Policy Bite. PHC funding a percent of total health care spending

August, 2017


This month's guest policy bite comes from the American Board of Family Medicine and the Robert Graham Center, in the USA. The ABFM is the national certifying board for nearly 90,000 family physicians. The Graham Center is a research center which aims to improve individual and population healthcare delivery through the generation or synthesis of evidence that brings a family medicine and primary care perspective to health policy deliberations from the local to international levels. Both organizations frequently collaborate on research that informs primary health care, population health, and health policy.

The Paper

Primary Health Care as a Foundation for Strengthening Health Systems in Low- and Middle-Income Countries(1),
specifically, Is primary health care adequately funded to ensure access, provide protection against catastrophic expenditures, and ensure equitable use of resources?
Link to the paper

The message:

The World Bank, World Health Organization, and Gates Foundation led an effort called the Primary Health Care Performance Initiative (PHCPI) to catalyze improvements in PHC delivery. While targeted at low- middle-income countries, PHCPI is also looking to support the same in developed countries.

Of the initial 25 measures, or “Vital Signs”, one of the developing foci is on primary health care funding. One measure that the developers are testing is primary care spend and efficiency. In cooperation with the Organization for Economic Cooperation and Development (OECD), researchers and economists are attempting to assess the share of health spending on the primary are sector. Some have suggested that a good target for this is 10-12% of total health care spend.(2)

Not all OECD countries capture sufficient data for this effort, but a forthcoming report of a joint session of health accounts experts and health data national correspondents on primary health care spending and efficiency suggest that it ranges from 5% (Canada) to nearly 15% (Austria, Mexico). A related initiative in the US supported by the Milbank Memorial Fund and conducted by RAND found that private insurers, on average, spend 7.7% on primary care, but that this rate varies considerably.(3)  Both efforts are still refining what to include in the calculations, but both are likely to reveal that the setting in which the majority of people receive health care—and the setting in which performance often dictates downstream costs—is woefully underfunded in most countries relative to other healthcare settings. This may be one of the more controversial and important measures to come out of the Vital Signs project.

- What was the context that made you write this paper?

Growing recognition that primary care is generally underfunded to achieve the outcomes that most health systems want for their population. These reports will offer a first opportunity to begin to relate health system investments to the variations in country outcomes.

- Why does it matter for patients?

High-functioning primary care generally improves patient health and cost outcomes. Overemphasis and investment in subspecialty health care services and technologies is the tendency in developed countries.

- What should GP / FM leaders do to implement it?

The PHCPI Vital Signs should have broad application in all countries and GP/FM leaders should pay close attention. The opportunity that the primary care spend figures offer is improved research on the relationship between spend and outcomes, particularly on what the investments support that might explain variations in outcomes. This will provide added evidence that could support increased investments in primary care, as well as highly effective services on which to spend them.

The Authors

Robert Phillips MD MSPH and Andrew Bazemore MD MPH

Robert Phillips is the Vice President for Research & Policy for the American Board of Family Medicine. He graduated from the Missouri University of Science and Technology and the University of Florida College of Medicine. He completed family medicine training and a two-year health services research fellowship at the University of Missouri. Dr. Phillips directed the Robert Graham Center, 2004-2012. He served as vice chair of the US Council on Graduate Medical Education, and currently serves on the National Committee on Vital and Health Statistics. Dr. Phillips is Professor in the family medicine departments of Georgetown and Virginia Commonwealth Universities. He was a Fulbright Specialist to the Netherlands and New Zealand, and is a member of the National Academy of Medicine.

Andrew Bazemore is a practicing Family Physician and the Director of the Robert Graham Center for Policy Studies in Washington DC. Dr. Bazemore has authored over 150 peer-reviewed publications, a developer of novel geospatial tools that use data to inform planning and policy, and on faculty at Georgetown University, VCU, and the University of Cincinnati. Dr. Bazemore received his BA degree from Davidson College, his MD from the University of North Carolina, and his MPH from Harvard University. He is an elected member of the National Academy of Medicine(NAM), and appointed member of the federal Council on Graduate Medical Education (COGME)

Contact details

Email: [email protected]
Twitter: @theABFM


1. Bitton A, Ratcliffe HL, Veillard JH, et al. Primary Health Care as a Foundation for Strengthening Health Systems in Low- and Middle-Income Countries. Journal of General Internal Medicine. 2016:1-6. accessed here
2. Phillips RL, Bazemore AW. Primary Care And Why It Matters For U.S. Health System Reform. Health Affairs. 2010;29(5):806-810.
3. https://www.milbank.org/publications/standardizing-measurement-commercial-health-plan-primary-care-spending/

REPORT: Standardizing the Measurement of Commercial Health Plan Primary Care Spending.
by Michael H. Bailit, Mark W. Friedberg, and Margaret L. Houy