HATCo CEO Marc Harrison on the acquisition of Summa Health

Primary Care

Does Investing in Primary Care Lead To Lower Total Costs?

The idea that increasing investment in primary care will reduce costs down the road makes intuitive sense, but a recent article in Health Affairs suggests that there’s “limited evidence that directly ties higher primary care spending to lower total spending.”

Primary care is the foundation of an effective healthcare system, with plenty of evidence supporting downstream benefits like fewer ED visits, hospital stays, and better outcomes.

• The secret sauce behind those benefits is the long-term relationships between patients and their PCPs, which brings a healthy dose of cohesiveness to otherwise fragmented care journeys.

• Despite primary care’s effectiveness, it only sees 5-7% of total U.S. healthcare spending, prompting over a third of states to pick up the slack with their own investments.

Now for the bad news. Better outcomes are obviously a worthwhile aim, but unfortunately most stakeholders would rather see savings to justify increased investment in primary care.

• Studies of Massachusetts’ Alternative Quality Contract and Rhode Island’s affordability standards – both examples of primary care investment that showed a slowdown in spending after several years – found that the savings were more closely tied to limits on price and total spending, rather than primary care itself.

Where does that leave us? Although it’s proven difficult to draw a straight line between primary care and its financial impact, some common threads are emerging between states that have tried.

• Accountability: States that rely on transparency and public pressure to increase primary care investment have generally been less successful than those that require payors to foot the bill. Provider orgs should also be held accountable for ensuring these investments reach primary care in tangible ways. The shared responsibility creates multi-stakeholder engagement.

• Long-term Lens: The benefits of high quality primary care accrue over time. Expectations for returns, shifting payor membership, and political winds don’t offer systems and payors enough patience for new policies to achieve their goals, so strong state leadership needs to sustain a long-term view.

• Sufficient Investment: Investments need to adequately fund advanced primary care capabilities that can actually improve the delivery of care and outcomes of interest.

The Takeaway

Primary care is the undeniable cornerstone of our healthcare system, and there’s a growing recognition that we should redirect more investment toward ensuring that it’s high quality and readily accessible. Policy makers need more evidence to support those investments, and articles like this one help get the ball rolling in that direction.

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The Wire

• HATCo Acquires Summa for $485M: General Catalyst’s HATCo laid another brick along healthcare’s path to a tech-enabled future by signing a $485M agreement to acquire Ohio-based Summa Health. The acquisition was originally announced in January and arrives just in time for HATCo’s year-end target for landing its first health system – although they’re still waiting on regulatory approval. Once that gets here, Summa will begin integrating solutions from GC’s portfolio companies throughout its acute, critical, outpatient, ED, and home care services.

• RPM Companies Catch a Break: The American Medical Association just showed some love to RPM companies. Starting in 2026, CPT codes for remote physiologic monitoring will no longer require 16 days of continuous monitoring within 30 days to qualify for reimbursement. This was music to providers’ ears, who have been arguing that it’s difficult to get patients to use devices like connected blood pressure cuffs every other day, especially if that much data isn’t necessary to deliver proper treatment. 

• Rising Costs, Sinking Benefits: An NAHPC report found almost three-fourths of employers believe that spending on healthcare benefits will soar by 8-9% in 2025, leading to wage trade-offs and more cost-shifting to employees. Nearly all employers surveyed (99%) believe rising drug prices due to high demand for GLP-1s are a significant threat, followed by high-cost claims and hospital-related expenses. This stems in part from only 46% of employers covering GLP-1s for obesity, while another 21% are considering coverage in the next three years.

• XRHealth Acquires NeuroReality: XRHealth ventured deeper into the medical metaverse by acquiring cognitive training VR company NeuroReality and its flagship rehabilitation product, Koji’s Quest. The acquisition expands XRHealth’s catalog of immersive medical extended reality experiences with more physical, emotional, and cognitive rehab offerings. It also follows last year’s acquisition of Amelia Virtual Care, a VR platform which allows mental health providers to connect directly with patients. 

• LLMs Don’t Enhance Medical Reasoning: The AI hype wagon ran into a speedbump after a JAMA study found that GPT-4 doesn’t enhance clinicians’ diagnostic reasoning ability. Physicians were given an hour to review six vignettes using either conventional resources and GPT-4 or conventional resources alone. The average diagnostic reasoning score was 76% for the LLM group and 74% for the conventional group, with the LLM group achieving only a 46 second edge in time spent per case. 

• Ballad Deploys MedAware: Building on their up-and-running partnership, Ballad Health will use MedAware’s AI-enabled medication dose intervention platform to improve its personalized risk monitoring for acute care patients. The pharmacy team at Ballad will be the first to natively employ MedAware within an Epic pharmacy workflow, combining novel algorithms and clinical review to deliver patient-specific medication risks and allow care teams to intervene before issues escalate.

• The Dangers of Nurse Burnout: The impact of burnout isn’t just felt by nurses, it also ripples toward the patients they work with. A meta-analysis published in JAMA found that nurse burnout was associated with lower patient satisfaction ratings, but not with the frequency of patient complaints or abuse. Fatigued nurses were also linked to worse safety grades, as well as more patient falls, hospital-acquired infections, and medication errors.

• Infant Diet Digital Intervention: Encouraging results from a JAMA study showed that digital health literacy interventions can improve child nutrition and reduce obesity in the first 24 months of life. Researchers compared clinic-based health behavior counseling for 451 new parents to a group of 449 parents that also received personalized text messages and a web-based dashboard to support infant health goals, which resulted in a mean weight-for-length reduction of 0.33 kg/m over the two year study period.  

• Grant Grabs Majority in PHM: Grant Avenue Capital invested $55M into medical equipment provider Performance Home Medical to address the 80M people who will age into Medicare by 2030, many of whom will need home care and services. The transaction impacts over 70,000 patients in more than 20 locations across Washington, Oregon, and Idaho, while also marking Grant Avenue’s fourth healthcare carve-out since its founding in 2017. 

• Employer Healthcare Slowdown: Fewer small employers are offering health benefits, despite worker eligibility remaining relatively stable. An EBRI report found that the percentage of working age adults with employer health benefits now stands at 60% (down from 70% in the 1980s), though it remains the most common source of nonelderly health coverage. Less than half of employers offered health benefits in 2023, a record low driven entirely by decreases among companies with less than 25 employees.

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The Industry Wire

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• CDC: one in five adults experience anxiety or depression.
• Man gets 2 years in prison for accessing Justice Ginsburg’s EHR.
• Aetna and Optum settling ‘dummy code’ class-action lawsuit.
• Ex “Sesame Street” exec to lead St. Jude Children’s fundraising marketing.
• Medicare-focused payors stocks surge after Trump.