Primary care spending boost and capitation didn’t work in private plans either

The big idea circulating in some CT health policy circles to control the costs of healthcare is to boost primary care with tons of money and capitate provider payments. Primary care is regular health care for prevention, like check-ups, and common health problems. A new study finds that the idea failed in private insurance, as it has failed in Medicare.

The first part of the idea is to double per person primary care spending in our state, costing $3.9 billion, expecting that it will be more than covered by reductions in other healthcare spending. Unfortunately, spending more on primary care doesn’t save money. It may or may not be the right thing to do, but it doesn’t save money. The second part is to “empower” primary care providers by giving them a large flat fee (capitation) to care for their patients. The idea was that providers could offer more flexible services, as needed. The problem is that it hasn’t worked in Medicare, despite many years and tax dollars invested. The state’s Primary Care Roadmap plan for the entire state promotes capitation in 31 places. Deep concerns have been raised by advocates about the idea.

The new study found that CPC+, Medicare’s latest test of boosting primary care funding and control, didn’t change either total healthcare spending. As the analysis didn’t consider subsidies, care management fees, or implementation costs, the program raised costs in the program. It also didn’t improve the quality of care for millions of privately insured patients. More time is unlikely to help, as performance didn’t improve over the five years of the program.

If we want to improve primary care, we can pay for it directly and hold providers accountable for quality with meaningful incentives. But primary care is only part of the picture and expecting over-worked providers to solve all the problems in healthcare is not realistic. We also need to invest in proven public health innovations that keep us healthy and prevent illness and address social factors that undermine health such as personal safety and economic security. It would be nice if tweaking incentives was a magic wand, but fixing healthcare is going to be much harder than that.