In October last year the government announced that it was reviewing the Carr-Hill funding formula for general practice, which is used to calculate the payments GP practices receive. But what should we be looking out for once this review from the National Institute for Health and Care Research (NIHR) lands? How will we know whether what is proposed will make the situation any better?
I had a fascinating conversation on the podcast recently with Dr Matt Jones about the Carr-Hill formula and why it does not work. What is clear is that very few people understand the formula and the impact it has, even on their own practices. If we don’t understand the problem, it will be very hard to work out what changes will improve things.
I took away five key issues that we need to look out for when the new recommendations finally land:
- Is there an up to date, meaningful marker of deprivation?
It turns out deprivation is one of the markers used within the Carr-Hill formula, termed the practice additional needs index. However, astonishingly, this is based on survey data carried out before 2000. This has the double problem of one not being very accurate to start off with, and two being at least 26 years out of date.
The new formula will need to use a better marker for deprivation, and some mechanism for ensuring it is updated on a regular basis as the characteristics of local communities can change extremely rapidly.
- Are fixed costs adequately taken into account?
Dr Jones very eloquently points out on the podcast that even though practices might only be receiving 80% of the global sum as a result of the Carr-Hill formula, they are not able to pay for only 80% of their electricity bill.
Whatever the practice, wherever it is, there are some costs that are fixed, regardless of deprivation, rurality or the age and sex profile of the local population. The current formula does not take this into account, which means the impact of the formula is amplified as practices that lose out through it have first to cover their fixed costs and are then left with an even lower proportion of funding every year to cover their variable costs. This in turn affects their ability to provide sufficient clinical capacity, a problem that is now being exacerbated with the new access requirements.
The new formula must provide some recognition of the fixed costs facing all practices.
- Is there a commitment to regularly review the formula?
One of the key problems with the Carr-Hill formula is that is has not been reviewed or updated in over 20 years. In 2004/05 the global sum was £54.72 per patient, but this year it is £130.07 per patient. This means the impact on practices being underfunded as a result of the formula has more than doubled over the last 20 years.
It is highly unlikely that whatever new funding formula is generated will be perfect. Many practices could tell immediately that there were problems with Carr-Hill when it first came out. Regular checks and reviews should be put in place up front to allow issues to be addressed quickly, rather than allowing them to compound and result in the same situation we are in now.
- Will there be transparency over funding at an individual practice level?
The result of any funding formula will mean some practices will receive more money than others. The situation with Carr-Hill, however, is that many practices do not understand these differences, let alone the patients.
If one equal-sized practice is receiving over a million pounds more funding than another, albeit for justifiable reasons, then there needs to be transparency with patients, practices and commissioners, so that expectations can be adjusted accordingly.
- Will a manageable transition plan be put in place from the existing to the new formula?
If the new formula is not accompanied by any form of cash injection then the big risk with the change is that money will simply end up being moved from some practices to others. No practices are finding life easy at the moment, so there needs to be a realistic, thought-out plan (i.e. not an MPIG) put in place that will enable those practices requiring more funding to be able to receive it without destabilising others.
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