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GPs face radical primary care funding revamp

By Lilian Anekwe

Exclusive: GPs face a radical shake-up of primary care funding with plans for a new allocation formula for practices and consortia that could even replace the global sum.

The new system will allocate a GP commissioning budget to each practice, and by adding them together to consortia, based on patients’ predicted future use of NHS services.

It could see huge swings in funding for local services, and if applied to GP contract cash would see some practices gain and others lose to the tune of thousands of pounds, according to one GP expert.

Health policy thinktank the Nuffield Trust is devising a new ‘person-based, risk-adjusted resource allocation system’ for the Department of Health, using risk prediction tools to calculate likely future use of NHS services.

The trust, which is drawing up the formula with the Centre for Health Economics and Imperial College London, set out first details in a new report and said it could be used to set both commissioning budgets and GPs’ practice funding.

‘Current work for the NHS in England will see risk adjustment used to set GP practice and possibly consortium budgets, based on predicted capita inpatient and outpatient costs of their registered populations,’ the report says.

‘Aggregated predictions for a GP practice list are now being used to set practice budgets for commissioning so they reflect the underlying morbidity.’

Practice funding is currently calculated through the global sum formula, while PCTs in England are funded through a weighted capitation formula, to provide similar levels of healthcare for populations with similar need.

But the DH plans to move from this approach to funding ‘based on predicted capita costs of GP registered populations’.

Dr Martin Bardsley, head of research at the Nuffield Trust, said the new funding formula was a ‘step change’ that would be much fairer than current funding for demographically mixed areas: ‘The DH asked us to refine the model and it could be used to set a practice’s proportion of a commissioning budget or practice-level funding.’

But Dr Gavin Jamie, a GP in Swindon and author of the website, warned some practices could lose out if the DH moved away from the global sum formula.

‘Defining use is quite easy but defining future need is much more difficult. People who use a lot of NHS services now will get a lot more funding.’

A DH spokesperson said: ‘Work commissioned from the Nuffield Trust will inform final recommendations in June.’ The spokesperson said it was ‘unlikely’ the formula would replace the global sum, but refused to rule it out.

How a new formula is set to work

• Pseudonymous healthcare records used to categorise individual patients into different groups based on expected healthcare needs.

• Variables in previous years, such as diagnoses of patients registered at each practice, used to predict the costs of care in the subsequent year.

• Results used to compute practice-specific weightings for age and sex categories, which can be applied to the most recent population data to determine a budget for each GP practice.

Source: Nuffield Trust. Predictive risk and healthcare. 2 March 2011

GPs face radical primary care funding revamp