The Key To Improving Population Health And Reducing Disparities: Primary Care Investment

The Affordable Care Act (ACA) enabled millions of Americans to obtain health insurance. Yet, having an insurance card doesn’t guarantee access to care.

Primary care teams play a critical role in prevention, controlling common chronic diseases, addressing social determinants of health, and coordinating testing and specialist care when it’s needed. Over time, they become trusted advocates for patient health and well-being. US adults are the least likely population in the world to have a longstanding relationship with a primary care provider due to an eroding of primary care infrastructure in the nation. Absent such relationships, many get lost or ignored by our health care system. Negative patient experiences fuel distrust and a lack of patient engagement. Americans’ health suffers as a result.

The 2021 landmark report from National Academy of Sciences, Engineering, and Medicine offers a blueprint for revitalizing primary care. A growing number of states are taking action and revealing a model for how to reorient our health care system around high-quality, high-value primary care.

Primary Care Is In Crisis

Decades of research show primary care is the foundation of all high-performing health care systems. Robust primary care leads to more equitable health outcomes, lower costs, and better-quality care.

Despite the evidence, our health care system undervalues primary care. Nationwide, it accounts for 35 percent of health care visits but receives just five cents of every health care dollar spent. Too many providers are paid to deliver specific services instead of fostering health outcomes. Subsequently, our health care system often prioritizes the high-drama and high-cost treatment of advanced disease more than practical prevention and disease management. In 2020, health care costs totaled 20 percent of the United States’ gross domestic product, growing faster than our economy and inflation.

Fueled by health care workforce challenges, access to primary care is declining. Fewer primary care physicians are entering the field, in part because they earn 40 percent less than specialists. A generation of primary care providers will soon retire, and others are leaving the field due to burnout. Many more are finding that they do not receive sufficient payment to provide the team-based care necessary to support their patients. These conditions demand action.

Ingredients For Effective State Action On Primary Care

More than one-third of states and several of the nation’s largest purchasers have prioritized shifting more of their health care spending toward primary care. New research reveals that the success of these state-led reform efforts is a function of three ingredients:

  • establishing a shared vision among health care stakeholders,
  • conducting annual measurement and reporting across markets based on a shared definition of primary care, and
  • setting investment targets and encouraging or requiring all purchasers to commit through contractual requirements.

Another study identifies four key approaches to invest in primary care more effectively in state Medicaid programs:

  • prioritizing multipayer efforts,
  • giving Medicaid stakeholders a seat at the table,
  • changing how primary care providers are paid (specifically to capitated or partially capitated primary care alternative payment models), and
  • setting standards for how investment is used.

The potential for these approaches to shift health care investment rests on the engagement of multiple stakeholders. The work is complex and time-intensive, but as seen below, states across the political spectrum are showing measurable progress.

California’s Primary Care Experience

California faces persistent primary care challenges. In 2018, 45 percent of residents had insufficient access to primary care. According to 2022 estimates, more than 11 million Californians live in a designated primary care shortage area. By 2030, the state will have a shortage of 4,700 primary care providers.

The California Future Health Workforce Commission has developed a strategic plan to build the needed health workforce. While progress has been made to expand the number of primary care physician residency programs, success will be elusive if primary care is not seen as a viable career.

Recognizing that changes to our health care system demand partnership, the California Health Care Foundation has gathered public and private health care purchasers, policy makers, analysts, consumer advocates, and funders to align primary care investment strategies and activities within the Primary Care Investment Coordinating Group. Since 2021, this group has been developing a set of guiding principles and recommended actions for measuring, reporting, and assessing primary care spending results, and deployed data with transparency to create a new business model for primary care. The group’s alignment of activities is taking shape, with strong leadership from California’s public purchasers that provide health care for a third of the state. Starting next year, the California Public Employees’ Retirement System will require preferred provider organizations to match members with primary care providers to improve care quality. Covered California, the state’s ACA Marketplace, will require health plans to measure and report primary care spending. Starting in 2024, the Department of Health Care Services will tie payments for Medi-Cal managed care to quality and equity measures, and plans will be required to report on their primary care spending.

The group has also supported California-focused research. A study about the commercial health insurance market revealed wide variation in the level of primary care investment while suggesting that increasing such investment could save $2.4 billion in annual care costs and prevent 89,000 emergency department visits each year among Californians enrolled in health maintenance organizations. This research provides a compelling baseline for California’s Office of Health Care Affordability, which will establish industrywide growth targets to ensure affordability for consumers and purchasers, set and enforce targets designed to increase primary care and behavioral health investment, promote greater use of alternative payment models, and monitor impacts on workforce stability.

Maryland’s Primary Care Experience

Maryland is making significant efforts to transform the delivery of primary care. In 2016, Maryland began negotiations with the Center for Medicare and Medicaid Innovation (the Innovation Center) to extend the all-payer hospital waiver to become the first state-based Total Cost of Care model. Stakeholder groups convened by the Maryland Department of Health recognized that success could not be achieved without a strong primary care workforce to reduce avoidable and unnecessary hospital and emergency department visits and provide overall improvements in health.

Subsequently, a voluntary statewide advanced primary care program, the Maryland Primary Care Program (MDPCP), was launched. Now in its fourth year, the program has 545 primary care sites, encompassing two-thirds of all eligible sites in the state and more than 2,100 providers serving approximately four million Marylanders. A key ingredient of success was financial and technical support to help practices transform from a fee-for-service, volume-driven system to team-based, comprehensive care. Medicare payments within the program approximately doubled preexisting Medicare fee-for-service revenue, enabling practices to hire new staff and reconfigure roles and tasks to provide team-based care.

The state created an MDPCP Program Management Office to lead the effort. It provided coaches to assist practices with social needs screening and developed a suite of technology tools, including an AI tool to help practices identify patients likely to have avoidable hospital use. Together with the Innovation Center, MDPCP instituted the first ever Medicare care management payment to support patients with high disease burdens living within high Area Deprivation Index areas.

Results have been favorable. In the first two years, the program reduced inpatient hospital use by 21 percent. And compared to matched controls, MDPCP practices had statistically fewer COVID-19 cases, hospitalizations, and 20 percent fewer COVID-19 deaths.

The 2022 Maryland General Assembly passed Senate Bill 734 that requires the establishment of a multistakeholder workgroup to analyze primary care investments and report to the governor on ways to improve quality and access with attention to reducing disparities and avoiding increasing costs. Recommendations from this workgroup will identify the funding needed to make whole-person, team-based primary care a reality across the state.

Nebraska’s Primary Care Experience

Nebraska’s efforts to improve access to primary care began in 2009 when the Nebraska Academy of Family Physicians (NAFP) advocated for legislation to conduct Medicaid-funded Patient-Centered Medical Home (PCMH) pilot programs. This led to the creation of a state committee, voluntary standard definitions for insurers, and common quality measures. Blue Cross Blue Shield of Nebraska and several Medicaid managed care plans participated and contracted with clinics across the state.

The PCMH evolved as its footprint grew. Nebraska was an early adopter of the Medicare Shared Savings Program. Multiple independent clinic networks and hospital systems formed accountable care organizations (ACOs), which achieved high levels of quality compared to peers across the country. Several demonstrated cost savings in commercial and Medicare contracts. In total, the eight Nebraska-based Medicare ACOs saved a net of $27.5 million in 2020, with four earning $20 million in shared savings payments.

In 2018, Nebraska joined the Comprehensive Primary Care Plus model. That same year, stakeholders convened to develop common quality measures to help reverse Nebraska’s multidecade slide in America’s Health Rankings. Facilitated by the University of Nebraska School of Public Health, clinical leaders from most of Nebraska’s ACOs, insurance plans, and Nebraska Medicaid identified 11 priority measures for value-based purchasing contracts, providing primary care-centric goals for the state.

This year, the NAFP worked with the state legislature’s insurance committee to require Nebraska health plans to calculate and report primary care spend rates. A prior analysis of Medicare primary care spend rates among Nebraska health districts showed an average of 5.1 percent, ranging from 2.4 percent to 7.6 percent. Variation correlated with health outcomes. While Nebraska has marked urban/rural health disparities, geography is not destiny: Some rural areas, such as Albion, have among the state’s highest cancer screening rates, supported by above-average primary care spend rates.

Existing value-based purchasing contracts through Medicare and Blue Cross Blue Shield have resulted in primary care spend rates of 10–13 percent, while also lowering overall health care costs. This level of investment has supported the addition of care coordinators and diabetes educators, and allowed protected time to achieve organized quality improvement. If these strategies were expanded, Nebraska could improve its standing in America’s Health Rankings, reduce health disparities, and lower health care costs.

The Federal Government Must Support And Follow State Leadership On Primary Care

While our federalist system makes states into laboratories of policy experimentation, states need federal partnership. To support state’s primary care improvement efforts, the federal government should take the following actions:

  • Remove barriers that limit state action and create incentives for providers to pursue careers in primary care: Reform graduate medical education financing, expand and make permanent the Teaching Health Center Program, and move primary care training out of hospitals and into communities.
  • Set a target for primary care spending in Medicare and encourage state-administered Medicaid programs to follow suit.
  • Provide resources to improve the practice of primary care and reinstate federal funding for primary care practice improvement, especially for independent practices, rural practices, and in primary care shortage areas.
  • Revisit current approaches to Medicare payments for critical access hospitals and rural health clinics, which create misaligned incentives and preclude state participation in Innovation Center initiatives.

Acting on the NASEM’s recommendations can help ensure nationwide progress on primary care. The Department of Health and Human Services should establish a Secretary’s Council on Primary Care to assure action and accountability, and create an Office of Primary Care Research at the National Institutes of Health to provide dedicated research funding. State innovation can scale when supported by thoughtful national policy.


Strengthening primary care benefits everyone by improving overall health and lowering health care costs. By improving how the health care system connects with patients, generalists and specialists can support the patients who need them most, when they need them the most. This will make our health care system more efficient and improve patient experience by making care more accessible and responsive—ultimately improving health and increasing equity.

It’s time to expect and get more from health care; it’s time to invest in primary care.

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