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California spends an average of only seven cents of every health care dollar on primary care — far short of what experts say is needed to sustain a strong health system. The consequences of this underinvestment are painfully visible across the state, with fewer primary care clinicians, growing barriers to care, worsening health inequities, and rising costs.
To reverse this trend, the state Office of Health Care Affordability (OHCA) adopted a benchmark requiring California insurers to increase their spending on primary care to 15% of total medical spending by 2034.
“Doubling the investment in primary care is the biggest opportunity in our lifetime to transform health care throughout the state,” said Todd May, MD, vice president and medical director at Health Net. “Study after study has shown that strong primary care leads to healthier people who spend less money on health care services.”
May was one of 63 leaders from health plans, provider organizations, and state agencies who gathered in Sacramento in November 2025 to discuss how to implement the state’s new primary care investment goals. The convening was organized by the California Health Care Foundation.
Rare Meeting Leads to a Realization
“It’s rare for plans, providers, and regulators to be in the same room,” said Alyson Spencer, MHA, vice president of clinical quality at Blue Shield of California. “During the meeting, it became clear that if we work together, we could make systemic changes in primary care payment models throughout the state.”
We’ve been asking primary care to carry the system on a shoestring. Reaching the 15% benchmark finally puts our money where the mission is.
Carlina Hansen, California Health Care Foundation
Decades of research show that robust primary care is associated with lower costs and more equitable health outcomes, including improved survival rates, reduced hospital usage, and positive patient feedback. More than half of Californians, including seven in 10 residents with low incomes, skip or delay care because it costs too much.
Boosting primary care funding can make health care more affordable. With their focus on prevention, primary care providers find health problems earlier, when they are easier and less expensive to treat. Access to a usual source of primary care reduced total health care expenditures by more than half for American adults with chronic disease, according to a recent analysis by Milbank Memorial Fund.
Discussing Three Investment Strategies
Participants at the convening rotated through hour-long small-group discussions on three investment strategies for moving toward the 15% benchmark. One uses contracts and payment models to change how clinicians are paid so they can spend more time focused on patients and prevention. Others include strengthening networks of providers to deliver advanced primary care and investing in staff and technology that improve patients’ experiences.
One takeaway from the discussions was the importance of health plans measuring and reporting their health care spending. “Before plans can allocate more resources to primary care, it’s important to evaluate data showing where the resources are going currently,” said attendee Miriam Sheinbein, MD, medical director of Health Plan of San Mateo (HPSM). “Step two is deciding how to increase primary care spending and ensuring the dollars get to primary care.”
In 2023, HPSM surveyed its primary care providers to identify their top challenges. The results are guiding the health plan’s efforts to increase primary care spending.
“There is no one-size-fits-all strategy,” said Sheinbein. “Our primary care network includes federally qualified health centers, large health systems, and a lot of small independent practices. Their needs and capabilities are different, which means offering different solutions.”
The health plan’s survey uncovered the need for more specialist support in some geographic areas, which sparked a pilot project that will give primary care providers access to eConsults, remote peer-to-peer consultations with specialists. For example, if primary care providers see patients with joint-related problems, an eConsult allows them to query a rheumatologist and get the necessary guidance to manage the condition themselves. “This way, patients can avoid the inconveniences of additional appointments, like scheduling, wait times, time off work, and travel for in-person specialty visits,” Sheinbein said.
A Roadmap for Collaboration
The convening surfaced information about an existing partnership among three health plans that aims to improve primary care services. The Purchaser Business Group on Health, a nonprofit coalition of private employers and public entities, works through its California Quality Collaborative with the Integrated Healthcare Association on an initiative that is guiding Health Net, Blue Shield of California, and Aetna toward a value-based payment system to replace fee-for-service. Payments for more patients are being calculated under the value-based model, which enables providers to increase their compensation based on improved performance, said May.
“Providers are trained to be proactive rather than reactive to address problems,” he said. “Everyone in the office has a role, including receptionists, medical assistants, physicians, nurses, and other staff.”
The initiative is tracking outcomes to evaluate whether the changes are working. “My hope is that this could be a roadmap scaled to meet the OHCA targets,” said May.
While investment in primary care can improve quality of care and restrain costs, the benefits may take time to fully materialize. “Financial investment is necessary, but not sufficient on its own, to achieve, sustain, and scale advanced primary care,” said Edward Sheen, MD, MPH, MBA, chief quality and population health executive at L.A. Care Health Plan, who attended the convening. “Many practices also require technical support and infrastructure to enable higher performance, including advanced technology, data analytics, staffing, training, workflow redesign, and next generation care models.”
He said greater collaboration among payers and providers is essential to implement aligned payment models. “Organizations may experience initial financial losses before realizing a predictable clinical and financial return on investment,” he said. “Once achieved, these returns can be reinvested to better serve vulnerable populations.”
Zeroing In on Strategies
The California Health Care Foundation expects to host another convening later in 2026 and is exploring more ways to support California plans, providers, and purchasers seeking to improve primary care.
“Our next step is to support partners in their work turning these ideas into action,” said Carlina Hansen, MHA, a CHCF senior program officer who helped organize the convening. The goals are to encourage the state and purchasers to align their approach, support provider- and plan-level implementation, and develop tools and supports needed to deliver advanced primary care at scale, she said.
“For decades, we’ve asked primary care providers to solve complex health challenges while giving them the smallest share of resources,” Hansen said. “We’ve been asking primary care to carry the system on a shoestring. Reaching the 15% benchmark finally puts our money where the mission is.”
