How funding for GMS practices is calculated

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

This 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’.

Here’s the break down by drivers of workload

• 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.

Here’s the break down by unavoidable costs

• 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.