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Investment in primary care spending should be increased to meet demand

One factor contributing to the decline in primary care investment may be a demand-driven decline due to rising deductibles and cost sharing.

Jeff Lagasse, Associate Editor

Spending and investment in primary care in the U.S. is low and trending lower in many regions, which is distressing for the industry given the ever clearer link between primary care spending, improved care outcomes and a lower spend.

This is the broad finding of a new report by the Primary Care Collaborative, an organization that advances primary care. Its lead author, Dr. Darilyn Moyer, executive vice president and CEO of the American College of Physicians and an adjunct clinical professor of medicine at the Lewis Katz School of Medicine at Temple University, discussed the possible causes and implications of this trend during a session at the Primary Care Investment 2.0 State Innovation Workshop on Wednesday.


Using other countries as a basis of comparison, Moyer and her colleagues found that health systems with stronger primary care investment operate in a more cost effective and efficient manner, which holds true across not only disparate countries, but various states across the U.S. as well.

With primary care spending in the U.S so low – about 5% of the overall healthcare spend – there are few places to go but up, she said.

"It's not an outlier finding," said Moyer, citing other reports. "There are large variations across states, and these variations have consequences. This association between higher primary care spending and lower rates of utilization across three outcome measures holds. We find lower emergency department visits in states with higher primary care spending, and lower hospitalizations."

While it's hard to pinpoint a single factor contributing to the decline in primary care investment in the U.S., one factor may be a demand-driven decline due to rising deductibles and cost sharing. Encouragingly, from 2019 to 2020, increases in primary care spending outpaced other increases, and about 20 states to date have strengthened their investments.

While primary care utilization rose slightly when the Affordable Care Act's Medicaid expansions occurred in 2014, overall primary care utilization trends are flat or even negative in commercially insured populations. According to Moyer, the report showed large gaps across racial and ethnic groups in reporting a usual source of care.

"These gaps, clearly to us, seem to be playing a role in the disproportionate impact of the pandemic certain populations are experiencing with COVID-19," said Moyer. "The lack of having attachment to primary care is in all likelihood one of the factors in seeing the terrible burden these populations are shouldering with this virus."

Broadly, the primary care workforce has kept up with population growth, but there are still shortages in rural areas relative to urban centers, though in some areas that gap does appear to be closing slightly.

Moyer said the movement toward PPO coverage, combined with declining HMO enrollment rates and rising deductibles, are contributing to an overall lack of orientation toward primary care.

"That is coinciding with these flat to declining indicators of primary care we're finding," she said. "Consumers in high deductible plans appear to not be able to distinguish between high- and low-value care services, and don't have the opportunity to have alternative, lower-cost sources of care."

In a positive trend, more states each year measure primary care spending as a key measure of health system transformation and value. To wit, the governors of Pennsylvania and Connecticut recently signed executive orders committing to an investment in primary care as a component of measuring the total cost of care in their respective states.

Dr. Howard Haft, executive director of the Maryland Primary Care Program, said the current trajectory of primary care needs to be altered to meet demand.

"There have been increasing demands and decreasing resources," said Haft. "It's very inadequate to meet the demands. Other nations have figured this out in a much better way, and that's how we feel at the primary care level – there's got to be a better way.

"This brings into clear focus the importance of policy," he said. "We know the tectonic plates are moving under the earth, and there'll be an earthquake at some point, yet we can't really predict when they're going to happen. Well, this is a natural disaster that's looming. People will see the collapse of primary care unless we do something, and we have it within our power."

Kate Goodrich, senior vice president of Humana, said the U.S. has an opportunity to learn from other countries. While it's clear that primary care investment is currently inadequate, finding the right level may be challenging.

"We know the relationship to utilization," said Goodrich. "Understanding what you're trying to achieve with investment in primary care, and the degree to which you can get some precision around that, can help inform what our investors should focus on. Comparisons are hard, because our systems are so different, but I really want to be sure we have alignment and understanding around what we're trying to achieve and what the outcomes are."


The Centers for Medicare and Medicaid Services put more focus on primary care in its physician fee schedule final rule that increases payments to physicians of primary care and chronic disease management. Common office visit increases and other final rule payments go into effect on January 1, 2021.

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