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MPIG payments to be reduced by average £1,700 a year

The DH has announced MPIG payments will be reduced by an average of £1,700 a year from March 2014 until it is completely phased out in 2021, with GP leaders warning it could spell ‘absolute disaster’ for some practices. 

The money gained from the seven-year MPIG phase out will reinvested partly into global sum payments and partly to other payments in an effort to close the funding gap between practices, the DH said. This would provide ‘some uplift across the board’, it added.

The correction factor payments are received by 61% of practices and the average sum received by these practices is £12,000, the DH confirmed. Previously the Government had said they expect 50% of practices to gain from changes to MPIG, and the other 50% of practices to lose.

DH figures obtained by Pulse last month found that the average practices receives £12,000 a year from MPIG, though the figure varies hugely, with one unnamed practice receiving £370,000 a year - a correction factor payment worth more than nine times its global sum.

Bob Senior, head of medical services at RSM Tenon previously told Pulse that the phasing our of MPIG could lead to a ‘bloodbath’ in practice funding, resulting in surgeries with a list size of less than 4,000 patients closing.

Phasing out MPIG in seven years could lead to a change in the landscape of general practice in England, with a gradual disappearance of small and single-hander practices and a shift towards larger practices, he said. 

Mike Gilbert, a medical accountancy specialist at RMT accountants said: ‘The DH aren’t qualified to say that 50% practices will lose and 50% of practices will gain. They don’t have access to practice accounts. It’s the practices which most heavily rely on MPIG that will lose out, but until we see the mechanics of it we won’t know by how much.’

He added that this raised questions about the funding of out-of-hours services: ‘We should also be asking what the impact is on out-of-hours. Will it be out-of-hours based on 6% of the global sum.’

Dr Nigel Watson, chair of the GPC’s commissioning subcommittee, said that that 60% of practices in Wessex rely on payments through MPIG, and that the changes will prove to be an ‘absolute disaster’ for some.

He said: ‘For some it’s under £30,000, but a small number still get 30% of their income through correction factor payments. They might be a rural practice, have a very young population or split sites. Removing correction factor payments would leave these practices unviable.’

He agreed the MPIG phase-out could change the landscape of general practice in England. He said: ‘Small practices are going to need to federate and practices with split sites are going to have to close branches. This will ultimately affect patients because practices won’t be able to provide the same quality services. Already practices are thinking about what services they can drop because unless people continue to work for less they’re just not sustainable.’

Dr Watson added that he is ‘not reassured’ by the DH’s pledge to reinvest the funds partly into global sum payments. He said: ‘The question is whether a formula is sufficiently sensitive to take account of different workloads and different populations, which of course it can’t. A formula can’t adequately reflect the difference. It’s going to be challenging, a tough time for practices.’