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Rewrite of Carr-Hill formula could lead to 30% swings in practice funding

GPs could see swings in funding of as much as 30% under plans for radical reform of the general practice funding formula designed to divert large sums of money to deprived areas.

The Carr-Hill formula for determining GPs’ income could be replaced with a new postcode-based funding system, after the Government and GPC agreed to discuss how the formula could be adjusted from 2013/14.

The move is being explored in line with the Liberal Democrat manifesto pledge for GPs to receive more funding for working in practices treating patients from the most deprived areas via a so-called ‘patient premium’.

The GPC said it had agreed to consider giving greater weighting to deprivation factors that could see money diverted to more deprived areas, but warned that any changes would need ‘very careful’ modelling.

The Lib Dem plans are aligned to the findings of a 2009 report by the think tank Policy Exchange, which called for premiums to be paid for GPs in a bid to encourage them to work in areas with high deprivation, and for practices to be paid according to the age and postcode of their patients, broken down to as small an area as 15 homes.

If progressed along these lines, the move could invoke funding swings of more than 30% if resources are shifted from the most ‘over-funded’ to the most ‘under-funded’ areas.

In a letter to GPs, GPC chair Dr Laurence Buckman wrote: ‘We have agreed in principle to explore how the Carr-Hill formula might be adjusted from 2013/14 onwards to give greater weighting to deprivation factors. Such work will refer to the Formula Review Group recommendations from 2007 and Professor Roy Carr-Hill’s original work in 2001-03.’

GPC deputy chair Dr Richard Vautrey said the plans were currently at ‘at the exploratory stage’, but would form a part of next year’s contract negotiations.

Dr Vautrey said: ‘It’s an aspiration that was highlighted in the Lib Dem manifesto to try and have a patient premium for patients within deprived areas. It’s very much an open discussion at this point to see if there is any scope to look at the formula, and see if it is appropriately weighted for patients in deprived areas.

But he warned: ‘What we would have to do is model any potential options because you may well try to achieve one outcome that could lead to lots of unintended consequences.’

What is the Carr-Hill formula?