Unclear whether deprived area GP funding increase will come at cost to other practices
Exclusive GP leaders claim to have been told the Carr-Hill formula review – aimed at increasing funding for practices in deprived areas – may have to be ‘cost neutral’.
However, the Department of Health and Social Care told Pulse that it was too early to make that decision.
In high-profile announcements, health secretary Wes Streeting has pledged ‘working-class areas’ will receive their ‘fair share of resources’ as a result of the review of the GP funding allocation formula.
Pulse now understands that the BMA GP committee was told by NHS England that it would be reviewed in ‘a cost-neutral way’.
What is the Carr-Hill formula?
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. It has been subject to on-off reviews since 2007, after being frequently criticised for not sufficiently taking into account deprivation.
In an update to GPs in his area, GPC member Dr Brian McGregor said: ‘We were told NHSE would like to review and possibly alter the Carr-Hill formula in a cost neutral way – this will inevitably mean winners and losers, those old enough to remember MPIG will be aware of the inherent risks in that process.’
Speaking to Pulse, England GPC chair Dr Katie Bramall warned that such an approach could ‘destabilise practices’ in the same way minimum practice income guarantee (MPIG) withdrawal and reviews of PMS funding did a decade ago.
She told Pulse: ‘Cost-neutral means taking from existing practices and giving to others. Now there might be some very good reasons as to why that makes sense, to protect more deprived communities and more complex presentations, but that will destabilise those practices receiving less.’
She said that previous reviews of funding mechanisms have caused practices to close or hand back their contract, sometimes due to ‘MPIG-shaped holes in their finances’.
The fallout of the MPIG removal and PMS review
When the 2004 contract came into effect, the BMA negotiated the MPIG, as an assurance that no practice would receive less than they previously had.
The phasing out of the MPIG started at the beginning of the 2014/15 financial year, with practice correction factor payments reduced by one-seventh, and Pulse revealed in 2021 that GP practices who had been reliant on MPIG funding in England were receiving significantly less funding than those who were not.
And in 2014/15, PMS practices lost huge amounts of money as a result of the reviews being held by NHS England area teams. The reviews looked at £260m worth of funding received by PMS practices annually that a national review the previous year found was not linked to specific services.
Dr Bramall added: ‘We saw what happened with the PMS review in 2015 and the minimum practice income guarantee, and I remember that being negotiated on GPC back in the day, and I have seen practices close and hand back their contracts because they have MPIG-shaped holes in their finances.’
Asked whether the Carr-Hill review will be cost neutral, DHSC told Pulse that these suggestions were not accurate and that decisions about implementation will need to be taken following the recommendations of the Government’s funding review and cannot be pre-empted.
NHS England declined to comment.
The health secretary previously told MPs that the Government ‘will consult’ on the Carr-Hill reform, but DHSC has confirmed to Pulse that this will only be with ‘key stakeholders’.
Last month, Mr Streeting told the BMA Special Representative Meeting that he will ‘work with’ GPs to avoid ‘unintended consequences’ of the formula review.
The review will look at how health needs are reflected in the distribution of funding through the GP contract, ‘drawing on evidence and advice from experts’ such as the Advisory Committee on Resource Allocation (ACRA), and ‘in consultation’ with the GPC, the Government has said.
Doctor leaders warned all along that it is ‘essential’ that any changes to the formula are accompanied by an overall increase in funding for general practice, as simply redistributing a fixed pot of funding risks creating new pressures in other areas.
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READERS' COMMENTS [2]
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The only effective way of dealing with this is to level up and to invest in these communities, not just in health, but in terms of employment opportunities, the quality of accommodation, and other social determinants of health. I would argue very strongly this is an investment, and the government ought to be able to borrow. Time will tell.
Agree DC. With fiat currency and monetary sovereignty, our Govt needs to spend the money into existence (ie invest in the NHS) for the public goods we as a country value – and, if needed to stabilise the economy and the interest rate, sell treasury bonds (ie borrow). The banking sector, private sector and the real economy will do the rest….
Successive Govts Ministers tell Drs how to do their jobs, but they themselves don’t even understand the basic economics of running an economy!! We should demand better from our Govt ministers..