COVID-19 has placed additional burdens on our already-strained primary care system. Patients struggle to access care and frequently do not have their needs met, while primary care providers (PCPs) face increasing administrative burden and burnout. During the pandemic, fewer patients sought care while pandemic-related costs for practices increased, putting the primary care system at risk when we need it most. In a recent national survey of primary care providers, less than 30 percent of them said their practice was financially healthy and 29 percent knew of practices that had closed.

This is particularly concerning because accessible, quality primary care is the foundation of a high-performing health care system. Decades of evidence shows that primary care is associated with decreased hospitalization, higher patient satisfaction, and greater equity in health outcomes. When practices close, people most in need of primary care services are at risk for worse health outcomes. Recognizing the importance of primary care and the need to address these challenges during a continuing pandemic, policymakers, providers, and experts are increasingly calling for changes to strengthen the system.

Primary care is at a financial disadvantage relative to the rest of the health care system. PCPs are paid less than specialists, despite providing a wider range of services. Spending on primary care has trended downward in the past several decades, from an estimated 6.5 percent of total health care expenditures in 2002 to 4.7 percent in 2019 — meaning the U.S. spends about one-third what other high-income countries do (14%). The gaps in compensation and undervaluing of primary care services is creating a PCP shortage, as more physicians entered higher-paying specialties over primary care. This shortage could mean even poorer access and quality of primary care, particularly for already-underserved populations.

In addition to this chronic underinvestment in how much we pay for primary care, how we pay also has created challenges. Currently, fee-for-service payments, through which providers are retroactively paid a set fee for each service they provide, dominate primary care. This volume-based payment approach incentivizes PCPs to provide more care, administer high-priced services instead of low-priced services, and see as many patients as they can in a day. The fee schedule focuses predominately on medical services, limiting the nonmedical services (e.g., care coordination or screening for social determinants of health) PCPs provide and can be expected to be paid for. The reliance on fee-for-service is part of the reason primary care experienced such a massive financial toll throughout the pandemic; as patient volume and service provision decreased, so did provider payments, causing practices to lose money or shutter.

The National Academies of Sciences, Engineering, and Medicine and the Commonwealth Fund Task Force on Payment and Delivery System Reform have called for a shift from volume-based to value-based payments that incentivize and hold health care providers accountable for the quality, equity, and cost of care. This shift in how we pay for primary care should be complemented with overall investment increases in primary care. This is not the first call to reform primary care payment reform, but recent financial burdens, the workforce shortage, and a pandemic that has pushed primary care to its limit have led experts to conclude that this is an essential moment to reform primary care payment in the following ways:

  • How we pay for primary care. Value-based payments integrate population-based, prospective payments, which hold providers accountable for the cost, quality, and equity of care, into the fee-for-service structure. Experts recommend fee-for-service approaches for high-value services, like immunizations, while using population-based, prospective payments for everything else, including services not often reimbursed under the fee schedule, like screening for and addressing social and behavioral health needs. This approach has the added benefit of offering predictable payments. This can shield providers from financial losses, like those associated with the COVID-19 pandemic, by ensuring payments regardless of visit volume for a payment period.
  • How much we pay for primary care. To increase investment in primary care, experts recommend revisiting the Medicare fee schedule, which sets Medicare reimbursement rates but is adapted by most other payers. Medicare receives recommendations from an external committee that is dominated by specialists and whose methodology is not transparent; CMS accepts nearly all recommendations from this committee. The committee largely overvalues services provided by specialists, like surgeries, while undervaluing common primary care services, like office visits.

To meaningfully revitalize primary care and realize population health improvements, policymakers may reconsider, first and foremost, how we pay for primary care, and how much.