Global sum allocation formula

We remind GP practices how funding for GMS practices is calculated using the Carr-Hill formula, and what is taken into account.
Location: England
Audience: GPs Practice managers
Updated: Thursday 16 January 2020
GP practice article illustration

By 2020 the core funding of all GMS practices will be paid based on the global sum allocation formula, or Carr-Hill formula. The minimum practice income guarantee (MPIG), that was previously used as the basis of core funding, has been phased out

PMS practices are also moving towards this model of funding.

The guidance reminds practices how global sum payments are calculated and explains why the formula is currently being reviewed by NHS England.

 

How the global sum allocation formula is calculated

The formula ensures resources are directed to practices based on an estimate of their patient workload. It takes into account many factors under two groups 'drivers of workload' and 'unavoidable costs'. These are broken down below.

Drivers of workload Description
Patient age and sex Patients of different ages and sexes attract a different level of payment under the Carr-Hill formula based on a cost curve.
Additional needs of patients Using health survey for England 1998-2000 data, the formula takes into account standardised limited long-standing illness and the standardised mortality ratio for patients under 65.
List turnover Patients in their first year of registration in a practice tend to have more consultations than others, so require extra funding.
Unavoidable costs Description
Staff market forces factor The geographical variation in staff costs.
Rurality The impact of rurality was modelled using HMRC information on GP expenses aggregated to practice level. The impact of population density and dispersion was modelled against GP expenses, controlling for other factors.

How the formula is applied

Each adjustment within the formula generates a separate practice index, comparing the practice score on the adjustment to the national average. The indices are then applied to the practice list to produce a practice weighted population. This is calculated quarterly.