Which practices are receiving the highest level of income and which are losing out? PI analyses latest general practice payments for 2020/2021
Pulse Intelligence’s analysis has revealed that total funding has increased across the board.
This might have been expected – the 2021/22 GP contract agreement included a 4% increase in the Global Sum.
But analysis on the 2019/20 figures last year had revealed that – once funding for premises, dispensing fees and reimbursement for locum fees had been removed – funding given to GP practices actually went down. There were two reasons for this: first, the increase in global sum for that year was offset by reductions in the minimum practice income guarantee (MPIG) and seniority pay; and second, more of the overall funding was funnelled towards primary care networks (PCNs).
This funnelling of money to primary care networks is going to continue (and Pulse Intelligence will have more analysis on that in future). But it doesn’t seem to have affected practice income this time round.
Not surprisingly, seniority payments have decreased as they have been phased out, and extended hours access funding was moved to PCNs part way through the year.
QOF was the same as last year, having been income protected (give or take a penny – which could be explained by issues around under and overspends from previous years).
However, this is certainly not all good news for GP practices. Andrew Pow, board member, Association of Independent Specialist Medical Accountants and healthcare partner at Mazars, said: ‘The increase in income was reflective of the overall increase in funding negotiated by the BMA. The figures in this analysis represent a 3.3% increase, but inflation is now running at 4% and some costs have increased so this does not directly translate into profits. For example, pay rates for salaried GPs increased by 2.8%.
‘Practice level funding is likely to stagnate if not reversed, which will be challenging.
‘There is also an element of PCN “mission” creep with commissioners increasingly funding PCNs to carry out services rather than practices,’ Mr Pow added. ‘There is a risk that funding currently sitting with practices will move to PCNs. This is likely to accelerate under ICSs.’
The most notable finding was that practices who had been reliant on MPIG funding in England are receiving significantly less funding than those who weren’t.The Government has been phasing out MPIG funding since 2014, but its rationale was that this would lead to fair funding.
Our analysis reveals, however, that practices that received MPIG funding in 2015 received on average around £8 less per patient in 2020-21 than those that didn’t.
They received £4 less per patient through the Global Sum, and less in CCG discretionary funding such as GP Forward View payments and local enhanced services.
The MPIG was introduced as part of the 2004 contract to ensure that practices that were disadvantaged through the introduction of a new funding formula would not miss out on funding.
The Carr Hill formula, which is still in use, adjusts the global sum based on certain characteristics of a practice’s patient demographics, most notably age. But many practices in deprived areas receive lower amounts of funding under the Carr Hill formula because patients tend to be younger, but also tend to need high levels of healthcare. The MPIG was designed to address this anomaly.
The Government announced that it was phasing out the MPIG over seven years from 2014. But at the time of the announcement, it indicated that it would look at reforming the funding formula.
Dr Naureen Bhatti, a GP in east London who has campaigned against the removal of MPIG, said: ‘What makes me furious is that nothing has been done to look at deprivation. MPIG was removed with the understanding that a fairer funding formula would be brought in, and we would have the chance through LESs to earn more. But the figures show this is not happening.
‘We are even worse off than we were seven years ago. This is shocking. Particularly in the light of the events of the last 18 months, which have highlighted health and wider inequalities by the disproportionate impact of Covid on those already disadvantaged or discriminated against.’
Dr Kaye Ward, a GP partner in the Hawkshead practice in Cumbria, which has been campaigning on MPIG since 2015, said: ‘Eventually, locally we did get some support through some additional local aytpical funding. Unfortunately, we have been informed by our CCG that they have decided to stop that as of 31 March 2022. This is despite assurances previously that support would continue to make us sustainable.
‘We are now faced with rising demand as all practices have, but with a sizeable drop in funding from next April. It feels like Groundhog Day again but even worse than 2015.
‘Practices who had sizeable MPIGs had them for a reason – but that seems long forgotten in the commissioning world.’
Mr Pow said: ‘The withdrawal of MPIG has not been good for many practices. It counterbalanced low funding delivered via the Carr Hill formula and removing it has widened the gap in funding which is why many with a low Carr Hill factor now struggle.’
As has been the case in previous years, APMS practices earn far more than PMS and GMS practices, and PMS practices are still earning more than GMS.
However, the gap is narrowing. In 2018/2019, there was a £41 gap between APMS practices and GMS – APMS practices received £167 per patient in 2018/19. Latest figures reveal the gap to be £18.24.
The gap is also narrowing between GMS and PMS practices. PMS practices now receive £4.60 per patient extra – in 2018/19, this figure was £6.20.
Mr Pow says: ‘The gap between PMS and GMS is narrowing and this is being accelerated in advance of Integrated Care Systems coming into play. CCGs were advised to align GMS with PMS contracts a few years back and in many areas this has happened. The areas that didn’t take action are now actively trying to move PMS practices to a GMS style funding stream.
‘Practices with APMS contracts do earn more but often these are failed practices where funding levels had dropped to a level where they were not sustainable. To attract provider organisations to take over the contracts, commissioners had to offer sustainable funding, often via transitional funds. If this money had been available in the first instance then it’s likely that APMS contracts wouldn’t have been needed.
‘APMS contracts are also short-dated contracts and therefore need to build in funding to offset the cost risk at the end of the contract – for example, as with staff redundancy.’
Dr Michelle Drage, CEO of Londonwide LMCs, said: ‘APMS contracts cost 14% more than GMS, yet the large providers who take them on operate on a profit/loss model, handing contracts back to NHS England after a short period of time when the contract becomes too challenging, which is bad for patients’ continuity of care and bad for GPs and staff. Our patients deserve better.’
As was the case in 2019, the smaller the practice, the more funding they receive. At the time of that analysis, the then BMA GP Committee chair Dr Richard Vautrey said: ‘Smaller practices tend to be ones that have longstanding histories within local communities.
‘In urban areas they are likely to be in harder-to-recruit places, where practices continue due to the dedication of GPs. But they may also be in rural areas where the demographics have not favoured larger practices, due to the population size. So, both of those may change the type of patients they look after and resulting funding adjustments.’
Mr Pow agrees. He says: ‘It is probably simply a function of where the practices are located and the influence of their local Carr Hill factors.’
Rural practices are continuing to receive more income, and the gap of £10.50 per patient is a little bigger than the £8 per patient in 2018/19. This does not include dispensing fees, which would make the disparities greater.
Again, at the time, Dr Robert Lambourn, a GP in Northumberland and chair of the RCGP rural forum, said: ‘The distance patients live from the surgery and lower population density are incorporated into the Carr Hill formula’s rurality factor. This uplift in funding reflects the fact that home visits take longer and there may be more of them, as well as travel time ‑ either by car or scanty bus services in rural areas – for patients.’
Dr Lambourn pointed out that rural populations tend to be older, with younger people migrating out and older people moving in. In these patients, the prevalence of long-term conditions, such as diabetes, hypertension and stroke, is often higher, with more comorbidities.
Mr Pow said: ‘Rural practices generally receive more funding per patient but for good reason. They are smaller and therefore proportionally per patient have a higher fixed cost to cover. They also cover wider geographical areas and patients do not have access to other local services available in urban areas, for example walk-in centres and A&E departments.
‘Consequently, they provide different services such as minor injury work but will have related costs that are higher than in urban areas.’
Methodology
The raw data were from NHS Digital’s publication, NHS Payments to General Practice 2020/21. We included network DES participation fees, but no other network level PCN funding (including Covid vaccination payments). To give meaningful comparisons, we removed practices with ‘atypical characteristics’, as defined by NHS Digital, and practices with fewer than 1,000 patients. We removed funding for premises, dispensing costs, and reimbursement of drugs, locum fees and Covid support fees. All calculations were on a per-registered patient basis. We identified all those that received MPIG payments in the Payments to General Practice 2014/15 publication, then applied those practice codes to the most recent publication to identify ‘MPIG practices’.
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