Report: Investment in Primary Care Associated with Less Spending on Emergency Room, Hospital Care

FOR IMMEDIATE RELEASE: Thursday, July 18, 2019

Contact:
Leslie Champlin
Senior Public Relations Strategist
(800) 274-2237, Ext. 5224
lchampli@aafp.org 

Report: Investment in Primary Care Associated with Less Spending on Emergency Room, Hospital Care 

WASHINGTON, DC — Health insurance companies and public payers who spend more on primary care services likely spend less on expensive care in emergency rooms, hospitals and other settings, according to the Patient-Centered Primary Care Collaborative report, “Investing in Primary Care: A State-level Analysis.”

The PCPCC report, led by Yalda Jabbarpour, MD, medical director at the Robert Graham Center, with analysis done by Annu Jetty, health services researcher at the Graham Center, looked at the amount of money private and public insurers were spending on primary care—known as the primary care spend—in 29 states. They also investigated whether that investment was associated with ER use, ambulatory care-sensitive hospitalizations and total hospitalizations.

Their results showed the national average for primary care investment was 5.6%, but that percentage varied across the 29 states studied. They also found that increased spending on primary care was associated with fewer emergency department visits, total hospitalizations and hospitalizations for ambulatory care-sensitive conditions such as diabetes, chronic obstructive pulmonary disease, high blood pressure, pneumonia, urinary tract infections and congestive heart failure.

The PCPCC’s report builds on multiple research reports demonstrating the link between access to primary care and lower costs, hospitalizations and ER use. Other studies have shown an increase of one primary care physician per 10,000 people reduces deaths by more than 5%. Despite the PCPCC and other research findings, US investment in primary care services amounts to half or less than the primary care spend in Economic Co-operation and Development countries, which spend an average of 14% of their total health investment on primary care.  

“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 says. “…Despite the fact that primary care accounts for 48% of physician office visits each year and influences up to 90% of total health care costs through referrals, testing, procedures and hospitalizations, the United States spends, on average, only 5%-7% of its total health care spend on primary care.”

Traditional Medicare, which doesn’t include Medicare Advantage, invests only 2% to 4% as a percentage of Medicare’s total medical and pharmacy spending.

The study is important as a foundation for continued measurement of primary care spend at the state and national levels. Continued measurement “can heighten visibility of how public and private payers value primary care over time and by comparison to their other health care expenditures,” the report says. “The PCPCC’s first-of-its-kind report demonstrates that such reporting is feasible. The robust and growing evidence base about the value of primary care underscores the importance of reporting such measures.

“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.”

“Investing in Primary Care: A State-level Analysis” was made possible by the support from the Milbank Memorial Fund.