More funds needed for new formula

The revised GMS global sum may be fairer but problems will not be solved without more investment, says Nick Bostock

After 18 months of work, a shiny new version of the Carr-Hill formula for England and Wales at least sits on the negotiating table.

The original formula was developed to a very tight deadline, but this time the long gestation period should mean that there has been time to iron out any flaws. For example, it no longer requires an additional ‘off-formula’ payment to London practices.

The revised formula is based on more robust data. Better measures of workload have been devised by weighting for deprivation, consultation length and home visits. In short, the new formula looks like a fairer way of dividing available global sum funding between GP practices. Time to celebrate? Well, maybe not.

GPC leaders believe there is little chance that the DoH can be persuaded to invest more in global sums. As a result, they say there may be no point in adopting the new formula even if the profession backs it.

Global sum funding
The current global sum formula did not balance out previous inequalities in practices’ core pay. The level of funding per patient was so low that most practices had less income than they received under the Red Book. To address this, more than 90 per cent of GMS practices were given top-up payments, or correction factors under the MPIG.

Without extra money in the global sum, a revised formula would alter the size of correction factors practices need to maintain income levels. It could create upheaval, without impacting on fairness of funding distribution.

GPC negotiator Dr Andrew Dearden said: ‘The question is whether the DoH is prepared to invest more in global sums. If not then we should seriously consider leaving things as we are.

‘A new formula with no new money is only going to do harm. If we do accept a new global sum formula, we would need a cast-iron, legally binding agreement that the MPIG will be there for as long as we need it.’

Correction factors
The formula review document mentions the possibility of bringing in the new formula without recalculating correction factors.

Dr Dearden and other GPC members warned this would be ‘dangerous’ and could put some practices out of business.

He added that this would contravene part of the original GMS contract agreement, which said that practices’ core pay would be ratcheted up and never fall lower than the previous year.

Valerie Martin, medical director at specialist accountants PKF, said if correction factors were not recalculated, the biggest losers would be those who did best under Carr-Hill.

The review document states that practices will face up to 30 per cent cuts to their weighted list. Ms Martin said this would equate to around 30 per cent off total core pay, because these would be the practices that required little or no correction under the original formula.

The days of big new investment in the NHS are over, with health secretary Patricia Hewitt having promised to quit if she fails to balance the books by the end of this financial year.

NHS Employers’ core financial negotiator Philip Grant said that if GPC leaders wanted more core pay they would have to discuss diverting quality framework money.

‘GP practices earn £1 billion from the quality framework. If people make the argument that there is insufficient funding in the global sum, negotiators should consider if the balance with the quality framework is correct,’ he said.

But Dr Dearden disputed this: ‘This is typical DoH spin. We have been open that we wanted more money in the global sum and less in the framework, but the DoH insisted the majority of new money had to go to the framework.’

It had been hoped that the formula review might break the deadlock between NHS Employers and GPC negotiators that saw contract talks collapse. It may simply have brought deep divisions into sharper focus.

Global sums

March 2003
Black Wednesday pay calculator shows most practices lose out under new GMS.

April 2003
MPIG announced.

June 2003
GPs accept new contract.

December 2005
GMS frozen for 2006/7.

January 2007
Negotiations over revised contract collapse.

February 2007
Proposals for revised global sum published.

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