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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NHS England said that the existing Carr Hill formula used to calculate funding received by individual practices was out of date, and that it has frequently been criticised.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NHS England said it had reviewed the Carr Hill formula as the underlying data on practices and regions was out of date, having been based on research from 1999-2002.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)

  • It is true = some practices get 500 [ a few] , others 100 pounds gross per patient.[ profit is 70]
    The question is more this = What is a fair pay for 6 consultations and 24 other contacts [ scripts, letters, blood tests etc ] per year per patient.?
    Profit in my practice is 60 pounds for 7 consults, which is 60 % of workload ie 36 for 7 which is about 5 pounds.
    Before tax etc. after tax you get about 3 pounds per consult.
    Look at this another way.
    40 consults per day X 3 = 120 + 80 [ paperwork]= 200 X 20 days = 4000 X 12 = 48000 X 2 [ tax etc ] = 96000 pounds.
    Question is this = do we wish to see patients for 3 pounds take home ? Or is it time to pull the plug ?
    I think it is time to pull the plug. All those years of training, all the CQC,GMC,Hunt,Papers, patients,peers, professors for 3 pound per consult.
    GPC, we are paid a pittance and they want to cut funding to some practices, Please ballot for pulling the plug

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  • They want to publish pay. please do. Per Consult.

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