Report shows primary care spending on the rise, but not as fast as other areas of health care spending

Feb. 3, 2020

Statement from Jeremy Vandehey, Health Policy and Analytics Director

SALEM, Ore. – A joint report from the Oregon Health Authority and Department of Consumer and Business Services shows that spending on primary care as a percent of total medical spending in Oregon decreased slightly in 2018. However, overall spending on primary care increased. This means spending in other areas such as specialty care and hospital-based care is growing faster than primary care spending.

“While overall spending on primary care increased, it didn’t keep pace with ballooning costs in the rest of the health care system like hospital and specialty care,” said Jeremy Vandehey, director of health policy and analytics at OHA. “Those quickly growing costs are resulting in rising out-of-pocket costs for Oregonians and threaten the ability to invest in prevention and access to other critical services like mental health care. This is why Oregon is implementing a statewide health care cost growth target – to contain costs across the whole system and refocus on investing in services that keep people healthy and out of the hospital.”

More than $1.5 billion was spent on primary care by coordinated care organizations (CCOs) and prominent insurance carriers in 2018. On average, Oregon’s CCOs spent the highest percentage on primary care spending at 15.5 percent. Commercial insurers spent 13.2 percent, followed by PEBB/OEBB at 12.3 percent, and Medicare Advantage at 10.3 percent.

Research indicates that availability of primary care providers is associated with improved health outcomes, including reduced mortality rates, reduced rates of low birth weight and preventable hospitalizations, and increased self-rated health status. Senate Bill 934 from the 2017 legislative session required health insurers and coordinated care organizations to allocate at least 12 percent of health care spending to primary care by 2023.

The report also includes information about the percent of primary care spending that was not fee-for-service based, which includes incentive payments, payments for programs recognized as providing good clinical care, and payments to help providers adopt health information technology such as electronic medical records.

The health care payers in the report cover approximately 2.5 million Oregonians, which was about 59 percent of the state’s population in 2018.