one NHS trust leader emphasised: ‘You don’t create change by contracts, you create change by the behaviours and the models and that’s much more complex. So it’s very easy to say that there’s an IHO contract – the hard bit is actually doing the right thing, getting the right partners aligned and moving around that kind of spherical integration.’ 

Relationships between primary and secondary care were seen to be particularly important – and in some cases needed strengthening. ‘Patch protection’, mistrust or poor historical relationships were highlighted as potential barriers to progress. These tensions were not confined to the NHS. One interviewee from Portugal described tense relationships in some areas at the start of their reform process with large teaching hospitals viewing the approach as ‘a huge threat’ and primary care professionals concerned about the potential for reduced autonomy or a hospital takeover.

Factors seen to help local relationships to flourish include keeping geographical footprints small to facilitate a common culture, trust and a ‘mutual understanding of local issues’, prioritising in-person time to ‘understand what makes each other tick and the pressures and challenges that each organisation is facing’, and having an aligned and clear vision across partners. On the latter, one NHS interviewee reflected on the breakdown of a previous integration initiative and the way differing stakeholder views on what it was designed to do had played into this. 

Skills and capabilities

‘Demands new competencies of the management.’

                                                                                                                                  NHS trust leader

Skills and capabilities to develop and deliver more integrated services were seen as critical – and often in short supply. These include skills in assessing population health needs, planning and redesigning services to better address them, and testing and evaluating new ways of delivering care.

NHS leaders pointed to existing skills that they thought needed strengthening – mostly in relation to effective commissioning – and stressed the importance of having deep understanding of local services to identify opportunities for change or innovation. Leaders were concerned that recent changes to ICBs had resulted in the loss of commissioning capacity and capability that may need to be recreated. Skills thought to be in short supply included actuarial, health economics and analytical capabilities to support planning, guide improvement, and enable performance monitoring and evaluation.

Leaders also cited the importance of management capacity to help redesign services, alongside generalist clinicians to lead the change process. The need for a shift in mindset and leadership approach was raised by both NHS and international interviewees. Instead of focusing on service delivery, episodic treatments or traditional institutional boundaries, this model requires provider leaders to adopt more of a population health outlook focused on prevention, complexity and bringing different organisations and their cultures together. ICB leaders interviewed in 2025 raised similar concerns about hospitals’ ability to shift their focus from treating patients to improving health for populations.

Data and digital

‘Digital is mandatory.’

                                                                                                             Senior health leader, Portugal

Several NHS interviewees reflected on the improved availability of data and technological capability compared with earlier eras of integration efforts. Poor interoperability – the inability to share and use patient information from different parts of a local health care system – was identified as the main factor standing in the way of capitalising on this in support of more integrated approaches (alongside the need to take a more strategic approach to using population health data – see above). 

Both NHS and international interviewees underlined the importance of joined up patient records between primary and secondary care providers to support more coordinated planning and care delivery. An interviewee from Portugal also emphasised the role of a single digital system in making partner organisations feel like ‘one institution’ with ‘one view and one vision’. In the US, AI is playing a growing role within ACOs in providing support for clinical decision making, data analytics and other approaches to plan and manage services across the population and different care settings. 

Leaders highlighted the time and investment needed to develop integrated records, with additional work to develop digital systems in non-acute settings, and the relationships and trust required to enable greater data sharing between partners. One leader saw a role for national bodies in ‘crack[ing]’ information governance to enable joint datasets with appropriate levels of clinical governance. 

Primary and community care

‘You can’t deliver an IHO unless you’ve got well-functioning neighbourhoods.’

                                                                                                                                   NHS trust leader

With current plans focused on NHS trusts holding IHO contracts, trust leaders emphasised that the model would be ‘dead in the water’ if perceived as an acute trust takeover and stressed the importance of acknowledging and dealing sensitively with perceived power imbalances. Language was seen as key, with one trust leader using the term ‘spherical integration’ rather than ‘vertical’ in an effort to convey a more distributed level of power. IHO contract holders were framed as potential ‘convenors’ of local partners contributing on an equal footing to take collective accountability, rather than being ‘in charge’ and making decisions about other services. 

New neighbourhood contracts and at-scale primary care providers that could connect with broader community services and ‘dock into’ IHOs were also seen as important for supporting areas to work in an ‘IHO way’, while providing a potential route to securing a stronger and more representative primary care voice around the table.

Funding, contracts and financial incentives

‘Tariffs and financial flows need to catch up with the policy proposals.’

                                                                                                                                   NHS trust leader

Literature on integrated care rightly points to the role of leadership, relationships, values, and other social and cultural factors in shaping success of local initiatives. But the technical details matter too – and insights from the US point to several lessons on designing contracts and funding flows. 

One is the importance of transparently and accurately constructing baseline budgets for ACOs or similar initiatives. In the US, benchmark spending levels are used to determine shared savings (and losses). The process for setting these benchmarks is complex and varies between ACO models. ACOs with initial baseline spending higher than the regional average have been found to generate larger savings, potentially because these providers were providing more low-value care that was easier to reduce when they joined the programme. Initial allocations therefore need to avoid penalising already efficient or underfunded systems that could exacerbate existing inequalities between areas over time, and should not lock in existing patterns of service provision in ways that stifle innovation.  

Another consideration is how to align incentives and payment models to overall policy goals. The literature suggests that measuring and incentivising quality of care – not just reductions in spending – is particularly important. Larger, more broadly defined payments spanning a range of organisations and services may provide more incentive and room for providers to reduce costs, but this could be done in ways that negatively affect quality of care – for instance, by reducing access for some groups. In the US, ACOs have to meet defined quality standards to receive any share of financial savings, while other commercial models (such as Blue Cross Blue Shield of Massachusetts) have used financial incentives to try and promote equity goals in these contracts. Similarly, in the Basque region of Spain, a percentage of funding is linked to achieving quality and integration goals. 

Finally, upfront investment to support implementation of new models of care (eg to develop digital systems or build capacity in key services) is likely needed. This is because delivering more integrated services will depend on new ways of working, which may take time to become established and generate results.

Integrated care often ‘costs before it pays’. In the US, a lack of resources for providers to participate in ACO models has been identified as a limiting factor, and previous insights from those developing novel contractual approaches in the NHS suggest this process is particularly resource intensive. However, the literature is thin on the costs or investment required to set up and embed integrated care models, and one interviewee reflected that the managerial and clinical time involved in implementation often go uncosted.

Stability

‘We can’t change our course every time the government changes.’

                                                                                                               Primary care leader, Portugal

The need for stability and a long-term approach was cited by UK and international interviewees. This applied to three areas: ongoing political support and policy continuity – given the time it takes to adopt the model and potentially see any results; long-term contracts and funding cycles; and the need for stability within organisations taking on the contract. As one NHS acute trust leader noted: ‘You’ve got to do the day job, otherwise this is really difficult. So if you’re a trust that is in meltdown, where you’ve got patients stacking up in corridors, where the finances are going down the pan, where you’re not running safe services, don’t even start thinking about being an IHO […] it’s a distraction.’

 

Implications for IHO policy and implementation in England

Better integration of care is a longstanding policy goal in England and other countries. In a renewed effort to overcome fragmentation of services and incentivise more preventative care, UK policymakers recently announced plans to introduce new integrated health organisation (IHO) contracts that will see high-performing NHS trusts take on responsibility for the whole health budget for a local population. Other countries – including the US, Portugal, Spain and Germany – have pursued similar approaches. We undertook a targeted review of the evidence and interviewed experts from several countries to understand more about the impact and implementation of these kinds of approaches. We also interviewed NHS trust leaders to understand their views on the emerging policy direction in England. 

Overall, there is limited evidence on the impact of similar IHO-type approaches, the bulk of the literature stemming from the US where differences in context between the two health care systems limits the transferability of this evidence to the NHS. What is clear from international examples is that developing new models is complex and adoption takes time. There is no single solution or approach and context is critical; while similar in overall drivers for change or policy ambitions, the design and implementation of these models varies considerably both across and within countries. 

Despite this variation in design, a common thread is that most of these approaches are ultimately trying to change service delivery and better coordinate care, employing a similar set of strategies to do so. These include, for example, care coordination across settings, targeted support for high-risk groups, and analytical approaches to plan care differently across the population. A set of familiar factors shape implementation and performance, including local relationships, skills and leadership capabilities, shared data infrastructure, and more. These are not all currently in place consistently across the NHS.

Policy on IHOs in England is still at an early stage. Insights gathered through our work point to six implications for those involved in the development of IHOs. 

Six implications for IHO development

1. Focus should be on how care will change, not structures 

Past NHS experience and broader literature highlight the limits of structural reform alone.  Portuguese health institutions are formally integrated, but the development of integrated services and closer working between hospital specialists and GPs has proven more complex and challenging to deliver. State-level efforts to integrate services and control costs in the US have demonstrated that varied approaches, with and without financial integration, can deliver similar results. In the NHS, new approaches to overcome fragmented payment systems and generate shared accountability between providers could help remove some key barriers to more integrated care, but introducing new contracts, budgets or governance arrangements will not be sufficient on their own. 

Successful integration fundamentally depends on staff working together to deliver care differently. Instead of focusing on contracts or organisational forms, understanding how other health systems are redesigning services for patients and the factors shaping their performance may offer more fertile ground for learning from international experience. Interviews with NHS trust leaders suggest they are already thinking along similar lines, with interviewees placing a strong emphasis on redesigning care pathways, introducing targeted approaches for specific cohorts of patients (eg people nearing end of life) or bolstering primary care capacity. 

2. Develop the skills and capabilities to make change happen

The focus for national policymakers should therefore be on how care will change and how policy can support it to happen. Developing the skills and capabilities needed to support these models will be critical, particularly given the depleted starting point many ICBs and trusts find themselves in following sustained pressure on budgets. These include dedicated management support to redesign services and involve clinicians and patients, advanced data and analytical capabilities, leadership training in multistakeholder collaboration and more. Leadership development should also look to strengthen ‘relational coordination’ skills that build trust and collaboration among partners (such as developing shared goals and problem-solving communication).  

Data and digital infrastructure and digital maturity across acute and community settings are also foundational. Government plans are in train to establish a single patient record and improve compliance with information standards across providers to ensure data are more transferable. But there are major questions about how these will look and work in practice and tackling fragmented local data systems will be no easy task. Getting it right and delivering what over two decades of NHS digital strategy has promised will be essential. Advances in AI may support some of the approaches being pursued within IHOs, but these opportunities depend on having interoperable data systems and may widen variation between areas if digital and analytical capabilities remain unevenly distributed. 

3. Primary care has to play a central role in IHOs

Evidence from the US suggests that models with strong primary care leadership and involvement tend to do better than hospital-led models. In the NHS, previous integration efforts have been hampered by geographical footprints that were too big to reflect the local needs of primary care services, a lack of primary care knowledge and expertise at system level, or limited engagement with primary care leaders. The smaller footprints of IHOs may help this time around, but overcoming differences in professional cultures, attitudes to risk, and priorities between hospital and primary care remains a challenge. Strong working relationships and high trust between local partners will be essential, alongside meaningful involvement of primary care leaders in IHO governance. The link between IHOs and new ‘neighbourhood health’ services at a more local level also needs to be worked through. 

Given the scale of the proposed IHOs and the infrastructure and management capability needed to manage them, as things stand it is hard to see how most primary care organisations could assume responsibility for IHO contracts. However, policymakers should continue to explore options for primary care leadership over time – for example, via smaller scale contracts or larger scale models of general practice.

4. Technical considerations must be resolved   

If payment system reform is a key component of the theory of change for IHOs, then there are complex technical considerations to iron out before new contracts can be awarded. These include detailed work on how contracts and capitated budgets are constructed to ensure they don’t undermine broader goals relating to quality of care or equity. There are also questions about the scope of services covered – for example, how whole-population-based budgets will operate alongside protected GP contracts or how local government services (the Better Care Fund, continuing health care and other areas of joint commissioning) might fit in. This points to the need for testing and evaluation (see below). But contracts on their own will not bring about change. National bodies will also need to focus on the ingredients needed for local partnerships to operate effectively across organisations – including ‘softer’ factors like leadership, culture, management, relationships and more (see above). 

Other considerations relate to contract ownership and accountability. National policy appears to be exploring different models of leadership – the two IHO frontrunners comprising an acute and community trust and a community and mental health trust. NHS leaders we interviewed held mixed views about who was best placed to hold an IHO contract, and some interviewees foresaw a challenge in aligning hospital-based models of care – often focused on episodic treatment and organisational performance – with broader approaches to improve population health. Either way, several questioned the link between IHO and AFT status, instead encouraging policymakers to explore how the model could be implemented in struggling systems that could benefit and to avoid it being a model available only to the ‘usual gang of esteemed FTs’. 

5. Consider wider implications of IHOs for the system

Standing back from more immediate questions about how these models will work in practice, IHOs will have major implications for other parts of the system. ICBs – only just emerging from swingeing budget cuts and major changes to their role – are high on the list. For some ICB leaders interviewed last year, the introduction of IHOs raises existential questions about the future role of commissioning. Providing clarity and stability to ICBs about their future should be a priority for the government. 

There are also implications for provider oversight and regulation. For example, how will regulators respond to the changing role of NHS trusts acting as both providers and subcontractors of care? How does short-term performance management in the NHS, heavily skewed towards access targets, work alongside the move to long-term outcomes-based contracts? A bigger question is how headline political pledges that focus on delivering more hospital activity and the recent return of market-style mechanisms to the NHS (such as new league tables that publicly rank providers and encourage competition between them) line up with an approach that relies on providers leaving behind their institutional mindsets and collaborating with local partners to shift resources out of hospitals.

6. Robust testing and evaluation need to be designed into the programme

Introducing any new IHO-style model to the NHS will take time and sustained effort. Leaders were in favour of a more evolutionary, staged roll out to give more time to build capacity and capability, test and learn from different approaches, and understand how it could work in different contexts. Policymakers will need to be clear about what the aims are, setting realistic expectations about what might be achieved and when. Evidence suggests it will not be a magic bullet in terms of saving money or improving population health. 

Given the limited evidence on the impact of these models and the mix of outstanding questions about how to implement them, rigorous testing and evaluation will be vital to inform implementation. But this is easier said than done and we have been here many times before. Previous national pilot programmes struggled to distil generalisable findings, synthesise learning or move from funded pilot sites with a history of joint working to something more scalable across the NHS. This time around, policymakers will need to build testing and evaluation into the design of the IHO programme from the start – for example, by being clear from the outset on the intended outcomes of IHOs, balancing the need for local learning and evaluation with national efforts to draw these lessons together, and a commitment to integrate the findings from any evaluation work into ongoing policy development.

Acknowledgements

We would like to thank the many individuals whose contributions were invaluable to this work, including those who participated in interviews and roundtable discussions. We are extremely grateful for the generosity in sharing their expertise, insights and experiences.

We are particularly grateful to Verena Schneider and Professor Cecilia Vindrola-Padros of the Rapid Research Evaluation and Appraisal Lab (RREAL) at University College London (UCL), whose work on the rapid evidence review made an important contribution.

We also thank Nigel Edwards and Stephen Shortell for reviewing a draft of the briefing and providing thoughtful and constructive feedback that strengthened the final draft.

Finally, we are grateful to our colleagues at the Health Foundation for their support throughout the development of this work, particularly Caitlyn Barrand and Isabella Lewis, whose help and guidance was greatly appreciated.

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