Spending on primary care paltry, but some states ramping up

Spending on primary care paltry, but some states ramping up

Dive Brief:

  • Increasing spending on primary care lowers emergency department visits and hospitalizations, according to the Patient Centered Primary Care Collaborative’s 2019 Evidence Report.
  • The report from the advocacy group made up of health plans, doctors, nurses and other stakeholders, looked at states’ primary care spending patterns across payer types and correlated patient outcomes. Primary care was defined in two ways: narrow, relating to just primary care physicians in offices and outpatient settings, and broad, relating to primary care physicians and other members of the clinical team, including nurses, physician assistants and behavioral health professionals.
  • The national average of primary care spend across both public and private payers between 2011 and 2016 was only 5.6% using the narrow definition, and 10.2% using the broad definition. By comparison, 38% of U.S. healthcare dollars went to hospital care alone.

Dive Insight:

Investing in preventive primary care is correlated with better health outcomes and lower costs across the board by staving off expensive hospitalizations. However, primary care doesn’t receive the lion’s share of healthcare funds — the U.S. spends an average of 5% to 7% on everyday care as a percentage of total healthcare spend compared to other developed countries, which averages 14%.

A number of states have introduced bills, signed legislation or taken other concrete steps to measure and report on primary care spend. The push is increasing in momentum, according to the report — seven of the 10 states they analyzed initiated their efforts in 2019, including West Virginia passing a law assisting community-based primary care services and Maine requiring payers to report primary care expenditures to the state Health Data Organization.

Initiatives included setting up some sort of multi-stakeholder collaboration to define and measure primary care spend or setting community goals for what they want to achieve. In some cases, they’ve set targets for increasing the dollars flowing into primary care in the future.

“This activity suggests that there is some momentum at the state level to shift the U.S. delivery system back to its primary care foundation to achieve better patient outcomes, fewer inequities, and lower costs,” Ann Greiner, CEO of PCPCC said.

The government has tried to help this momentum along as well, with CMS’ innovation center introducing a slew of primary care payment models designed to get practices to heightening their quality of care and lower costs (some with mixed results).

One program, called the Primary Cares Initiative, was introduced in April and won endorsements and praise from hospitals, doctors and even Haven head Atul Gawande. However, the model is fully voluntary and includes significant downside risk, which could keep providers from jumping onboard.

Some blame part of the problem on the flatlining number of primary care physicians, due in part to low salaries compared to other medical fields.

The need for primary care physicians is particularly acute in rural, underserved areas. Healthcare giant UnitedHealth Group found 13% of Americans live in an area with a primary care shortage, and the Association of American Medical Colleges expects a primary care shortfall of between 14,800 and 49,000 by 2030.

Some traditional and nontraditional companies are taking up the cause. Walgreens partnered with provider group VillageMD in April to open primary care clinics in the Houston area and Blue Cross Blue Shield of Texas and healthcare company Sanitas USA plan to open 10 primary care medical centers in Dallas and Houston for select patients. The region is plagued by pervasive disparities in health outcomes and care access.

Additionally, analysts are keeping a close eye on CVS Health’s HealthHUB stores. Alhough they don’t offer the full gamut of primary care services yet, they devote a fifth of the stores to health services with a focus on preventive care. They are the pharmacy giant’s foot-in-the-door to potentially becoming a true provider down the road.

PCPCC found significant variability in primary care usage between states. Minnesota had the highest percentage of primary care investment across both the narrow (7.6%) and broad definitions (14%) and showed strong patient outcomes. In contrast, Connecticut had the lowest spend using the narrow definition (3.5%), while New Jersey had the lowest using the broad (8.2%).

The inverse association between primary care investment and negative health outcomes parallels existing research, according to Yalda Jabbarpour, medical director at the Robert Graham Center. But “we cannot determine causality or directionality of this association,” she cautioned.

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