Report: Primary Care Spending Up But Specialty, Hospital Care Bill Higher

Overall spending on primary care in Oregon increased in 2018, but growth in specialty and hospital care grew even more, eating up an even bigger piece of the health care economy, according to a state report released Monday. 

The takeaway: rising costs of health care are leaving Oregonians shouldered with soaring out-of-pocket costs, hampering efforts to invest in prevention care or other crucial needs, like mental health care. The joint report came from the Oregon Health Authority and Department of Consumer and Business Services. 

The report looked at the spending of health care payers representing about 2.5 million Oregonians, about 59% of the state’s population. 

The findings coincide with the work of a high-profile committee that’s tasked with setting a statewide health care cost growth target. The target is intended to rein in soaring health care costs and keep the health care system sustainable. 

“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,” Jeremy Vandehey, director of health policy and analytics at the authority, said in a statement. “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.”

Primary care spending is an important gauge for the health system because it can prevent more expensive, complicated medical problems in the long-term that require a trip to the emergency room or advanced care. In general, primary care can improve mortality rates and overall health.

"We've definitely seen that primary care plays a critical role in containing overall costs but what I think this shows is you've got to do both," Vandehey told The Lund Report, referring to controlling specialty and hospital costs.

The report represents the spending of prominent health insurance carriers with an annual premium income of $200 million or more, offering commercial or Medicare Advantage plans; Medicaid coordinated care organizations; and health insurance plans contracted by the Public Employees’ Benefit Board and Oregon Educators Benefit Board.

In all, more than $1.5 billion was spent on primary care by coordinated care organizations and commercial carriers in 2018. That’s not quite 10% of $11.6 billion in total spending.

Individual carriers and plans vary widely in how much goes toward primary care. Coordinated care organizations spent the highest share on primary care, averaging 15.2% of total health care spending, the report said. Coordinated care organizations varied widely in how much went toward primary care. Willamette Valley Community Health, the state’s second-largest coordinated care organization in 2018 with nearly 100,000 people enrolled, had the highest share: 22.6%.

Columbia Pacific CCO came in last with 10.6%, the report said. The report had data for all 16 coordinated care organizations except for FamilyCare, because it served Oregon Health Plan members for just one month in 2018.  

Commercial insurers spent 13% on average. That varied from a low of 9.1% to a high 15.6% among carriers. Kaiser Foundation Health Plan of the Northwest had the highest share of spending on primary care and Health Net Health Plan of Oregon, Inc., had the lowest. 

Meanwhile, PEBB/OEBB put 12.3% toward primary care. Individual PEBB and OEBB plans varied from 11.1% to 15.5%, the report said. 

Medicare Advantage plans spent 10.3% on primary care, according to the report. Individual Medicare Advantage plans ranged from 4.3% to 16.6%.

Oregon’s health officials and industry executives are planning to set a target for health care growth through the Sustainable Health Care Cost Growth Target Committee. Tasks still ahead for the committee’s Feb. 12 meeting include picking the economic indicators that will be used to set the target. The target, and how it will be enforced, are other pieces still in the pipeline. 

Vandehey said: “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.”

Policymakers have recognized the need for primary care to take a larger share of spending. Senate Bill 934, passed in the 2017 session, requires health insurers and coordinated care organizations to spend at least 12% percent of health care spending on primary care by 2023.

"For the first time, we're measuring primary care dollars across the entire health care system," Vandehey told The Lund Report. "The next step is going to be doing that for the rest of the health care system. ... We've got to get those other costs under control in order to be able to shift the investment to primary care and behavioral health."

You can reach Ben Botkin at [email protected] or via Twitter @BenBotkin1.


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