New models of NHS Care

Following publication of the NHS five year forward view, commissioners are developing new, population-based models for local health services.

The new models of care are based on the idea that services work better if they are integrated. They also seek to develop ways to treat more patients in settings outside of hospital.


NHS England is running a consultation on integrated care, click on the button to give your views:

The new ways of organising care are a key aspect of the STPs which often discuss the formation of multispeciality community providers (MCPs), primary and acute care systems (PACS), local care organisations (LCOs) and integrated/accountable care organisations (ICOs/ACOs). These terms are scattered throughout the STP documents, but can mean slightly different things in each area. This page gives an overview of what these terms can mean.

Multispeciality Community Provider (MCP)

An MCP is a type of integrated provider focused on community care and moving care from hospital-based services out into the community; MCPs often include primary care.

An MCP can incorporate some services generally based in hospitals, such as some outpatient clinics or care for frail older people as well as some diagnostics and day surgery. An MCP often includes mental as well as physical health services and could extend to social care provision. Under an MCP, hospital-based services not within the MCP are provided by a separate contract with a local hospital.

MCPs are generally made up of  ‘care hubs’ of integrated teams, with each typically serving a community of around 30-50,000 people.

Importantly, an MCP serves the whole population, which is the registered lists of the participating practices, plus the specified unregistered population.

A fully integrated MCP, which includes all primary care, can hold a single, whole population budget for all the services it provides, including primary medical services.

MCP Vanguards

England has 14 MCP vanguards - areas which have led the way in developing this new model of care, and these now serve a minimum population of around 100,000 each. These are, as follows:

The Dudley Contract

In June 2017, Dudley CCG, one of the 14 MCP vanguard areas, became the first MCP vanguard to advertise a contract for its MCP.  The contract notice issued by Dudley CCG and Dudley Council states that the 15 year contract worth £3.4 to £5.4 billion will cover all community-based physical health services; some existing out-patient services; primary medical services; urgent care and primary care out of hours services; adult social care services; mental health services; end of life care; plus IT and management activities currently carried out by the CCG. The contract will cover around 300,000 people. As this contract aimed to include GP services, it has been likened to an Accountable Care Organisation (ACO) contract. The contract also involves a capitated budget.

The contract could extend to cover more areas, including older people's care (including care homes, home care, dementia gateways and reablement services) and learning disability services (including care homes, supported living, other community based provision); mental health services (care Homes / supported living / recovery model provision); plus many other services currently commissioned from the voluntary sector and services commissioned to support the public health and/or social care commissioning operations of Dudley Metropolitan Borough Council and Dudley CCG.

The closing date for tenders was 13 July 2017 and the contract was due to begin 1 April 2018. In August 2017, Dudley CCG announced that its preferred provider to operate the contract was a consortium of local GPs, The Dudley Group Foundation Trust, Birmingham Community Trust FT; Dudley and Walsall Mental Health Partnership Trust and the Black Country Partnership FT.

There have been a number of issues surrounding the contract and the organisational changes needed in the area. The original option to create a consortium met with VAT issues. In January 2018, Dudley CCG reported that the implementation of the contract has been delayed and the contract will not be awarded until late October/early November 2018 with a start date of April 2019.


The Manchester Contract

In April 2017 Manchester Health and Care Commissioning advertised a contract worth £5.9 billion for a provider of all out of hospital services. The contract, the largest ever to be advertised by the NHS, is for a ten year period. The contract is seeking what it terms a "local care organisation" to cover all community, primary, preventative, and social care services. The contract does not include hospital care. The contract is seeking a single provider, but the provider will be allowed to subcontract. This contract is being likened to an ACO.

The development has met with problems. The idea was to form a new organisation that could be jointly owned by the NHS trusts, council and GP federation, but this is not possible due to existing laws. There are also issues of VAT liabilities and exemptions, as these are applied differently between NHS trusts and private entities when it comes to subcontracting services from suppliers and could result in additional charges. 

In January 2018, the HSJ was told that there were concerns about the timeline for launch of the LCO, "with senior figures describing it as “unrealistic”."

The HSJ was told by an MHCC spokeswoman that the “local care organisation” will still go live from April, but the services will be provided through “existing contracts and partnership agreements”.

Integrated primary and acute care systems
Nine regions are acting as vanguards for the formation of primary and acute care systems (PACS) as a model of integrated care.  In contrast to the MCPs, this model of care includes hospital care, as well as GP, community and mental health care. These nine vanguards are as follows:

This model of care can be developed into an accountable care organisation (ACO).

Integrated Care Organisations (ICO) and Integrated Care Systems (ICS)

NHS England no longer uses the term accountable care organisations/system, but uses the phrase integrated care organisation/system. In many cases the STPs discuss the formation of an integrated/accountable care system (ICS/ACS) or an integrated/accountable care organisation or ICO/ACO. In general an ICS and an ICO bring together a number of providers to take responsibility for the care of a defined population.

The ICS have evolved from STPs and bring together NHS providers and commissioners and local authorities to work in partnership in improving health and care in their area. The alliance between the organisations is looser than for an ICO and there is no single contract. An ICS is a precursor to the formation of an ICO.

In an ICO the provider operates under a single contract within an agreed budget. ICOs take many different forms ranging from fully integrated systems to looser alliances and networks of hospitals, medical groups and other providers.

The theory behind ICOs is that if the organisation has a limited budget for a population, this acts as an incentive for the organisation to keep people as healthy as possible to decrease overall use of healthcare services, and to minimise the use of high-cost hospital-based care by ensuring effective community-based provision.

In the USA, where the ACO (it is always known as accountable care here) system has been introduced over the last few years, the key to the model is a capitated payment system under which the partners can retain any savings they achieve. Such payments are dependent on the ACO achieving numerous quality and outcome measures that incorporate patient experience, patient safety and preventative care.

More details on ICO and ICS can be found at our Integrated Care Organisation page here.

Contract issues

According to NHS England, there are three contract possibilities for these new models of care:

  • A ‘virtual’ contract, under which individual providers and commissioning contracts are bound together by an ‘alliance’ agreement.
  • A ‘partially integrated’  contract, which excludes primary medical services, but which is supported by contractual arrangements between the MCP and the GPs to lead to integration.
  • A ‘fully integrated’  contract model with a single whole-population budget across all primary medical and community based services (and potentially acute services). Because primary care services would be commissioned under the new contract, the fully–integrated model requires GPs to be released from their current contracts.

In August 2017 NHS England published a new contract and guidelines that will cover the delivery of all accountable models of care, including the delivery of primary care and other services through a single contractual model; this contract can also be used for MCP and PACS models of care. The model still contains three possible forms of contract approach - virtual, partially-integrated and fully integrated.

The contract and guidelines published in August 2017 are subject to revision.

Contract duration will be much longer than is usual for an NHS standard contract at 10 or 15 years.

Payment to the MCP/ACO will be made up of three parts: a whole population budget for the range of services covered; a new performance element; and a gain/risk share for acute activity.

According to NHS England, the contracts for the new models of care can be held by a community interest company, a limited liability company or a partnership, or by a statutory NHS provider.

The development of ACOs is the subject of much controversy and legal challenges. See our page on Accountable Care Organisations for more details.