NHS England deputy chief executive Matthew Swindells told the National Association of Primary Care (NAPC) conference in Birmingham that a GP funding system based on accurate data on individual patients 'has to be the direction of travel'.
The comments came less than 24 hours before health and social care secretary Matt Hancock told the conference that the GP funding model would have to change to accommodate emerging models of care based on new technology, such as GP at Hand.
Mr Swindells spoke in response to a GP in the audience, who warned that the 'current funding system for primary care actually penalises practices that attract complex patients' - and said Babylon's GP at Hand service was an extreme example of the impact this could have.
Mr Swindells said: 'You're right. The way the allocation formula works now, which is based on a postcode on a large geography, makes it very difficult to sub-segment down to GP level. We have tried a couple of times to do allocations at a patient level and have struggled because we don't have the data.'
'I think that is going to be the direction of travel, but we need to have a better description of the patients who are on a list. Yes, we need to travel in that direction. We are looking round the world for how to do that and we have a real challenge as we manage the move we are seeing in primary care to make sure we can achieve that.'
The current GP funding system - the Carr-Hill formula introduced in 2004 - pays GP practices based on their list size, with an adjustment to reflect the age and sex of patients and factors including rurality, list turnover, regional variation in staff costs and patients' additional needs.
The GP audience member highlighted a US-developed system currently used in Sweden to allocate primary care funding. The model allocates each patient to a specific clinical group that determines the level of funding they should attract for a provider, by taking into account their individual characteristics and morbidity.
This type of 'risk system' could ensure that GP practices 'that have taken the most complex patients actually get the resources they need for them naturally', the GP said. In Sweden, allocating primary care funding on this basis has led to an increase in GP practices being established in the most deprived populations, he added.
NHS England set out proposals earlier this year that could slash payments to 'digital-first' providers such as GP at Hand by almost 20%. But a move to funding allocation based more closely on individual patients could help ease concerns about tech-driven services 'cherry picking' younger patients - and denying traditional practices a source of income that subsidises care of older patients.
Mr Hancock also told the conference on Thursday that the balance of NHS funding would tip in favour of general practice as the extra £20bn coming into the NHS budget over the next five years kicked in.
Mr Swindells said a shift in the approach to how care is delivered - with more care outside of hospitals - was key to maximising the impact of the extra £20bn.
Growth of 3.4% a year was 'not a bonanza', he warned. He asked: 'Will the traditional way of caring continue and eat all that money, or are we going to shift - are we going to say that the real challenge for the NHS is 30,000 people lying in hospital who could be cared for at home?'
The NHS England deputy chief executive told GPs: 'How the cake gets split up will to an extent be decided by your engagement with STPs and integrated care systems (ICSs). We have driven over the last few years an increase in the proportion of money going into primary care. We are currently in the battle to make sure that that continued increase in the proportion goes on - my expectation is that it will.'
NAPC chair Dr Nav Chana also backed a 'data-driven approach to segmenting populations'. 'Once you start understanding how much patients cost, you can have a conversation about where the money is best spent.' This was a 'sweet spot that can be leveraged for big change', he told the conference.