Primary Care Spending Results Deserve a Closer Look and Employers Are Making a Difference

It is fitting that our All-Alliance Meeting later this month focuses on primary care. We have long believed that primary care prevents more serious health issues down the line and is the best place to focus our resources, but with some recent findings, we have some support to back it up.

The Patient-Centered Primary Care Collaborative did a state-by-state breakdown, looking at each state’s primary care investment. It is the first attempt at calculating state-level primary care spending by all payer types, private, public, and uninsured. In addition, it looked at primary care spending and utilization such as emergency room visits, ambulatory care-sensitive hospitalizations, and total hospitalizations. Since there is not a uniform definition of primary care yet, the study used two approaches, characterized as a “narrow” and a “broad” definition.

The narrow definition includes certain types of care delivered by physicians identified by the Medical Expenditure Panel Survey (MEPS) as practicing family medicine, general practice, geriatrics, general internal medicine, and general pediatrics. The broad definition, based on the approach used in Oregon, includes nurses and nurse practitioners, physician assistants, OB/GYNs, general psychiatrists, psychologists, and social workers. The health care expenditures examined includes outpatient, office-based, hospitalizations, emergency department, prescription medications, vision, dental, home health, and a miscellaneous category.

Using the narrow definition, the study shows we spend 5.6% nationally on primary care, and using a broad definition, it’s 10.2%. Washington state’s expenditure is in line with the national average, 5.9% under the narrow definition and 10.1% under the broad. But drilling down, the numbers are a bit more interesting because you can see results by payer type. For private payers, under the narrow definition, the national average is 6% and Washington state’s is slightly lower, at 5.6%. The uninsured national rate and Washington state’s are identical, at 7.3%. For Medicaid insured, the rate nationally is 6% and 7% in Washington state. The national Medicare rate is 4.4% and in Washington state, it is 4.8%.

What is most interesting, though, is that while the national average for public payers is 4.7%, Washington state’s is 6.7%. Not only is it 43% more than the national average, it ties with Minnesota for being the highest in the country. Sadly, though, this is less than half of what other countries spend on primary care. A recent report showed Australia and Poland spent 18%, and Spain and Estonia spent 17%.

There is some good news. When you break down Washington state’s primary care by age groups under the narrow definition, it spends 36.8% of it on our 0-5 year-olds, significantly higher than the 25.9% national average, and among the highest rates in the nation!

The bottom line is that the report found as primary care investment increased, both hospital outcomes and emergency visits decreased. While more research is needed and causality cannot be inferred because of an inability to control other variables, other literature backs up that finding. As with any research, the study acknowledges its limitations. For example, MEPS is not the ideal data set because it is self-reported, limited to civilian and non-institutionalized populations, only allows reporting for 29 out of 50 states, and for a host of other reasons. But it is a start.

Research shows momentum is building across the country as more states are taking on the issue of primary care spending, with Rhode Island and Oregon leading the way. One common thread, which is near and dear to the Alliance, is the collaboration that is happening. As the report notes, “many of the leading states have formed multi-stakeholder collaboratives to come up with a definition for the kind of primary care they wish to have in their communities and recommendations for where investment is needed to achieve such care without expanding the total cost of care.” Our state is devoting resources to this effort and we support this wholeheartedly.

As you may recall, Milbank Memorial President Chris Koller challenged us to take on the issue of primary care spending in earnest at our last All-Alliance meeting. In his blog post, “Primary Care, Not Palaces” he offers some persuasive statistics as to why primary care is where we need to focus our efforts; inadequate health care contributes to 10% to 20% of premature deaths in the U.S. and research shows an increase of 10 primary care doctors per 100,000 people results in a life expectancy almost three times higher than a similar increase in specialty physicians.