Primary Care Spending

By July 26, 2019 August 1st, 2019 Commentary

For the last decade, at least, there has been an emphasis on the value of primary care and significant efforts to improve the compensation of primary care providers and boost the infrastructure to assist them in taking better care of patients.  This is all done in the belief that more and improved primary care will forestall serious disease progression and reduce overall health spending.  As usual, sounds good, but the research support is somewhat scanty.  A report from a group working on better primary care details the level of primary care spending by state.    (PCPCC Report)    Acknowledging that defining what spending is included in primary care is difficult, the authors find that depending on that definition, about 5% to 10% of total health spending in the United States goes to primary care.  They then compare this to a developed country average of 14% and say we are underinvesting.  This is as usual, a completely bogus comparison.  We pay specialists, hospitals, etc. a whole lot more than other countries do, so this alleged difference in spending is wholly a pricing artifact.  If you look at utilization, which is a more accurate comparison, we have good rates of primary care visits compared to other countries, and we don’t have excessive use of specialists or hospitalizations.

The state with the highest level of primary care spending is Minnesota, while Connecticut has the lowest level under a narrow definition and New Jersey has the lowest under a broader definition.  But again, looking at spending is the wrong way to do the analysis, you need to look at utilization.  A simple example shows why.  If Connecticut has really high hospital prices or really high specialist prices, and just average primary care doctor compensation, it is going to look like it spends less on primary care, even though its citizens may be getting a perfectly adequate number of primary care visits. The authors also purport to find a relationship between primary care spending and lower use of ERs and lower levels of hospitalizations, especially what are referred to as ambulatory care sensitive hospitalizations.  I think that relationship does exist, but it probably is tied more to the quality of the primary care and the number of visits than to spending.   In general this is a lousy report–it uses MEPS data, which is not ideal for this purpose and the authors were only able to include results for 29 states.  Why not go get a good commercial, or even Medicare database, which would be a much better data source.  I agree that primary care is very important and that improving models of delivering primary care will have a significant effect on patient health and probably will lower spending.  But this piece of research is basically worthless.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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