Primary Care Shortages Worsen As U.S. Spending On It Drops

Primary care has been shown to improve health outcomes and population health; reduce health disparities; and save money. Despite these benefits, however, accessing primary care has become more difficult.

“In 2025, there were 7,901 primary care health professional shortage areas,” according to a new report from the Health Care Cost Institute. “A recent report found that primary care physicians per capita declined between 2012 and 2021, and fewer trainees chose to pursue primary care than specialty care over the same period.”

In response, a number of states are innovating to increase investment in primary care. By one estimate, nearly 20 states have taken action through initiatives ranging from defining and measuring primary care to setting specific spending targets.

Among the key findings in the report:

Approximately 4% of health spending went to primary care in 2022. Nationally, among people with employer-sponsored insurance, primary care made up 4.4% of total medical and prescription spending in 2022. Spending in Medicare fee for service was lower at 3.9% of total spending. The data reveal a wide variation among states. In 2022, among people with employer-sponsored insurance, the share of primary care spending ranged from 1.5% in Alaska to 6.5% in Vermont. Among the Medicare fee-for-service population, the share of primary care ranged from 2.7% in New York to 7.2% in Nebraska.

  • Spending is higher in rural areas. Rural areas saw a greater share of primary care spending than their urban counterparts. In 2022, among people with employer-sponsored insurance in rural areas, primary care spending made up 4.6% of total spending compared to 4.4% in urban areas. Medicare fee for service had a similar pattern, but the difference was much starker. In 2022, among people with Medicare fee for service who live in rural areas, 6.7% of spending went toward primary care, compared to 3.4% in urban areas.
  • The declining shares of primary care spending highlights the need for strategic investment. Shares of total medical and prescription spending on services provided by primary care physicians between 2018 and 2022 were consistently lower than in other developed countries. During this same period, the shares of spending have decreased at both the national and state levels.

“As policymakers pursue investments in primary care, studies have found that areas with higher primary care physician supplies were associated with better population health outcomes,” the report concluded. “Declining proportions of primary care spending in both the employer-sponsored insurance and Medicare fee-for-service populations highlight the need for a robust national and state strategy on increasing primary care investment and provider supply.”

 

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