Spending more on primary care reduces hospitalization costs, study finds

July 24, 2019

A new study points to the value of investing in primary care services

Spending more on primary care means spending less on hospitalization for chronic conditions and emergency department services, according to a new

Public and private insurers who prioritize primary care services are less likely to spend money on emergency services, according to a recent report by the Patient-Centered Primary Care Collaborative.

The report found a correlation between increased primary care spending and fewer hospitalizations and emergency department visits, especially for patients with chronic conditions such as diabetes, chronic obstructive pulmonary disease, high blood pressure, pneumonia, urinary tract infections and congestive heart failure.

“Consistent and growing evidence shows that primary care oriented systems achieve better health outcomes, more health equity and lower costs,” the report reads.

Yet, the report found that primary care in the United States, when compared to other countries, is underfunded. Only 5 percent to 7 percent of healthcare spending goes toward primary care. Traditional Medicare only spends between 2 percent and 4 percent on primary services.

Meanwhile, the Organization for Economic Cooperation and Development, an international organization, invests an average of 14 percent.

Under-investment in the U.S. is influenced by fee-for-service payments (FFS) which reward the number of healthcare services provided rather than their quality, the report reads.

“[FSS] overvalues procedures and interventions at the expense of cognitive healthcare services that are key to the management of chronic conditions,” the report says. Cognitive healthcare services, like primary care, have been shown to help prevent patients from getting sick in the first place, according to the report.

With less funding, primary care practices in the United States are less able to give adequate attention to patients, and their range of services become limited.

In response, 10 states have passed new legislation or signed executive orders to explore primary care spending in their states and seek input from stakeholders, including the medical community, on ways to increase primary care spending, reduce healthcare costs and improve patient outcomes.

“These efforts generally included setting up some kind of multi-stakeholder collaboration in order to get diverse input on defining and measuring primary care spend …” the report says. “Some efforts set goals for what the community wishes to achieve with increase primary care investment, and some set primary care spend targets to achieve during a given time period.”