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Independents' Day

Practices face £35k funding swings as NHS reviews funding for deprived areas

Practices could face huge funding swings that would see some average practices losing £25,000, while others gain £35,000 after NHS England gave a ‘very clear steer’ as to how it was looking to change the funding allocation formula.

NHS England said that the existing Carr Hill formula used to calculate funding received by individual practices was out of date, and that it has frequently been criticised.

As a result, it had modelled a new formula that would benefit more deprived areas by £8.66 per patient, while other areas will lose £5.88 a patient.

NHS England said that the new model with initially be used to guide CCG funding allocations in the medium term.

But it has said it ’does not imply any particular adjustments to GMS contracts’, but added that work was underway to ensure that chances to GMS contract is ’synchronised with the allocation formula developed here’.

GP leaders said it did give a ‘very clear steer’ around what NHS England wants to do with practice funding.

The future of the Carr Hill formula has been the subject of discussions between GPC and the NHS for a number of years.

This year, the Government announced that it was establishing a review group to examine whether there should be a change to the formula.

The review group has not yet concluded, and any changes to the formula will have to be agreed with the GPC.

However, the modelling was detailed in the financial report to the NHS England board meeting last week, which also announced the increase in funding for general practice.

NHS England currently uses the Carr Hill formula as a guide to how much funding each CCG should receive, but it has said it will adapt the formula in January.

As a result, CCGs in more deprived regions will expect to receive £5.12 more per patient over the next few years while others in wealthier areas will face cuts of £3.58 per patient.

NHS England said it had reviewed the Carr Hill formula as the underlying data on practices and regions was out of date, having been based on research from 1999-2002.

It said: ‘The existing allocation model for primary medical care is based on the contractual formula that is at the heart of the General Medical Services (GMS) contract, usually referred to as the Carr-Hill formula.

‘This model has been frequently criticised in this context because it was developed more than ten years ago and is based on data that are around 15 years old.’

However, when updating the data, NHS England found that some regions would be in line for funding increases worth £8.86 per patient, compared with others who would face cuts of £5.88 per patient.

In an attempt to reduce these funding swings, NHS England devised a new formula that does not take into account rurality, as there was ‘not sufficient evidence to distinguish higher demand in rural areas’.

NHS England concluded: ‘It is clear that the new model will tend to target more resources at the most deprived areas.’

It said that this change ’does not in itself imply any particular adjustments to GMS contracts’.

However, it added: ’Work is underway to update the formula to influence such payments for subsequent years while ensuring that any future change to payment formulae is synchronised with the allocation formula developed here.’

GPC deputy chair Dr Richard Vautrey said: ‘It does give a very clear steer as to what their expectations are around the Carr Hill formula, and that is before the Carr Hill group have reached its conclusions.’

Practices in deprived areas welcomed the change.

Virginia Patania, practice manager at the Jubilee Street Practice, which has long campaigned for a change in the funding formula, said: ‘I am actually extremely happy and proud at the moment, although I appreciate we need a lot more detail to evaluate this success.’

Readers' comments (22)

  • At last-working in a deprived area is finally recognised-recruitment is at its worst in deprived GP areas.
    Yes, I am sorry to leafy Surrey but you will still get bottles of Chateau Lafite at Christmas.

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  • To the above. I think its simplistic to assume that all those in well to do areas are having an easy time of it, so I wouldn't be too quick to gloat about this. funding does need to reflect the workload but this should be EXTRA funding, and not at the expense of others. I say this as a partner in a particularly deprived area of north east before you might assume the opposite

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  • Dear Anonymous,
    That view might have held some sway decades ago but now that the NHS is a demand led commodity there are massive issues with the workload of the worried well. My shortest ever presentation was of a child first complaining of a headache during the school run, the mother of course immediately diverted direct to our surgery. I'm in Wimbledon. Resources are tight. Ask Hampshire how much they get per head compared with the inner cities (a lot less). So my friend these rumours are baseless. Tower Hamlets gets 17% more than we do. So my friend distribution is not what myth says it is.
    The problem with Carr -Hill was that it was never properly funded. Nursing home residents had a Carr-Hill factor of 4-5 times the baseline. Because HMG didn't have the money the actual factor applied was 1.5. SO everyone is underfunded, not just Surrey. We have 400% of the national average of nursing home patients. Think about that in a demographically challenging world. NHS Englands approach is far too simplistic and not real world based. Rather than arguing over each others share of the breadcrumbs we should all be arguing for a properly funded NHS.
    Paul C

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  • Vinci Ho

    You see .
    Are we talking about the scenario where all the kids were under-fed in the house but only some of them are less under-fed OR
    really some kids were 'over-fed'?

    While shifting the food around without overall increase might be fair in the latter, you need more feeding for everyone in the former !!

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  • Let's be honest, if working in a deprived area was no more challenging than working in affluent area...please explain why there is a huge preference for working in affluent areas and why deprived areas have the worst recruitment problems??? Market Forces are at play.

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  • I am not sure I am over the moon that a local CCG with 200k patients might get an extra £1.7 mil towards devising an obstacle course for practices to tackle.

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  • Dear Anonymous 6:41,
    Far too simplistic again. Yes there are forces; 1) life forces - ever thought the doctor might actually prefer to live somewhere nicer and not in your deprived area? 2) your market forces - being in a deprived are you won't have experienced the impossibility of property driven market forces, the leafy suburbs have similar recruitment problems because young GPs can't afford to live in the area. Everywhere is suffering recruitment problems.
    Lift that wool, read these posts again and focus on the real issue. Robbing Peter to pay Paul is diverting your eyes from the real problem.
    Paul C

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  • Money that goes to the CCG will be swallowed up by the hospitals.

    We need money to go to primary care.

    Also a lot of Inner city practices are PMS and have had their funding decimatd

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  • Let common sense prevail

    Could anyone please show me the practice who can afford to have its funding cut?

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  • The idea that CCGs is deprived areas will gain from those in more affluent ones is all very well. However in Somerset, bound to be considered a nice place to live (although practices are having trouble recruiting) we have pockets of deprivation equal to anything elsewhere. My present practice is in the drugs, alcohol and mental health centre of town for example. The nearest I have experienced to it was working in Thamesmead in the 1980s. My point is that CCG areas are not homogeneous.

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