Investing in Primary Care: Why It Matters for Californians with Commercial Coverage

Decades of research have shown that increased investments in primary care lead to higher-quality and more equitable care as well as lower costs. However, there were few data on the level of primary care investment specifically in the California health care market. This first-of-its-kind study measures primary care spending, as a proportion of overall spending, among eight health plans and their product offerings, covering 80% of commercially insured adults in California (13.9 million). The study also took a deeper look at the primary care spending of 180 separate provider organizations, comprising 8.5 million adults enrolled in HMO plans, or nearly half of California’s commercially insured adults.

To measure the impact of primary care investment on care quality, researchers compared provider organizations on measures including the share of members who received recommended breast cancer, cervical cancer, and colorectal cancer screenings; received appropriate medications; and who had their diabetes care goals met.

Key Findings

• The percentage of primary care spending varied more than twofold among the plans, from a low of 4.9% to high of 11.4%, mostly below other states’ recommended levels of 9% to 12%.
• Greater investment in primary care among health plans was associated with better quality care and fewer hospital visits.
• Among the provider organizations, larger investments in primary care were associated with better quality, better patient experience, and fewer hospital and emergency room visits, as well as a lower total cost of care.
• If provider organizations in the lower brackets of primary care spending matched those in the highest bracket of spending, 25,000 acute hospital stays and 89,000 emergency room visits would be avoided, and $2.4 billion in overall health care spending would be saved in a single year.

This study contributes to the body of evidence showing that health care systems that invest more in primary care as a proportion of their overall budget perform better on measures of quality, utilization, and cost.

The research was conducted by Integrated Healthcare Association, Onpoint Health Data, RAND Corporation, and Bailit Health Purchasing with support from the California Health Care Foundation, Covered California, and the Milbank Memorial Fund.

This publication is part of a CHCF series on primary care investment in California. Learn more at the Primary Care Matters Resource Center.