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Carr-Hill formula ‘very unlikely’ to create more equitable allocation, finds study

The NHS payments formula to practices is ‘very unlikely’ to benefit practices in more deprived areas, a new study has found.

The Carr-Hill Formula, also known as the global sum allocation formula, was introduced in 2004 as the basis of core funding for GMS practices to ensure funding reflects factors that influence patient needs and costs. 

Researchers from the University of Leicester analysed data for 6,900 UK practices over 2013/17 – published by Public Health England, NHS England, NHS Digital, the GP Patient Survey and the Department of Health – to investigate whether payments made under the formula increased more in practices located in the most deprived practices.

The study, published in the British Journal of General Practice, found that for every 10% increase in the practice’s Index of Multiple Deprivation score, payments only increased by 0.06%, which suggests the current formula is very unlikely to lead to a more equitable allocation of NHS practice funding. 

The researchers said the study’s outcomes ‘raises the question of what the payment system is intended to achieve and what the NHS’s priorities are, given the persistent and wide disparities in health outcomes between the more and less privileged.’

They added: ‘Not only does the existing NHS payment formula for general practices operate less than optimally to reflect practice population health needs, but it also has little redistributive potential and is unlikely to lead to any substantial narrowing of gaps in funding between practices with differing workloads due to the characteristics of their populations.

‘The continuing absence of any measure of deprivation in the Carr-Hill formula means that some practices, particularly those working with socioeconomically disadvantaged populations, are not currently or imminently likely to receive the necessary additional funding they require to handle a greater workload.’

The research follows a previous study by the University of Manchester that found that the formula was ‘inaccurate’ and ‘out of date’.

The Carr-Hill formula has been subject to an on-off review since 2007, after being frequently criticised for not sufficiently taking into account deprivation.

A House of Commons briefing paper published in September 2019 said that ‘a new funding formula will be developed to better reflect practice workload, including deprivation and rurality’ by April 2018 but no significant changes have been implemented yet.  

In 2017, NHS England released guidance saying CCGs should identify which practices were disadvantaged by the Carr-Hill allocation formula and offer them the required support.

Earlier this year, RCGP Scotland warned that funding for some practices in the most deprived areas will worsen health inequalities under the new GP contract.