How the GMS pay revolution works

The news that MPIG is finally on its way out obscured the fact that some practices may see greater income shifts from the demise of prevalence protection. By Prisca Middlemiss and Nick Bostock.

Two key changes agreed between the GPC and NHS Employers will create huge winners and losers. From 2009/10, the square rooting mechanism used to damp prevalence weighting on quality frame- work pay will be removed.

From the following year, practices with low prevalence will no longer be ‘rounded up' to the 5 per cent mark in the national range of practice disease prevalence - the value of quality points will be weighted according to true prevalence.

Low prevalence losers
As a result, the GPC admits that a handful of practices will lose six-figure sums, while others will gain a similar amount.

Some of the losers, the GPC believes, may require financial support to stay afloat. This might sound like MPIG by another name, but far fewer practices will need this than currently receive correction factors.

Among those that could need help are university practices - classically low prevalence - who could receive extra funding for non-standard services tailored to their populations.

Whether this extra help materialises could be of vital importance. Dr John Lethem, a GP at York University and president elect of the British Association of Health Services in Higher Education, warned that otherwise ‘it may be financially impossible for practices to provide health services to students'.

The support these practices have received from prevalence weighting will disappear.

The majority of practices will lose or gain only a few thousand pounds on a turnover of £500,000, GPC Wales chairman Dr David Bailey said. But there will be large-scale winners, too.

‘The loss of square rooting will benefit practices with higher prevalence who were damped by the formula,' explained Jon Ford, head of the BMA's health policy unit.

‘The impact of the 5 per cent loss in 2010 will be more dramatic. Some real outliers will benefit from this.'

This will be the case in disease domains such as mental health, where prevalence is generally very low, but a handful of practices have extremely high prevalence, meaning that the adjusted national average prevalence that pay is weighted against is artificially inflated.

Impact of pay rises
But the impact of the MPIG component of the deal will also be significant.

Under the formula the negotiators have devised for distributing any pay rise recommended by the Doctors' and Dentists' Review Body (DDRB), a hypothetical 2 per cent uplift would generate a 2.13 per cent uplift to all practices' global sums.

For non-MPIG practices, this money is received in full. For those on MPIG, there is a caveat. If the value of your global sum plus a 2.13 per cent uplift is worth more than your global sum equivalent - global sum plus correction factor - plus a 0.61 per cent uplift, you keep whatever the new total is, and join the ranks of non-MPIG practices.

If your global sum equivalent uplift is greater, then you receive that, but your correction factor is cut down as a proportion of the pay you receive.

So far, so simple. But, whatever comes off correction factors in this process goes back into a pot of core funding, and is redistributed again via the same process - the ‘iterative' process detailed in documents put out by the negotiators. This is repeated through about 40 iterations, with more practices coming off MPIG in each round, until all the money has been redistributed.

Practices that start with no MPIG will benefit most, receiving multiple maximum shares of the redistribution. Other practices will benefit less - the earlier in the process a practice comes off MPIG, the more it will benefit.

The deal is binding for one year only, and will be revisited. This gives the BMA the chance to better characterise an MPIG-dependent practice before it agrees to further steps to phase out the correction factor fully.

Further steps will be vital. Despite DoH claims that the MPIG will be gone in five years, this is unlikely under the current deal without pay rises worth far more than 2 per cent annually.

This is largely because correction factors account on average for 20 per cent of practice income, but some practices receive 40 per cent or more.

Getting rid of MPIG will restore incentives to take on new patients, but redistribution of pay is not something GPs are taking lightly.

Dr Grant Ingrams' 3,000-patient, two-doctor practice in Coventry is likely to be among the major winners. Last year its correction factor was a half of 1 per cent, and the practice has high disease prevalence.

‘I won't be happy if my practice getting more funding leads to another practice going bankrupt,' Dr Ingrams said.

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