How one US state saved $240 million in health care spending

It’s Oregon! This is Portland, and Mount Hood.
It’s Oregon! This is Portland, and Mount Hood.
Image: Reuters/Steve Dipaola
We may earn a commission from links on this page.

Investment in primary care results in savings in overall health care spending. This has been empirically proven in the state of Oregon. Current innovation in Oregon provides a real world example that can be studied by policy makers, insurers, health care organizations, and consumers for reform and health systems improvement advocacy. After all, if someone has identified what is effective, why reinvent the wheel?       

Health care spending in the United States in 2016 was $3.4 trillion, or 17.8% of GDP. By the year 2025, spending in the US is expected to reach 19.9% of GDP. This cost trajectory is unsustainable. Furthermore, it is ineffective. What are we getting in return for spending more money on health care than any other developed nation in the world? Perhaps not much. Though the United States spends more money on health care services than any other country, our health outcomes leave much to be desired. Management of diabetes, asthma, and safety during childbirth in the US is among the worst in the world. Whatever is being done is obviously broken. And, continued status quo thinking, and the recycling of failed experiments, is like rearranging the deck chairs on the Titanic while it sinks. 

If mere spending were the solution, the US would have the best care and outcomes compared to any nation. Such is not the case. Why? Health care spending in the US generally promotes utilization of services—apart from outcomes—as opposed to effective, proactive, whole-person care. This is akin to a mechanic getting paid to touch or manipulate a car without actually repairing it—or, inspecting and repairing a transmission after the gears no longer shift, rather than address early warning signs, or perform routine maintenance. 

There is a better way. In 2009, the Oregon legislature established the Patient-Centered Primary Care Home (PCPCH) program. This is a voluntary program through which primary care clinics can receive recognition for implementing standards of care from a tiered menu. A diverse group of health care professionals from around the state met to design the standards. Since that time, dedicated teams of professionals in Oregon have devoted resources to implementing the PCPCH Program standards in their daily operations.

As of the writing of this article, there are over 600 clinics in Oregon with PCPCH recognition. The foundation of the PCPCH model consists of 6 Core Attributes that promote care which is: accessible, accountable, comprehensive, continuous, coordinated, and patient- and family-centered.

What has been achieved since implementation of the PCPCH program in Oregon? Excellent question. Here are the most recent findings from a multi-year study from Portland State University: 

  • $240 million in savings in the first three years of the program. 
  • $41 savings per patient, per quarter.
  • Every $1 increase in spending in primary care resulted in $13 in savings in overall spending. (Full report.)

And, it is not just Oregon that is excited about the Portland State University findings. The PCPCH program is catching the interest and attention of organizations overseas—namely in Australia and South Korea. In 2015 and 2017, health care professionals from Australia visited the PCPCH program in Portland. And in April 2018, an even larger group of Australian visitors plans to visit for a third time, representing professionals affiliated with WentWest and the Australian Healthcare & Hospitals Association. Additionally, in the summer of 2017, physicians in health care leadership positions from Seoul University National Hospital visited the PCPCH program. They have plans to return in 2018 for an extended, in-depth stay to learn more about the innovation occurring in Oregon.        

Here is a brief peek under the hood of the PCPCH Program structure and operations:

The PCPCH program lives within the Transformation Center, which is the hub for innovation and quality improvement for Oregon’s health system transformation efforts to achieve better health, better care and lower costs for all. To obtain recognition, a primary care clinic must submit an application and supporting documentation via an online portal. Once the application and documentation are reviewed and approved by program staff, the clinic receives PCPCH recognition at a given tier level. There are 5 tiers, with tier 1 being the most attainable and basic, and tier 5 (or, 5 STAR) being the highest and most challenging to achieve. 

Once a clinic formally receives PCPCH recognition, the clinic is also required to have an onsite, at-the-clinic visit conducted by PCPCH team members within five years. The purpose of the site visit is twofold. First, to verify the clinic has implemented the operations it attested to in its application and, second, to explore opportunities for the PCPCH team to support the clinic in its improvement efforts. The PCPCH site visit team doesn’t just show up at the clinic, point out deficiencies, then wish the clinic all the best. To the contrary, the team uses visits as an opportunity to engage, support, and build a working relationship with the primary care practice in its improvement efforts. There is no fee for the application, site visit, or post-visit support. (For more information on the PCPCH site visit process, check out this webinar.)   

Investment in primary care results in cost savings. There is strong evidence to support this. Consequently, primary care must be an integral part of any truly effective health care reform strategy. Health care policy, payment, and delivery design need to be consistent with that to which the evidence points. And, the evidence points squarely at primary care.