GMs rurality - NHS Employers

Appendix 4 - Analytical solution to rurality adjustment of GMS. 69 ..... Section 3 describes the data used to implement the analytical framework set out in.
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Report to NHS Employers Adjusting the General Medical Services Allocation Formula for the unavoidable effects of geographically-dispersed populations on practice sizes and locations March 2006

Contents 1.

Introduction 1.1. Context of this work: Present Funding of General Medical Services 1.2. Objectives for the work described in this report 1.3. Scope of this report 1.4. Status of the material in this report 1.5. Structure of this report

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2.

Analytical framework adopted for this work 2.1. Examining what constitutes unavoidable costs 2.2. Defining criteria for assessing whether practices are “appropriately small”. 8 2.3. Analysis of the extent to which practice costs vary with size of Practice 2.4. Analysis of patient travel times an travel costs 2.5. An analytical model of the rurality adjustment 2.6. Exclusions from our analysis 2.7. Differences between the existing approach to allocating funds and the approach considered here

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3.

Data and Data Sources 3.1. GP Practice Cost Data 3.2. GP Practice Location Data 3.3. GP Practice Population Data 3.4. Matching Practice and locations data 3.5. Model Coverage 3.6. Geographical coverage

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4.

Modelling of economies of scale 4.1. Overview of the data with summary statistics and graphs 4.2. Variation in the data 4.3. Differences in average costs per patient with list size 4.3.1. Dispensing status 4.3.2. Potential magnitude of additional funding at small list sizes 4.4. Regression analysis 4.4.1. Single variable regression 4.4.2. Summary of results of single variable regression 4.4.3. Multivariate regression 4.5. Typical extra cost per patient 4.6. Comparison with the Carr-Hill analysis underlying the present formula 4.7. Conclusions 5.1. GIS Modelling Methodology 5.1.1. Travel Distances and Time 5.1.2. Travel Costs 5.2. Travel Distance Correlations

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5.3. 6.

Travel Distances and Costs

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Appropriately Small GP Practices 6.1. Unavoidable Travel Distances 6.2. Unavoidable Net Costs 6.3. The factors influencing net additional travel costs 6.4. Using distance to next nearest GP practice as a criterion for defining whether practices are appropriately small. 6.5. Prevalence of Unavoidably Small GP Practices 6.6. Conclusions

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7.

Unavoidable Cost Adjustment 7.1. Derivation of the Adjustment 7.2. Comparison with the Current Approach

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8.

Conclusions

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9.

Appendix 1 – List of Variables

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10.

Appendix 2 – Characteristics of GP Practices

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11.

Appendix 3 - Precedents on Access from competition authorities

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12.

Appendix 4 - Analytical solution to rurality adjustment of GMS

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GMS Funding Formula Rurality Adjustment

Executive Summary

NHS Employers commissioned Deloitte, working in collaboration with SDG, to carry out research to estimate the unavoidable effect of geographically dispersed populations on the sizes and locations of practices providing General Medical Services (GMS). This report describes the results of this research, which was relatively small scale, comprising approximately 11 manweeks of work. Terms of reference and approach The terms of reference for this research indicated that it is well established that there are diseconomies of scale for smaller practices. They required us to consider the extent to which such diseconomies of scale would lead to practices serving rural areas having unavoidably higher costs, and hence a requirement for increased funding, due to their smaller number of patients (i.e. smaller list sizes). The terms of referen