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November 19, 2020
Primary Care Spending Targets
Jul 18, 2022
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Strengthening primary care in the United States has been a prominent health policy topic for more than 13 years, tracing back to the publication of “Joint Principles of the Patient-Centered Medical Home.” There have been waves of efforts since then by federal and state government, health insurers, and provider organizations to transform primary care delivery, as well as change how primary care is reimbursed. Increasingly, states are creating “primary care spending targets” to increase the proportion of health care spending on primary care.
States are investing in primary care for two reasons: 1) research indicates that countries with health systems that invest more heavily in primary care relative to other types of care compare favorably on multiple performance dimensions, and 2) primary care physicians continue to be among the lowest paid physicians across all specialties, making it difficult to attract new physicians to primary care. In this post, we provide an update on which states have implemented primary care spending targets—and outline some of the challenges in standardizing measurement.
So far states have varied in their approaches. (See presentation on state definitions.) Primary care spending targets can be statutory or regulatory requirements of state agencies and/or insurers or serve as voluntary aspirational goals. State policies to date include:
Several additional states have established or are establishing processes to measure and report primary care spending as a percentage of total health care spending; this information may serve as a first step toward creating a target.
When developing primary care spending targets (regulatory or voluntary), experience shows that there are several design questions that need to be considered. Rhode Island and Oregon have differed in how they addressed a number of these questions.
As more states measure primary care spending as a percentage of total health care spending, there will be an opportunity to standardize measurement methodologies to support comparisons across states. Two national studies provide Medicare and commercial data by state (a national Medicaid study is under development). This standardization won’t be easy to achieve as local stakeholder engagement, legislative directives, and state policy objectives can result in differing methods across states—and pose formidable barriers to cross-state alignment. Still, we know that national organizations like the Centers for Medicare & Medicaid Services and the National Committee for Quality Assurance have successfully advanced standardized measurement and reporting requirements ─ for health plan performance, for example ─ so standardization for a core definition of primary care spending is possible.
The real challenge is determining whether primary care spending targets help to achieve the larger policy aim: strengthening primary care. Setting targets and measuring performance is only a means to that end. Figuring out whether these targets strengthen primary care will be difficult but also critical to know as more states move in this direction.
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