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The Carr-Hill formula is the formula that is applied to calculate the Global Sum payments for essential and some additional services. It replaced the Jarman index. This allows payments to be made based upon the cost of providing primary care services for a given population and their respective needs.

The formula takes account of the following variables

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.

Staff market forces factor
The geographical variation in staff costs.

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.

Each adjustment within the formula generates a separate practice index which allows one to compare the practice score with an adjustment to the national average. Once all of these indices have been applied, this creates a practice weighting.  

Global sum payments are calculated quarterly.