The Carr-Hill formula is the method used to calculate Global Sum payments for essential and certain additional services within primary care. It replaced the previous Jarman Index, providing a more accurate and comprehensive system for distributing funding to practices. This formula ensures that payments are made based on the actual cost of delivering primary care services, accounting for the specific needs and demographics of the population served by each practice.
The Carr-Hill formula takes into account several important variables that reflect the needs and challenges faced by different populations. These include:
Patient Age and Sex
The formula recognizes that patients of different ages and sexes require different levels of care and, as such, adjusts payments accordingly. This adjustment follows a cost curve that reflects the healthcare needs associated with various age and gender groups.
Additional Needs of Patients
The formula incorporates data from the Health Survey for England (1998-2000) to adjust for patients’ health status. This includes accounting for long-standing illnesses and the standardised mortality ratio for patients under 65, which helps address the varying levels of healthcare needs across different patient groups.
List Turnover
Patients who are newly registered with a practice tend to require more consultations than those who have been with the practice for a longer period. As such, practices with higher list turnover are allocated additional funding to meet the increased demand for care during a patient’s first year of registration.
Staff Market Forces Factor
The geographical variation in staffing costs is taken into account through this factor. Practices located in areas where staffing costs are higher, due to local economic factors or market conditions, receive an adjustment to reflect these increased costs.
Rurality
Practices located in rural areas face unique challenges, including higher operating costs and lower population density. The Carr-Hill formula models the impact of rurality using data on GP expenses from HMRC, adjusted for factors like population density and geographical dispersion. This ensures that rural practices receive appropriate funding to compensate for these additional challenges.
Each adjustment within the Carr-Hill formula generates a separate practice index, allowing practices to compare their individual scores with the national average. Once all adjustments are applied, the resulting practice weighting reflects the unique needs and costs of each practice.
Global Sum payments are calculated on a quarterly basis. The Carr-Hill formula ensures that these payments are distributed equitably, enabling practices to provide high-quality care tailored to the specific needs of their patient populations.
By using a combination of demographic, health, and geographical data, the Carr-Hill formula aims to fairly distribute resources, ensuring that practices are supported in delivering effective and responsive primary care services.