Study: Primary care accounts for a fraction of overall Medicare spend 

Despite an industry focus on the benefits of primary care, spending on such services makes up just a fraction of Medicare spending, according to a new study. 

Researchers at RAND Corporation analyzed spending patterns and found spending on primary care accounts for between 2.12% and 4.88% of overall spending for Medicare Parts A, B and D. 

It reached those figures using two different definitions of primary care, one that included services provided just by family practice, internal medicine and pediatricians, and a broader one that also included geriatricians, nurse practitioners, physician assistants and gynecologists. 

All told, RAND analyzed 16 million Medicare claims from 2015. Mark Friedberg, a senior physician policy researcher at RAND and one of the study’s authors, told FierceHealthcare that it’s notable that spending was low regardless of how many primary care providers were available per capita, which is often used as a measure. 

“A lot of people will be surprised at how low it is, actually,” Friedberg said. 

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Friedberg said that though the study doesn’t come to any particular policy conclusions, the take away for people in that space is a simple one: there is room to invest more money in primary care.

Boosting investment by even just 10% to 15% and would account for less than 1% of Medicare spend, but is still a bonus that PCPs would feel, he said.

“That’s a pretty substantial investment in primary care practices,” Freidberg said. 

The report comes as many in the industry are emphasizing primary care to drive down healthcare costs and improve patient outcomes, across various patient populations.  

The amount spent by Medicare beneficiaries on primary care services varied between states the study found, and was as low 1.59% in North Dakota, using the study’s narrower definition, and as high as 4.74% in Iowa under the more exhaustive definition. 

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RAND’s researchers also found that spending was lower among older beneficiaries, blacks, Native Americans, dual-eligible patients and people with chronic conditions. Medicare beneficiaries also spent less on primary care than younger people in the commercial market, based on comparisons to prior studies. 

Friedberg said that finding doesn’t necessarily come as a shock, as Medicare beneficiaries are more likely to be hospitalized and need other pricey services. 

“All that stuff is expensive, and primary care is such a fraction of the cost,” he said.