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Giving GP practices extra funding ‘could cut hospital costs by 10%’

Cutting back the minimum practice income guarantee (MPIG) ‘may be counterproductive’ because it could lead to rising costs in secondary care, researchers have warned.

A study analysing the relationship between funding of GMS and PMS practices and patient use of hospital services found that MPIG-receiving practices had lower A&E usage and fewer emergency admissions among their patients.

The Government announced five years ago that it would abolish the MPIG gradually over a seven-year period between 2013 and 2020.

But the study, published in the British Journal of General Practice, suggests that giving practices a higher rate of supplements could reduce the cost of secondary care by 9.8%.

The report said that for MPIG practices, there was ‘a clear association between higher levels of funding and reduced secondary care utilisation’.

The authors speculated the same outcome was not seen for ‘better funded PMS practices’ because they had reached a level of funding where it no longer had an impact on secondary care savings.

The study concluded: ‘The findings suggest that capitation payments are broadly aligned to patient need, at least in terms of secondary care usage. However, supplements to the current capitation formula may produce a reduction in secondary care costs.

‘If these findings are borne out by further studies, proposed reductions in capitation supplements may be counterproductive.’

The Kings College London researchers analysed Department of Health funding data for 7,478 practices in England (excluding APMS contracts) in 2014/15 and compared this with DH data on hospital use.

The authors conducted financial modelling which showed that if the capitation supplement was doubled, this would cost £5,700 per 1,000 registered patients.

They found that investment in primary care would be associated with a £6,300 reduction in secondary care costs, representing an overall 9.8% saving in secondary care costs.

Lead researcher Dr Mark Ashworth, clinical senior lecturer of the Department of General Practice and Primary Care and a GP of 30 years, said the additional payment ‘was more than offset by the financial savings in hospital costs’.

He added: ‘Put another way, practices with lower capitation supplements had higher secondary care costs. Cutting capitation supplements is likely to be a false economy.

‘Primary care is the health economic jewel in the crown of the NHS.’