Make the Carr-Hill formula work

Looked at dispassionately, the Carr-Hill formula was actually a sensible attempt to reward practices according to their workload. In practice it failed miserably, being inequitable and unworkable. The government has only itself to blame: by developing the formula in secret, it threw away the chance of obtaining an accurate, practical version.

To be a credible alternative to old GMS, the Carr-Hill formula has to produce an average remuneration at least as big as the average remuneration of the system it is supposed to replace. As 90 per cent of GMS practices are now Carr-Hill losers, it is clear that the formula has been funded at too low a level.

Enter the minimum practice income guarantee (MPIG), which applied a correction factor floating above the global sum so Carr-Hill losers would never fall below their previous GMS income. We would not have approved the contract without it.

The government would dearly like to phase out the correction factor, because it is expensive. How could this be done? It's very tricky. Docking all global sum increases from the correction factor won't work.

It creates a huge perverse incentive to practice expansion. Doubtless other half-way houses will have been mooted, almost certainly complicated fudges, laden with bureaucratic booby-traps.

There is a better solution. It starts by making the Carr-Hill formula work properly, so it measures workload accurately and rewards it properly.

Then at least we will be moving towards an appropriate method of remuneration.

The formula needs refining, so that unexpected variations between similar practices are removed; it also needs adding to, because it has some notable omissions, chief of which is the absence of any weighting for those patients not speaking English.

Secondly, it must be published, as suggested by Professor Carr-Hill himself, so we can all understand how it works, peer review it, point out any inconsistencies or omissions, and be able to predict our own practice incomes. Thirdly, it must be funded properly, and the MPIG must remain.

A formula like this would reward practices properly according to their workload. But the question remains: can we move to a full Carr-Hill method of remuneration without disadvantaging large numbers of existing MPIG practices?

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