Primary care accounts for a small share of Medicare spending, RAND study finds

By | April 15, 2019

Care provided by primary care practitioners accounts for a small fraction of total spending among Medicare beneficiaries, according to a new RAND Corporation study being published in the journal JAMA Internal Medicine.

Depending on whether narrow or expansive definitions of primary care are used, primary care spending represents 2.12 to 4.88 percent of total medical and prescription spending in Medicare Parts A, B and D.

The study’s narrow definition of primary care practitioners includes family practice, internal medicine, pediatrics and general practice. The study’s broad definition includes nurse practitioners, physician assistants, geriatric medicine and gynecology.

The study also classified primary care services using a narrow definition of office visits and preventive care and an expansive definition of any service provided by a primary care practitioner.

IMPACT

The researchers say the information is important because health system orientation toward primary care has been associated with higher quality, better outcomes and lower costs.

Health systems with greater primary care orientation also have a greater  efficiency of care, with spending being one potential measure.

Primary care spending was lower among Medicare beneficiaries who were older, black, Native American, dually eligible for Medicare and Medicaid, and who had chronic medical conditions.

Primary care spending percentages vary by state. Under the narrow primary care practitioner and service definitions, the range spanned from 1.59 percent of medical spending in North Dakota to 3.18 percent of medical spending in Hawaii.

For the expansive primary care service definition, the spending percentages ranged from 2.92 percent in the District of Columbia to 4.74 percent in Iowa.

Of note is that states’ primary care spending percentages were not associated with the number of primary care practitioners per capita.

States such as Rhode Island and Oregon recently have instituted minimum primary care spending percentages for health plans. But they haven’t had  reference points for how high or low their existing percentages are relative to other states.

The RAND researchers used national Medicare claims for the study, a method that makes valid interstate comparisons possible.

WHAT ELSE YOU NEED TO KNOW

The RAND study is based on the medical care provided to more than 16 million fee-for-service Medicare beneficiaries during 2015. Information analyzed included outpatient care, hospital services and prescription medications.

Study authors include lead author Dr. Rachel Reid, Cheryl Damberg, PhD and Dr. Mark W. Friedberg. Support was provided by the Milbank Memorial Fund and the Agency for Healthcare Research and Quality.
 
RAND Health Care said it promotes healthier societies by improving healthcare systems in the U.S. and other countries. The nonprofit research organization did the study to offer policy makers a set of reference points to guide decisions concerning primary care spending.

TREND

The RAND study provides lower estimates of primary care spending than an earlier study that investigated younger, commercially insured patient populations. The primary care spending estimates in the RAND study also are lower than estimates made in other countries.

ON THE RECORD

“There is no consensus about the optimal share of medical spending that should be devoted to primary care,” said Dr. Rachel O. Reid, the study’s lead author and a physician scientist at RAND. “However, a current estimate of such spending can be a reference point for policy debates about investment in primary care.”
 

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com

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