Carr-Hill overhaul must consider young deprived patients, says new report

The current GP funding formula must be replaced with a new ‘needs-based’ system, taking into account younger populations living in deprived areas, an influential think-tank has recommended.

The Carr-Hill formula should be replaced to include adjustments for ‘unmet need’, according to a report by the Nuffield Trust.

It pointed out that the current formula uses ‘an outdated workload-based approach’ – based on how much of a GP’s time patients use rather than patient need.

The authors said that GP practices in poorer areas currently receive 9.8% less funding on average than richer areas, and that while various other payment streams also skew funding towards affluent locations, Carr-Hill ‘drives the disparity’.  

This reform of Carr-Hill should be accompanied by review of all GP funding streams, moving all PCN funding streams ‘to the most progressive available formula’, the authors added.

They stressed that alternative options are ‘interim workarounds’, including policies aiming to address under doctoring and improve premises in deprived areas, which are needed but should not be relied on ‘as a total solution’.

The current formula is supposed to ensure resources are directed to practices based on an estimate of their patient workload, taking into account ‘drivers of workload’ and ‘unavoidable costs’. 

But both the RCGP and the BMA have argued for years that it needs to be replaced to accurately reflect the communities that practices care for.

The Nuffield Trust report said: ‘Replacing the Carr-Hill formula with a needs-based formula is the best and most sustainable way to make general practice funding more equitable.

‘A new formula should include adjustment for unmet need, to include younger populations living in deprived areas, maximising the lifelong benefits of prevention and early intervention and investing in reducing inequalities over the long term.’

The authors said that these reforms would be facilitated by adding funding to the core GP contract to ensure that no practices lose income, and by ‘broader changes’ to the GP contract aimed at better tying funding to desired outcomes.

It mentioned as a successful example a funding model developed by Leicester, Leicestershire and Rutland ICB where the cost-of-staff element in the Carr-Hill formula calculation has been replaced with a needs-and-deprivation element, which was awarded money to run until next year, despite facing criticism from local GPs.

Nuffield Trust director of research and policy Dr Becks Fisher, who is a GP, said that the existing model’s ‘ongoing failure’ to support patients is ‘starkly obvious’ to clinicians.

She said: ‘This Government has committed to tackling health inequalities and reducing massive gaps in healthy life expectancy between people living in richer and poorer areas.

‘If it’s serious about that ambition it must increase funding for general practice in poorer areas – and cannot continue to shy away from this issue as predecessors have done. 
 
‘The best way to make funding fairer is to replace Carr-Hill with a needs-based formula that adjusts for unmet need.

‘For example, many cancers are more common in people who experience socioeconomic deprivation. But there are fewer GPs and worse access to general practice in poorer areas. Improving early cancer diagnosis is key to improving survival, but is a tall order when access to general practice doesn’t match up with need.’
 
Dr Fisher added that there are other options to boost funding in poorer areas, such as targeted funding for staff and premises, but ultimately they ‘would be short-term workarounds’.

‘While Carr-Hill is the biggest driver of skewed funding, it is not the only one – for maximum impact the Government should reform the formula as part of a wider review of other GP funding streams, and the contracting model itself,’ she added.

The report also said that the challenge of reforming Carr-Hill ‘shouldn’t be underestimated’, but nor should it be ‘kicked further down the road’.

Professor Azeem Majeed, a GP and head of the primary care department at Imperial College London, told Pulse he agreed that implementing a new formula is ‘complex’ and requires ‘careful planning’ to avoid destabilising existing services.

He said: ‘Inequity in funding between general practices in poorer and more affluent areas of England contributes to fewer GPs, lower CQC ratings, and diminished patient satisfaction in deprived areas.

‘The Carr-Hill formula needs to be reviewed to ensure it is not leading to underfunding of primary care in areas with greater health needs.

‘An updated funding formula should aim to direct NHS resources to areas with higher health burdens, enabling general practices to reduce health inequalities.

‘It is also essential to increase the overall level of funding for general practice so that primary care receives a greater proportion of total NHS funding.

‘A new contract should also continue to contain some funding linked to quality of care but this should recognise the challenges of achieving quality targets in more deprived areas which typically have a higher proportion of ethnic minority groups and greater population mobility.’

Pulse has contacted the Department of Health and Social Care for comment.

In 2015, Pulse revealed that NHS England and the BMA were discussing plans for practices with ‘atypical’ populations to be given their own contracts under plans being discussed by GPC and NHS England as part of the latest review.

But changes to the formula had been under consideration since 2007 – just three years after it was introduced, partly because of concerns that practices with atypical populations, or those in deprived areas, do not receive sufficient funding to support them to treat their patient demographics.