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GPC questions need for review of GP funding formula to take deprivation into account

The GPC has questioned whether there needs to be a review of the GP funding formula to support practices in deprived areas after a Government report claimed that GPs in deprived areas take home a larger proportion of practice income after expenses.

The HSCIC carried out an analysis, titled the GP Earnings and Expensesby Deprivation Score, England 2011-12 and 2012-13, to provide evidence on the potential link between deprivation and the ratio between GPs’ expenses and earnings to feed ‘any reviews of the Carr-Hill funding formula’.

The analysis, covering a two-year period from 1 April 2011 to 31 March 2013, found that GPs in more deprived areas seemed to be taking home a larger proportion of their income before tax after practice expenses.

The GPC said that the report ‘raises questions’ about the effectiveness of reviewing the Carr-Hill formula.

The GPC and the Government have been looking into how to account for deprivation in the Carr-Hill formula since 2007 without any practicable result, but a review of the formula was again included in the 2014/15 GP contract agreement.

The plans to pay GPs more to work in deprived areas formed part of the Liberal Democrat manifesto ahead of the 2010 election but this goal recently resurfaced in a different form as part of a 10-point plan to boost recruitment as a time-limited incentive to attract new GPs to under-doctored areas.

The HSCIC chairs the Technical Steering Committee (TSC), which also has representation from all the UK health departments, NHS England, NHS Employers and the BMA, and which is looking into how Carr-Hill can be reviewed to take better account of deprivation.

The report that came out of it looked at the Expenses to Earnings Ratio (EER) for GPs, extracted from HMRC tax data, compared to the Index of Multiple Deprivation (IMD) for the practices the GPs are linked to covering a two-year period from 1 April 2011 to 31 March 2013.

Its report said: ‘The EER for 2011-12 and 2012-13 appear to show that both the EER and EER excluding premises costs are lower the more deprived the GPs’ practice patient catchment area. This means that in more deprived areas a lower percentage of GPs’ gross earnings are taken up by expenses and therefore a GP is receiving, on average, a higher proportion of their earnings as income before tax.’

On the basis of the findings, the GPC has questioned whether the review of Carr-Hill, which has been agreed in subsequent GP contract negotiations between the GPC and the Government, was actually the right way to go.

GPC deputy chair Dr Richard Vautrey said: ‘Many assume that GPs working in practices in affluent areas would earn more than those in deprived areas but this paper suggests that that is not the case and is in fact the reverse.’

He added: ‘It also raises questions as to whether changing the Carr-Hill formula to move more funding away from practices serving elderly populations towards those in areas with higher deprivation would necessarily achieve the aim it was intended to.’

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Readers' comments (16)

  • This is a ridiculous argument.If GP A takes home, say for the sake of argument , 10% of the funding after expenses in a well resourced practice, but GP B is taking 12 % in a practice which has only half the funding of the first practice, GP B is taking a higher proportion , but the cake is much smaller, so the amount he is taking home will be much less in total ( and he will almost inevitably be working harder because the practice funding is so much less.)

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  • The practice I have just resigned from as a partner has been hammered by the Carr-Hill formula. We only got paid for ¾ of the patients. We were in an affluent area, but it is not possible to provide a service on £50 per patient. Patients in our area were extremely demanding. The formula needs to be looked at so that those at the bottom are not penalised to the point of non viability, and those right at the top are probably grossly overfunded.

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  • Here's a solution:

    Fee for item. Work more, earn more. Work less, earn less.

    Let's stop the all you can eat £100 per year healthcare buffet.

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  • I so totally agree with 8.21. But is anyone listening?? Why are the GP's the only one left on block contract? Needs to stop

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  • The evidence is very clear - depravation leads to extra work and the Carr-hill formula was designed to reflect increased workload.

    Studies have been done to show the impact of depravation - clearly shows worse health outcomes and higher mortality at younger ages.

    The inverse care law was taught to me at medical school but nothing ever done about it.

    Are the GPC GPs working in affluent areas as there is conflict of interest here.

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  • Depends how hard those doctors are working.

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  • The gpc constantly breaking down amendments to Carr hill to account for deprivation is criminal and the argument above is flawed. I work in a deprived area and can't recruit. I work my ass off in an area where locums fear to tread. So my income appears high but my resources do not match. That explains the ratio anomaly. It seems the gpc want to increase health inequalities.

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  • @9.36pm
    The evidence also shows that those with higher deprivation are likely to present less frequently and at an more advanced stage than those with a higher socio-economic status. Both of these factors affect outcomes. They are also more likely to smoke more, drink more, eat less healthily and have a higher incidence of domestic violence. They are more likely to have only completed a lower standard of education, live in poorer conditions with worse sanitation. Giving a slum an Aston Martin to solve its transport needs is simply nonsensical - but a lot more fun for the driver.

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  • @9:39
    That is what we were taught at medical school 20 years ago.

    The truth is times have changed, the recent tower hamlets study has clearly shown increase consultation rates with depravation.

    It is sad to see the GPC not representative of its members.

    The inverse care is alive and kicking

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  • Bornjovial

    Please note the take home pay toearnings proportion is not same as pay!

    Also this proportion can be varied on accounting whim on two exactly similar practices with same earnings.
    Eg. Training Practices have GP registrar pay come in income and expense (this item is 100% of income goes as expenditure), ditto for trainers grant , OOH work, CCG work, LMC work, Hospital work (if they are pre-allocated to a particular partner before profit calculation). Also if medical defence payments are paid by practice rather than individual this reflects on the proportion.( the individual tax liability is the same but the proportion varies).
    Some PMS practices allegedly had taken QOF out of pensions as a limited company -they again will have low take home pay compared to earnings (i.e. practice income is PMS income without QOF - expenditure).
    Also higher earnings even if they are true don`t reflect workload or patient population served.
    Deprived areas have shortage of GP`s (not really a surprise) and hence GP`s have higher list sizes per GP and that means more workload so naturally should be paid more!
    Consultation rates are higher in deprived areas (esp inner city/town) - upto 10 consultations/patient/yr compared to rural and leafy suburbs where typical consultation figures are 2.5-3.5 consultaions/pat/yr.
    All these need to be taken into account before interpreting these accountant dependent pseudo-surrogate markers of income.
    Payment by tariff would solve most (there are some caveats) of these these problems, work more -get paid more, work less- get paid less.

    http://static.www.bmj.com/sites/default/files/response_attachments/2014/12/Fig%201%20fairer%20funding%20formula.doc

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