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Analysis

Primary Care Accounts for Small Percentage of Total Healthcare Spending

By Christopher Cheney  
   May 18, 2020

New research shows that primary care accounted for 5.4% of total healthcare expenditures in 2016.

From 2002 to 2016, spending on primary care lagged far behind other healthcare expenditures, a new research article says.

Relatively low spending on primary care is a contributing factor in U.S. healthcare underperforming compared to health systems in other advanced industrial countries. Nations with better access to primary care and superior primary care services generate better health outcomes at lower costs.

The new research article, which is based on Medical Expenditure Panel Survey data, generated several key data points:

  • From 2002 to 2016, total healthcare spending increased from $810 billion to $1.6 trillion
     
  • Inpatient services were the highest spending category in 2016 at $415 billion, accounting for 25.7% of total expenditures
     
  • Prescriptions accounted for the highest increase in spending from 2002 to 2016, accounting for 28.6% of increased healthcare expenditures
     
  • Emergency medicine was the lowest spending category in 2016 at $62.5 billion, accounting for 3.9% of total expenditures
     
  • Primary care was one of the lowest office-based and outpatient spending categories in 2016 at $87.1 billion, accounting for 5.4% of total expenditures
     
  • Subspecialty care was the highest office-based and outpatient spending category in 2016 at $266.4 billion, accounting for 16.5% of total expenditures

"We found that spending on inpatient services, specialty care, and prescriptions combined accounted for about two-thirds of the increase in total U.S. healthcare expenditures from 2002 to 2016. In contrast, primary care accounted for 4.2% of the total increase in healthcare expenditures, while declining as a proportion of all expenditures," the research article's co-authors wrote.

The data illustrates the need to invest more resources in primary care, they wrote. "There are many reasons to increase investment in primary care, including its beneficial effects on quality of care, access to care, and mortality. Our results bring attention once again to the many opportunities in the U.S. to increase spending on primary care."

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


KEY TAKEAWAYS

From 2002 to 2016, total healthcare spending increased from $810 billion to $1.6 trillion, according to Medical Expenditure Panel Survey data.

Inpatient services were the highest healthcare spending category in 2016 at $415 billion, accounting for 25.7% of total expenditures.

Prescriptions accounted for the highest increase in spending from 2002 to 2016, accounting for 28.6% of increased healthcare expenditures.


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