The report, Towards integrated health organisations: considerations for policy and NHS leaders, provides a detailed breakdown of what IHOs are and how they can be effective. 

It makes a series of recommendations to policymakers, including NHS England updating the NHS Oversight Framework so it incentivises transformation and collaboration between organisations. 

In addition, the report argues that legislation and policy on IHO governance should remain permissive and that the government should avoid prescribing foundation trust governance in detail.

Based on interviews and a roundtable with more than 30 healthcare leaders across NHS Confederation's primary care, community, mental health, acute and ICS networks, the report presents considerations for local leaders and the government to develop IHOs across four components: 

• Contract: A capitated contract for a whole population awarded by an ICB to a host provider, which holds the IHO contract on behalf of a group of providers, then delivers and/or sub-contracts services, aligning financial incentives between providers to reduce downstream demand.
• Structure: A high-performing foundation trust as the ‘host provider' will need collaborative structures to work with other care providers in partnership including local government.
• Governance: While an IHO will not be a new legal entity, the host provider's governance should adapt to focus on improving population health and the sub-contracting of services from other providers, not just service delivery and organisation performance.
• Behaviours and leadership: Beyond hard mechanisms, the success of IHOs will depend on trust, relationships and shared purpose across partners. Leadership should be about convening, not controlling.

Annie Bliss, senior policy adviser at The NHS Confederation and report co-author, said: 'The 10-Year Health Plan introduced IHOs as a population-based contracting approach to improve outcomes for patients and improve value for money through greater allocative efficiency – ultimately moving towards models of care that are more preventative and delivered closer to communities.

'IHOs are a way to align financial flows and incentives to enable the NHS to shift more spending toward earlier and more cost-effective interventions, helping to fix the NHS.'

Rebecca Hainsworth, partner in commercial health at Browne Jacobson, said: ‘Host providers, collaborative arrangements and expected outcomes should be agreed locally, rather than imposed from above. While the first wave of IHOs might be authorised centrally, they should in future be initiated by ICBs.

‘However, it's important to ensure national policy is aligned with supporting IHOs. The NHS Oversight Framework's financial and performance metrics should incentivise collaboration between organisations needed to deliver an IHO contract.

‘Barriers in competition should be addressed, in consultation with the Competition and Markets Authority, and legal changes made to better enable social care and public health services to be included in IHO contracts in future.

‘While IHOs are intended to improve allocative efficiency and financial performance, limiting IHO contracts to only ‘high-performing' foundation trusts risks exacerbating performance variation and inequalities. A clear pathway is needed for organisations with lower performance in some areas, but strong leadership capability and partnerships, to hold an IHO contract.'

The full report can be viewed here.