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Study Links Higher Primary Care Spending to Better Care Quality in California

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A new study of eight health plans and their product offerings, covering 80% of commercially insured adults in California (13.9 million), finds greater investment in primary care is associated with better quality medical care and fewer hospital visits. Investing in Primary Care: Why It Matters for Californians with Commercial Coverage finds that primary care spending, as a percentage of overall spending, varied widely among the health plan products, from a low of 4.9% to a high of 11.4%. The research was conducted by Integrated Healthcare AssociationOnpoint Health DataRAND Corporation, and Bailit Health Purchasing with support from the California Health Care FoundationCovered California, and the Milbank Memorial Fund.

The study also took a deeper look at the primary care spending patterns of 180 separate provider organizations, comprising 8.5 million adults enrolled in HMO plans, or about half of California’s commercially insured adults. There, larger investments in primary care were associated with better clinical quality and patient experience, fewer hospital and emergency room visits, and a lower total cost of care. To measure 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 met diabetes care goals.

The researchers suggest that if provider organizations in the lower brackets of primary care spending matched those in the highest bracket of spending, 25,000 acute hospital stays could be avoided, 89,000 emergency room visits could be avoided, and $2.4 billion in overall health care spending could be saved in a single year. What’s more, a greater share of health consumers would likely rate their care highly and receive higher quality care.

This study is the first analysis of health plan-level primary care investment in California and also the first to delve into primary care spending at the provider organization level, allowing for more granular analysis on the impact of primary care on quality and cost.

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