Primary Care Spending Declining Despite Well-Known Health Benefits

Primary care’s already low share of national healthcare spending is getting smaller, according to a new analysis of tens of billions of private healthcare claims.

The analysis conducted by the Primary Care Collaborative (PCC) found that primary care spending across commercial payers decreased to just 4.67 percent in 2019 from 4.88 percent of national healthcare spending in 2017.

Primary care spending even declined when researchers broadened the definition of primary care services to include more clinicians (i.e., nursing practitioners, physician assistants, geriatricians, adolescent medicine specialists, and gynecologists).

Under the broader definition, primary care spending as a percentage of national health expenditures decreased to 7.69 percent in 2019 from 7.8 percent in 2017.

Additionally, spending on primary care declined in most states – 39 states using the narrow definition and 30 states using a broader definition – during the period although spending significantly varied by location.

The findings from the analysis indicate that primary care, which is meant to act as healthcare’s “front door,” is not getting the investment and resources it deserves compared to primary care’s associated influence on population health outcomes and value of healthcare services, especially during a pandemic, researchers said.

“This report is a three-alarm fire,” Ann Greiner, PCC’s president and CEO, shared in a press release. “The primary care platform was shrinking—and then the pandemic hit. Primary care practices were slammed financially and did their best to respond to patients’ needs, but they have been hamstrung. Patients, particularly those in vulnerable and marginalized communities, are the collateral damage.”

Surveys conducted by PCC and the Larry A. Green Center during the ongoing COVID-19 pandemic have found that primary care practices continue to face declining revenues, which has led to widespread reductions in workforce and even practice closures.

Primary care clinicians are also reporting increasing health problems among their patients, including rising mental health concerns and higher levels of housing and food insecurity.

Greater investment in the primary care platform can help clinicians address these challenges and more, according to researchers at PPC.

The analysis linked primary care spending with the utilization of costlier services, including emergency department visits, hospitalizations, and preventable hospitalizations.

States that spent more on primary care had fewer of the high-cost services. And this finding is consistent with a growing body of evidence connecting greater primary care orientation as measured by spending, utilization, and workforce with better population health outcomes, health equity, and more efficient use of resources, researchers reported.

However, as a whole, spending on primary care services is relatively low compared to other countries even though there is no agreed-upon share of national spending primary care should hit.

“This study and others have shown that, unfortunately, the US is moving away from primary care, despite the evidence that it is associated with better value, including enhanced population health, greater equity, and more efficient use of healthcare resources,” said Darilyn Moyer, MD, FACP, FRCP, FIDSA, chair of the PCC’s board of directors and executive vice president and CEO of the American College of Physicians.

To turn the tide on primary care investment, PCC advised states to consider value-based payment models to enhance their efforts to address health disparities in the spotlight because of COVID-19.

Primary care practices participated in value-based payment models and who are experienced with the patient-centered medical home model have fared better financially during the pandemic compared to practices relying more on fee-for-service revenue, according to case studies from the Commonwealth Fund.

“States that commit to addressing health disparities laid bare by COVID-19 can invest more in primary care, particularly through value-based payment models, to enhance the health of their populations,” PCC stated in the analysis.

Higher primary care investment may also lead to other benefits including controlling overall healthcare expenditures and freeing up funding for schools and roads.

 “Such investment would also strengthen the resiliency of state healthcare delivery systems to better manage other public health emergencies,” according to the report.

Researchers also recommended that state and federal policymakers encourage health plan benefit designs that promote access to affordable primary care services.

“The trend of high and rising deductibles in both Affordable Care Act marketplace and employer-sponsored coverage may help explain the decline of primary care spending and utilization observed in commercial claims data sources and across different study designs,” researchers explained.

“More research is needed on the association between insurance-plan design and primary care spending and utilization,” they wrote.