FAQs: Global sum formula review


14 / 7 / 2010 3.01pm

What is the global sum formula?

The General Medical Services global sum formula distributes the core funding, called the global sum, to general practices.  Payments are made to general practices according to the needs of their patients and the costs of providing primary care services.

Why did you consult on the Formula Review Group (FRG) report?

The FRG - which includes NHS Employers and the General Practitioners Committee - wanted the views from stakeholders to inform discussions about the future development of the formula.

What did you consult on?

We asked for people’s views on six broad areas on whether we should implement a new formula and how this might be done.

Who did you consult with?

We invited all the key stakeholders to respond to the consultation including GP practices, professional groups like the Local Medical Committees, patient groups and primary care organisations, via an on-line response form.  The PCT Network (part of the NHS Confederation) that represents primary care organisations, and the Royal College of General Practitioners, also responded.

How long was the consultation?

The consultation ran from 9 February to 11 May 2007.

Is there any new funding to invest in the formula?

This would form part of the discussions with the Departments of Health. 

Why did you do the review?

We always said that we would review the formula at this stage, as part of the agreement for the new GMS contract when it was first introduced in 2004.

Did the review consider the Minimum Practice Income Guarantee (MPIG)?

The review did not consider MPIG, that includes the correction factor payment, which was introduced to support those practices moving from the old to the new contract.  The MPIG needs to be considered separately.

However in 2006/07, GMS negotiators agreed that “future uplifts to the global sum should seek to reduce the reliance upon correction factor payments”.  This means that while MPIG was not changed in 2006/07, correction factor payments have become a form of transitional support.

What does the consultation tell us?

In general the consultation responses welcomed the work of the FRG.  The two main issues raised by the consultation responses were:

the need for transparency and equity of resource distribution
the need for practice stability during any changes to the formula.

Is the current formula fair?

The work of the FRG shows that the current formula (known as the Carr-Hill formula) is more robust than previously thought.  Whilst the formula still works reasonably well, there are certain parts of it that could be improved through the use of additional and more up-to-date data.

What is unfair is that the Minimum Practice Income Guarantee (MPIG) acts as a barrier to the fair distribution of practice resources.  Under this arrangement, 50 per cent of practices (many of which are currently be on MPIG) receive less than their fair share of the overall funding because of the support that is being given to other practices.

What happened next?

NHS Employers and the GPC collated and summarised all of the responses in the report.  It is for the relevant health departments to consider how, when, or if at all, they wish to see the recommendations of the FRG taken forward.  It will be for the health departments, GPC and NHS Employers to discuss any changes to the formula.

How can you ensure that practices are not destabilised if a new formula is introduced?

Any discussion about changes to the formula would cover the impact of implementation, including factors which may impact on practices and jeopardising continuity of patient care. There are a number of ways negotiators could ensure stability during implementation, for example being able to manage the transition over a period of time, alongside increases in other elements of the contract, as well as considering practices’ opportunities to earn additional income from other service developments and initiatives to offset potential reductions.

Any solution would clearly be dependent on successful negotiations between NHS Employers and the GPC. 

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