California health officials discuss 10-year plan for primary care spending

By

Hannah Saunders

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The Department of Health Care Access and Information (HCAI) held its Health Care Affordability Board (HCAB) meeting last month to discuss a draft of the 10-year primary care spending plan it is working on with the Office of Health Care Affordability (OHCA). OHCA was established within the HCAI in June 2022 after Senate Bill 184 was signed into law. 

OHCA is tasked with slowing down the growth of healthcare spending statewide, ensuring that healthcare is accessible, and promoting high-value care. Current and historic primary care spending benchmarks were considered in the development of the plan, which will set California on a path towards increasing primary care spending. That is intended to increase the rates of primary care utilization, and decrease rates of hospital and emergency department visits. 

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Margareta Brandt, assistant deputy director at HCAI, said primary care investments in the U.S. generally range from four to seven percent, which falls behind other high-income nations with different healthcare systems. Brandt said other countries invest 12 to 15 percent of their total spending on primary care. 

“In 2020, a national study found primary care investment was about 6.3 percent of total spending across all payers, compared to 4.6 percent nationally, and that primary care investment nationally tends to range from four to seven percent,” Brandt said.

Increasing primary care investments can assist with creating a robust system of primary care that helps keep Californians healthy, while creating a sustainable healthcare system, Brandt said.

The drafted plan suggests tracking money payers have paid to providers for primary care services. The money providers spend while delivering primary care services is not currently tracked.

Primary care spending falls under three benchmarks: primary care paid through claims, like a combination of primary care providers, service, and place of service; primary care paid via non-claims, like allocating a portion of non-claims spent to primary care; and behavioral health in primary care, like screening, office visits for behavioral health diagnoses with primary care physicians, counseling or therapy with these physicians, or integrated behavioral health. 

“We plan to include claims-based spending when a primary care provider provides a primary care service in a primary care setting, so all three of those components must be met for the spending to count towards the investment benchmark,” Brandt said. 

Hospital care makes up 38 percent of California’s total healthcare spending. Between 2019 and 2021, California commercial plans spent an average of 7.3 to 9.9 percent of the state’s total healthcare spending on primary care services. HCAI hopes to increase primary care spending by 0.5 to one percentage point per year, depending on current investment levels. 

The 2034 investment benchmark encourages California to allocate 15 percent of total medical expenses to primary care by 2034 across all payers and populations. Brandt said those who invest more funding in primary care tend to spend less on hospitalizations and avoidable emergency department visits. 

HCAB members said there are many things to consider with the plan, and will continue its work during this month’s meeting. 

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