General Practitioners: Finance

The Carr-Hill formula determines how global sum funding is distributed among practices. The global sum is a capitated payment, calculated based on the size of a practice’s registered list of patients. It accounts for 50% to 60% of general practice funding and is allocated through the core contract.

It is a workload-based formula, introduced in 2004, that is designed to ensure that practices are reimbursed for their expected workload. Practices are paid more if their registered patients are expected to use services more, based on past usage patterns of patients with similar characteristics. It takes into account the following factors, whose weight is calculated via an assessment of historical activity rather than need:

• the sex and age of patients;
• the additional needs of patients relating to morbidity and mortality, calculated using the Standardised Limited Long-Standing Illness and the Standardised Mortality Ratio for those aged under 65 years old;
• patient list turnover, to account for the fact that patients in their first year of registration in a practice tend to have more consultations than other patients; and
• unavoidable costs based on geographical area, specifically the additional costs of delivering services in a rural area, and in areas where staff costs are higher.