Primary care accounts for just 4% of U.S. health spending, HCCI report finds

Primary care accounts for just 4% of U.S. health spending, HCCI report finds © ink drop - stock.adobe.com

Despite decades of research linking primary care to better health outcomes and lower costs, a new report shows the United States continues to devote only a small fraction of health spending to primary care, and that share is slipping.

According to the report, which looked at data from 2022 and was published this week by the Health Care Cost Institute (HCCI), primary care accounted for just 4.39% of total medical and prescription spending among people with employer-sponsored insurance in 2022, down from 4.93% in 2018.

Medicare fee-for-service (FFS) beneficiaries fared worse, with primary care spending falling from 4.24% to 3.86% over the same period.

The trend places the U.S. below many other developed nations that dedicate larger shares of health budgets to primary care.

“Declining proportions of primary care spending in both the Employer-Sponsored Insurance (ESI) and Medicare FFS populations highlight the need for a robust national and state strategy on increasing primary care investment and provider supply,” the authors of the report wrote.

State-by-state disparities

The report also found stark variation across states. In 2022, employer-sponsored insurance spending on primary care ranged from just 1.54% in Alaska to 6.47% in Vermont. For Medicare FFS, the share was lowest in New York (2.66%) and highest in Nebraska (7.23%).

Nearly every state saw declines between 2018 and 2022. Vermont and Washington, D.C., were the only exceptions in the ESI market. In Medicare, just Kansas, Minnesota and D.C. recorded increases.

Researchers cautioned that the differences may reflect both spending levels on primary care and broader cost trends, meaning state results should be interpreted carefully.

Rural vs. urban divides

One consistent finding: rural areas devoted a higher share of spending to primary care than urban ones. Among employer-sponsored plans, rural areas spent 4.56% on primary care in 2022 compared to 4.37% in urban areas. The contrast was sharper in Medicare: 6.67% of rural spending went to primary care versus 3.40% in urban areas.

Those differences held steady from 2018 to 2022, though shares fell in both settings. For example, rural Medicare spending on primary care dropped nearly 8% over five years, while urban areas declined by more than 10%.

Workforce and access pressures

The findings come as primary care faces mounting workforce strain. As of 2025, 7,901 areas in the U.S. are designated primary care shortage areas by federal health officials, according to Health Resources & Services Administration (HRSA) Data Warehouse.

Meanwhile, fewer medical trainees are choosing primary care careers, and per-capita physician supply has declined over the past decade.

The report notes that wait times to see a primary care physician are lengthening in shortage areas, raising concerns about timely access and continuity of care.

Looking ahead

Some states have already begun to act.

Nearly 20 states have set benchmarks or initiatives to boost primary care investment, ranging from defining and measuring spending to setting minimum targets, but the national trend points downward.

As policymakers debate where to direct limited health care dollars, the HCCI analysis underscores the continued marginalization of primary care, adding urgency to calls for stronger reimbursement models, broader investment and a sustained pipeline of physicians to meet patient demand.