In the United States, we are unfortunately all too familiar with the expensive nature of healthcare. Each year, costs go up while the quality of our benefits decreases. We continually see higher premiums but also higher deductibles and copays which increase our out-of-pocket expenses. Amidst this never-ending run of healthcare cost increases, it may sound counterintuitive to suggest that a key to lowering healthcare costs is to first spend more on healthcare. But, as this article will demonstrate, spending more to save more is not only possible, it’s exactly what we should be doing in this country.
When unpacking the $4.5 trillion the US spends on healthcare (yes, that’s trillion…with a T), it’s first important to understand that roughly 5% of that total is spent on primary care. With those numbers, it seems that primary care in the US isn’t actually that primary after all. Based on the statistics, the US spends more on dialysis treatments (an estimated 6% of total costs) than it does on primary care.
To better understand the context of this percentage, we can look at other developed countries in the world as a comparison. Fortunately, the OECD, or Organization for Economic Co-operation and Development compiles metrics on this very topic. The OECD comprises 38 developed nations throughout the world and forms a reasonable basis for comparison. Of particular interest with respect to healthcare costs, while the US spends 16.6% of its GDP on healthcare, the OECD average is merely 9.2%. Given that the US spends nearly twice the percentage of GDP on healthcare, exploring the variances in expenditures may provide clues and opportunities for improvement here domestically.
Among the myriad of comparative data points, one stands out above all the others. As mentioned previously, in the US, we spend about 5% of total healthcare dollars on primary care. In the other OECD nations, that number averages 14.5%1..nearly triple the rate domestically. Said another way, the rest of the developed world is investing a far greater proportion of healthcare dollars on primary care. As the spending relative to GDP suggests, this additional investment in primary care appears to be paying off.
A deeper look at the US vs. OECD comparison points to success with this larger primary care investment in terms of preventive care and outcomes. These other countries see 55% fewer avoidable hospital admissions for diabetes and 42% fewer avoidable admissions for heart failure than the US2. A strong, foundational primary care experience is essential in identifying and managing conditions such as these to prevent their escalation into more serious issues. It’s also important to note that the obesity rate in these nations is on average 40% lower. While primary care is not the only determining factor of obesity, it is an important element in health and prevention.
You may be thinking to yourself, “This is all great data, but is it possible this is just a coincidence?” While direct connections are impossible with the myriad of factors, we do have additional evidence that primary care is a core driver of lowering total costs.
Results from this 2023 study published in JAMA suggest a strong correlation between visit frequency, regularity, and continuity and improved health outcomes and reduced total cost of care. This study of the Medicare population divided patients into 6 groups based on their primary care utilization patterns. Those with the most consistent utilization (tabbed “highly continuous regular”) had 52% fewer ED visits, 43% fewer hospitalizations, and 41% lower annual costs than those in the “noncontinuous irregular” category3.
Another study using Veterans Affairs data draws similarly compelling conclusions. In reviewing health status and the number of primary care visits for a population of over 5M patients across 4 years, each incremental primary care visit was correlated with a $721 reduction in annual total cost of care4. This cost savings increased significantly for those in poorer health. To summarize more plainly, getting people, especially those in poorer health, on an active schedule of primary care visits is beneficial for health outcomes and costs.
In reviewing the discouraging data around United States healthcare spend and outcome metrics, coupled with the promising statistics on primary care’s ability to reverse these trends, one conclusion becomes clear. Engaging your population in access to comprehensive, proactive primary care can drive improved health and lower costs across the board. But while primary care is available everywhere, not all primary care is cut from the same cloth. To maximize the impact of this investment, it is critical to seek out five key elements from any care model:
- Integration – The way in which a primary care model incorporates other health tools and platforms that are part of your benefits offering
- Engagement Strategy – The unique methodology applied to each member of your population to connect with their health needs and drive best health actions
- More Care Under One Roof – An integrated care team (primary care, behavioral health, health coaching, care navigators, nutritional services and other clinical services) delivering comprehensive, advanced primary care that promotes physical, mental, and social wellbeing
- Business Model – Breaking free from traditional fee-for-service payments for care and aligning incentives so providers are paid for keeping individuals healthy, not simply treating them when they are sick
- Proven Track Record – A solution with demonstrable positive outcomes for employee or member populations, including patient experience, improved health status, and lower total cost of care
In looking at the numbers, the case is clear: investment in strong, engaging primary care will improve the health of your population while reducing your cost to administer health benefits. The challenge is in finding the right primary care models that will deliver the strongest return on your investment. These elements are all foundational parts of the apree health Advanced Primary Care (APC) model—do they play a role in your solution? Check out our exclusive buyer’s guide for Advanced Primary Care solutions to learn more about these five elements and how apree delivers a world class solution. [DOWNLOAD]
1https://www.oecd.org/els/health-systems/Spending-on-Primary-Care-Policy-Brief-December-2018.pdf
2https://www.oecd.org/unitedstates/health-at-a-glance-United-States-EN.pdf
