Health Systems Allocate Just 5-10% of Total Spending on Primary Care, Despite Benefits

Health systems in the United States continue to underinvest in primary care, despite evidence that increased primary care spend can lead to lower emergency room and hospitalization costs, according to a new study.

The first-of-its-kind analysis from the Patient-Centered Primary Care Collaborative examined the amount of money private and public payers are spending on primary care in 29 states–reflecting growing interest on the part of state lawmakers to measure and report this type of spending in an effort to keep health costs down.


Whereas health systems in other industrialized nations invest an average of 14 percent of total spending on primary care, in the United States that number is just 5.6-10.2 percent, depending on whether one uses a narrow or broad definition. The report suggests that underinvestment “is related to the U.S. payment system, which is still largely focused on fee-for-service (FFS) payment.”

The study also found that as primary care investment went up, emergency room visits, total hospitalizations, and hospitalizations for ambulatory care-sensitive conditions went down. While the authors were not able to infer direct causality, they note that other research has produced similar findings.

With state policymakers paying more attention to primary care spend–establishing mechanisms to track investment as well as outcomes, and setting new goals and targets–the report’s findings could provide fodder for future state-level legislative or regulatory efforts.


Recent analyses align with the PCPCC report. Research published in April found that primary care accounts for just  2.12 to 4.88 percent of total medical and prescription spending in Medicare Parts A, B and D.

Another study from earlier this year showed that Americans with primary care received significantly more high-value healthcare and reported better patient experience and overall healthcare access, compared to those without.


“There is strong evidence that primary care is associated with the outcomes policymakers and patients seek, but such care has been chronically underfunded in the United States,” the report reads. “Given the growing number of states that have recently introduced bills, enacted legislation or issued executive orders to measure primary care spend with the goal of increasing such investment, the findings in this report–both analytic and descriptive–are timely and relevant.”


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