Primary Care Spending in the Fee-for-Service Medicare Population | Health Care Economics, Insurance, Payment | JAMA Internal Medicine | JAMA Network
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Figure.  Primary Care Spending as a Proportion of Total Medical and Prescription Spending Among Fee-for-Service Medicare Beneficiaries
Primary Care Spending as a Proportion of Total Medical and Prescription Spending Among Fee-for-Service Medicare Beneficiaries

Definitions of primary care practitioner (PCP) and primary care services are given in the Methods section.

Table.  Patient Characteristics and Primary Care Spending Among Fee-for-Service Medicare Beneficiaries in 2015
Patient Characteristics and Primary Care Spending Among Fee-for-Service Medicare Beneficiaries in 2015
1.
Friedberg  MW, Hussey  PS, Schneider  EC.  Primary care: a critical review of the evidence on quality and costs of health care.  Health Aff (Millwood). 2010;29(5):766-772. doi:10.1377/hlthaff.2010.0025PubMedGoogle ScholarCrossref
2.
Starfield  B, Shi  L, Macinko  J.  Contribution of primary care to health systems and health.  Milbank Q. 2005;83(3):457-502. doi:10.1111/j.1468-0009.2005.00409.xPubMedGoogle ScholarCrossref
3.
Pham  H, Ginsburg  PB.  Payment and delivery-system reform—the next phase.  N Engl J Med. 2018;379(17):1594-1596. doi:10.1056/NEJMp1805593PubMedGoogle ScholarCrossref
4.
Koller  CF, Khullar  D.  Primary care spending rate—a lever for encouraging investment in primary care.  N Engl J Med. 2017;377(18):1709-1711. doi:10.1056/NEJMp1709538PubMedGoogle ScholarCrossref
5.
Bailit  MH, Friedberg  MW, Houy  ML.  Standardizing the Measurement of Commercial Health Plan Primary Care Spending. New York, New York: Milbank Memorial Fund; 2017, https://www.milbank.org/publications/standardizing-measurement-commercial-health-plan-primary-care-spending/. Accessed March 5, 2019.
6.
US Department of Health and Human Services, Health Resources and Services Administration, Bureau of Health Workforce. Area Health Resources Files (AHRF) 2015-2016. Rockville, MD. https://data.hrsa.gov/topics/health-workforce/ahrf. Accessed March 5, 2019.
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    2 Comments for this article
    EXPAND ALL
    We get what we pay for
    Brian Crownover, MD | Independent Clinic
    For primary care to deliver the majority of visits in the US (https://www.cdc.gov/nchs/fastats/physician-visits.htm) and receive less than 1/4 of the Medicare spend on physician services (appx 20% of Medicare spend is on physician services), it is no surprise the USA continues to rank last in the developed world (https://medium.com/@harsh.singh.clif/u-s-health-care-ranked-worst-in-the-developed-world-1d397cd291c6).

    Primary care is a great investment that high-performing health systems consistently support. Research shows that greater use of primary care is associated with lower costs, higher patient satisfaction, fewer hospitalizations and emergency department visits, and lower mortality. (https://www.milbank.org/2017/07/getting-primary-care-oriented-measuring-primary-care-spending/)
    CONFLICT OF INTEREST: None Reported
    Primary Care and Medicare
    Paul Nelson, M.D., M.S. | Family Health Care, P.C. retired
    Since Medicare does not have a means to reliably indicate a person's primary physician at the time of any reimbursable healthcare encounter, it would be largely futile to assess the portion of Medicare health spending that originated from the professional involvement of primary healthcare. The CMS efforts to refine it for MIPS is a good example of its futility.

    The efforts in Rhode Island to improve the reimbursement of primary healthcare could eventually "tell the tale." The state legislature enacted a mandatory requirement to increase the reimbursement by private health insurance payors. The mandated increase
    occurred at 1% a year for 2010-2014 without an increase in premiums. The original plan involved a variety of complex regulatory requirements for health insurance. Recently, a report on the Rhode Island experience appeared in Health Affairs (February 2019). I suspect that "more to come" applies.
    CONFLICT OF INTEREST: None Reported
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    Research Letter
    April 15, 2019

    Primary Care Spending in the Fee-for-Service Medicare Population

    Author Affiliations
    • 1RAND Corporation, Boston, Massachusetts
    • 2Division of General Internal Medicine and Primary Care, Brigham and Women’s Hospital, Boston, Massachusetts
    • 3Harvard Medical School, Boston, Massachusetts
    • 4RAND Corporation, Santa Monica, California
    JAMA Intern Med. 2019;179(7):977-980. doi:10.1001/jamainternmed.2018.8747

    Greater health system orientation toward primary care is associated with higher quality, better outcomes, and lower costs.1,2 Recent payment and delivery system reforms emphasize investment in primary care,3 but resources presently devoted to primary care have not been estimated nationally.4,5 In this study, we calculated primary care spending as a proportion of total spending among Medicare fee-for-service beneficiaries and describe variation by beneficiary characteristics and by state.

    Methods

    We analyzed spending for all Medicare beneficiaries 65 years or older with 12 months of Parts A and B fee-for-service medical coverage and Part D prescription coverage in 2015. We used the Master Beneficiary Summary File (MBSF) Base segment (enrollment and demographic data), MBSF Cost and Utilization segment (total medical and prescription spending), and MBSF Chronic Conditions segment (27 chronic conditions); Carrier File (professional claims) and Outpatient File (professional claims absent from the Carrier File including critical access hospitals, rural health centers, federally qualified health centers, and electing teaching amendment hospitals); and Medicare Data on Provider Practice and Specialty File (practitioner characteristics). This study was approved by the RAND Corporation Human Subjects Protection Committee with waiver of informed consent for analysis of deidentified data.

    We measured primary care spending by using narrow and broad definitions of primary care practitioners (PCPs) and primary care services.5 The narrow PCP definition included family practice, internal medicine, pediatric medicine, and general practice; the broad PCP definition also included nurse practitioners, physician assistants, geriatric medicine, and gynecology. Both definitions excluded hospitalists.

    The narrow primary care services definition included Healthcare Common Procedure Coding System codes on professional claims, including evaluation and management visits, preventive visits, care transition or coordination services, and in-office preventive services, screening, and counseling; the broad definition included all professional services billed by PCPs. We excluded facility fees for outpatient primary care services billed in the Carrier File and did not include services ordered but not performed directly by PCPs (eg, tests and medications).

    We measured primary care spending as a percentage of total medical and prescription spending nationally, by beneficiary characteristics, and by state. Statistical analyses were performed using SAS software, version 9.4 (SAS Institute). Results were reported as 2015 US dollars and Spearman correlation coefficients. We reported 2-tailed P < .05 as statistically significant.

    Results

    Among 16 244 803 beneficiaries, primary care represented 2.12% of total medical and prescription spending for the narrow definitions of PCPs and primary care services and 4.88% for the broad definitions (Table). For all definitions, primary care spending percentages were lower among beneficiaries who were older (eg, 1.76% for beneficiaries 85 years or older vs 2.12% for all beneficiaries, using the narrow definition), black (1.76%) or North American Native (1.51%), dually eligible for Medicare and Medicaid (1.64%), and who had chronic medical conditions (except hyperlipidemia). Primary care spending percentages varied by state (Figure), from 1.59% in North Dakota to 3.18% in Hawaii for the narrow health care provider and service definitions and from 2.92% in the District of Columbia to 4.74% in Iowa for the narrow health care provider and broad service definition. States’ primary care spending percentages were not significantly correlated with per capita PCP headcounts6 (Spearman correlation coefficients 0.10 [P = .47] and −0.07 [P = .61], respectively).

    Discussion

    Primary care spending represented a small percentage of total fee-for-service Medicare spending and varied substantially across populations and states. Primary care spending percentages were lower among medically complex populations and were not correlated with state-level PCP headcounts, which suggests that headcounts might mismeasure primary care investment. Our estimates of primary care spending percentages in Medicare were lower than previous estimates among a convenience sample of commercial insurers, states, and other countries4,5; these comparisons were confounded by differences in patient age, payer type, and other factors.

    One limitation of this study is that our broader definitions of primary care spending may have included nonprimary care services delivered by PCPs, while our narrower definitions of primary care services may have excluded some PCPs or primary care services.

    The optimal percentage of Medicare spending for primary care is unclear. Future research should evaluate effects on quality or outcomes of state efforts (eg, Rhode Island and Oregon) to institute minimum primary care spending percentages.4 Our estimates may constitute reference points for future policies across the United States.

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    Article Information

    Accepted for Publication: December 22, 2018.

    Corresponding Author: Rachel Reid, MD, MS, RAND Corporation, 20 Park Plaza, Ste 920, Boston, MA 02116 (rreid@rand.org).

    Published Online: April 15, 2019. doi:10.1001/jamainternmed.2018.8747

    Author Contributions: Dr Reid had full access to all the data in the study and takes responsibility for the integrity of the data analysis.

    Concept and design: Reid, Friedberg.

    Acquisition, analysis, or interpretation of data: All authors.

    Drafting of the manuscript: Reid.

    Critical revision of the manuscript for important intellectual content: Damberg, Friedberg.

    Statistical analysis: Reid.

    Obtained funding: All authors.

    Supervision: Friedberg.

    Conflict of Interest Disclosures: Dr Reid reported receiving grants from the Milbank Memorial Fund, the Agency for Healthcare Research & Quality, and the National Institute for Health Care Management during the conduct of the study; receiving research contracts from the American Academy of Physician Assistants, the Centers for Medicare & Medicaid Services, the United States Department of Health and Human Services, and the Leonard D. Schaeffer RAND-University of Southern California Initiative in Health Policy and Economics outside the submitted work. Dr Damberg reported receiving grants from the Milbank Memorial Fund and the Agency for Healthcare Research & Quality during the conduct of the study. Dr Friedberg reported receiving grants from the Agency for Healthcare Research and Quality, the National Institute on Aging, the National Institute on Minority Health and Health Disparities, the National Institute of Diabetes and Digestive and Kidney Diseases, and The Commonwealth Fund during the conduct of the study; and reported receiving research contracts from the Milbank Memorial Fund, the Centers for Medicare & Medicaid Services, the American Medical Association, the American Board of Medical Specialties, Cedars-Sinai Medical Center, the Washington State Institute for Public Policy, and the Patient-Centered Outcomes Research Institute outside the submitted work.

    Funding/Support This work was supported by a grant from the Milbank Memorial Fund and was supported through the RAND Center of Excellence on Health System Performance, which is funded by cooperative agreement 1U19HS024067-01 between the RAND Corporation and the Agency for Healthcare Research & Quality.

    Role of the Funder/Sponsor: The funding organizations had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.

    Disclaimer: The content and opinions expressed in this publication are solely the responsibility of the authors and do not reflect the official position of the Agency for Healthcare Research and Quality or the US Department of Health & Human Services.

    References
    1.
    Friedberg  MW, Hussey  PS, Schneider  EC.  Primary care: a critical review of the evidence on quality and costs of health care.  Health Aff (Millwood). 2010;29(5):766-772. doi:10.1377/hlthaff.2010.0025PubMedGoogle ScholarCrossref
    2.
    Starfield  B, Shi  L, Macinko  J.  Contribution of primary care to health systems and health.  Milbank Q. 2005;83(3):457-502. doi:10.1111/j.1468-0009.2005.00409.xPubMedGoogle ScholarCrossref
    3.
    Pham  H, Ginsburg  PB.  Payment and delivery-system reform—the next phase.  N Engl J Med. 2018;379(17):1594-1596. doi:10.1056/NEJMp1805593PubMedGoogle ScholarCrossref
    4.
    Koller  CF, Khullar  D.  Primary care spending rate—a lever for encouraging investment in primary care.  N Engl J Med. 2017;377(18):1709-1711. doi:10.1056/NEJMp1709538PubMedGoogle ScholarCrossref
    5.
    Bailit  MH, Friedberg  MW, Houy  ML.  Standardizing the Measurement of Commercial Health Plan Primary Care Spending. New York, New York: Milbank Memorial Fund; 2017, https://www.milbank.org/publications/standardizing-measurement-commercial-health-plan-primary-care-spending/. Accessed March 5, 2019.
    6.
    US Department of Health and Human Services, Health Resources and Services Administration, Bureau of Health Workforce. Area Health Resources Files (AHRF) 2015-2016. Rockville, MD. https://data.hrsa.gov/topics/health-workforce/ahrf. Accessed March 5, 2019.
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