Conclusion

IHOs can improve health outcomes and allocative financial efficiency by aligning incentives for providers through a lead or ‘host’ provider model, delivering a better and more cost-efficient service for patients and taxpayers. IHOs are one of several models available to local leaders to integrate care and improve population health at a lower cost. For areas eligible, IHO contracts can be part of the answer to fixing the NHS and putting it back on a sustainable footing. 

To become an IHO, a foundation trust will need a capitated contract, a lead provider structure, governance focused on improving population health and to demonstrate collaborative leadership and behaviours. As such, all local providers and the ICB should agree to an FT taking on an IHO role. Local provider and ICB leaders believe few providers, if any, will be ready to take on such a contract immediately, as they represent a significant change to how services have historically been contracted. In contrast, every area will hold neighbourhood provider contracts in the immediate future.

There are tensions between what is required to foster the collaborative behaviour which local leaders say is necessary for IHOs to succeed, and existing national policy. This includes performance oversight and league table metrics focused on individual organisational activity and sovereignty rather than system working, financial oversight of individual organisations rather than systems collectively (system control totals), an existing FT regime focused on competition not collaboration, and the abolition of ICB partner members when IHO host providers may need partner member equivalents in their FT governance. Meanwhile, the purpose of IHO contracts - to deliver financial improvement - is at odds with restricting IHO host providers to only the best performing systems and providers. This also risks increasing performance variation.

As NHS England develops a model IHO blueprint, it will need to address the respective roles of ICBs and regions in oversight of IHO host providers; regional teams’ capability and capacity to do this; the future role of the CQC; and aligning the FT status approval status and National Oversight Framework with the collaborative behaviours required of all parties to an IHO contract. The NHS Confederation proposes six recommendations to the Department of Health and NHS England to support the evolution of IHOs.

While there is much work still to be done to hold IHO contracts, and some areas will need to wait longer than others, IHOs can become a crucial part of fixing the NHS. The NHS Confederation and our members stand ready to give them the best chance of success.