Needs Assessment & Resource Allocation:
Translating goals into primary care programs
This is the second in a series on the nine Key Levers that determine whether state primary care investment strategies succeed or fail.
Peter A. Wadsworth has spent his career at the intersection of finance, management, and healthcare policy at organizations including IBM, McKinsey & Company, Kidder, Peabody & Co., Blue Cross Blue Shield and the public sector. He is co-founder of the Better Healthcare Policy Group.
Key Points
This is the second in a series of articles on the nine Key Levers of primary care investment. The first was Maximizing Primary Care Investment Value: A Framework for State Leaders.
- Needs Assessment is not an academic exercise: withResource Allocation, it turns unmet statewide needs into priorities, resource requirements, and practical program choices.
- Competing program choices should be judged by expected value: health outcomes, avoidable use of hospital-based services, population affected, per-capita cost, and resource requirements.
- The growing shortage of primary care professionals is the most urgent need; primary care investment goals can’t be achieved without a realistic plan to close that gap.
Introduction
Most states and healthcare professionals nationwide already recognize that we face a significant and growing shortage of primary care professionals: physicians, nurse practitioners, physician assistants, and the broader clinical workforce that delivers frontline care. Far less prevalent are evidence-based plans to address it. Most states are trying to achieve lower avoidable mortality and morbidity, better access to care and lower utilization of high-cost health services. What separates a state spending target from an effective primary care initiative is knowing where and how to direct the financial and other resources based on priorities that a needs assessment demonstrates will produce the greatest return on investment.
A rigorous Needs Assessment and Resource Allocation Plan is one of the most critical components of any serious primary care strategy and one of the hardest to do well. California, Oregon, Rhode Island, and Delaware are already doing this work, and other states may have analytical groundwork that could serve as a strong foundation.
This article examines what a rigorous Needs Assessment and Resource Allocation Plan should look like, why it is indispensable, and what it must deliver to turn recognition of the problem into a credible path toward realizing the expected benefits and potential offsetting savings of substantial new spending. Its purpose is not simply to document unmet need, but to give public officials the information they need to compare alternatives, set priorities and allocate resources in ways that are defensible and deliverables.
Needs Assessment & Resource Allocation: Maximizing Value
States have been producing population health assessments, social determinants of health analyses, and health equity studies for years. When this analytic work is used in a primary care Needs Assessment and Resource Allocation Plan, it must go further than just describing needs, identifying and evaluating alternative solutions. A rigorous Needs Assessment and Resource Allocation Plan entails at least three distinct but interrelated analytical tasks:
- Identifying population needs, where access gaps exist, which communities carry the greatest burden of unmet need, and what types of care are most underdelivered.
- Identifying potential solutions: the interventions, workforce investments, delivery system changes, and resources that could realistically address those needs, including where provider shortages exist, what it would take to place and retain providers in underserved areas, and whether existing practices have the infrastructure and support they need to succeed.
- Determining the relative value of alternatives. Given finite resources and defined objectives, the Needs Assessment must compare alternatives by asking which options are likely to produce the greatest impact. State executives and legislators will need to know how many people each alternative can reach, how much it is likely to reduce avoidable mortality, morbidity, hospital utilization, and downstream costs, and what each alternative will cost in aggregate.
With that kind of evaluation of alternatives, states can begin to build a budget and allocate resources (see next section) starting with the highest‑priority alternatives.
The author is a proponent of evaluating state healthcare system performance through a small set of Measures of Effectiveness, including Treatable Mortality, Unhealthy Days, potentially avoidable ED visits and hospital admissions, and per-capita cost. Other measures may also be appropriate when they reflect the stated goals and objectives of a state’s primary care initiative and are available on a comparable statewide basis.
The Resource Allocation Plan
Many good ideas will be competing for the same finite pool of resources. This is where budget decisions, staffing decisions, committee structures, and sequencing of priorities get made. The Needs Assessment and Resource Allocation Plan is the tool that makes those decisions defensible rather than political. That requires sizing requirements honestly across four resource categories.
Multi-year Budgets & Capital Financing
New primary care investment involves two fundamentally different kinds of financial commitment. Fiscal year spending is typically authorized by the legislature and can vary significantly from year to year. Capital investments, on the other hand, for buildings, training pipelines, infrastructure, technology, and organizational capacity, are by definition multi-year commitments that must be approved in advance. Current state strategies almost always blur this distinction. The Needs Assessment and Resource Allocation Plan should make this distinction explicit from the outset.
Primary Care Staffing: the longest lead time of any resource category
The human capital required to deliver care at the scale population need demands must be quantified: by profession, by geography, by population group served. This is not a simple headcount exercise. It requires understanding where professionals are now, where they are not, and what the gap looks like when sized against genuine access goals — not just population growth projections. Because training timelines are measured in years, not months, this is the resource category where delay is most costly. It is addressed in depth in the section that follows.
Organizational bandwidth
Even well-designed strategies can outrun the capacity of the governance structures assigned to execute them. Task forces, subcommittees, and working groups all have finite bandwidth. Not every good idea will get addressed in every planning cycle, and the allocation process must reflect that honestly. Identifying organizational capacity constraints as part of the Needs Assessment is a mark of a mature planning process.
Political authorization
Legislators and regulatory bodies can absorb and act on only so many issues at once. A comprehensive primary care strategy may need to be sequenced across legislative sessions and regulatory cycles. The Needs Assessment should inform not just what is needed, but what is achievable when — and in what order commitments should be sought.
AI: a productivity multiplier?
Technology and IT infrastructure can be a productivity multiplier that affects how many professionals are actually needed to serve a given population. That interdependency means IT and workforce requirements must be assessed in conjunction, not as separate exercises. A state that defers its technology assessment until after it has sized its workforce requirement may find that the two plans are out of sync in ways that are expensive to correct.
Workforce Gap: the Hardest to Close
Of all the resource gaps the Needs Assessment will surface, workforce supply is arguably the most urgent and consequential. Without an adequate supply of primary care professionals, the population’s needs cannot be met even if the spending target is met. In a previous article the author estimated that the national primary care physician shortage could climb to 158,500 by 2035–2037 almost twice HRSA’s estimate of 87,150. (HRSA did not take into account existing shortages.) The medical education and residency system does not currently have the capacity or financing to train that many primary care physicians at the required pace, and the lead times are measured in years.
Medical schools do not currently have the capacity to produce primary care graduates at the volume required. This is a structural limitation. New program models that are more efficient, less costly, and capable of producing more graduates in less time are not a peripheral consideration. They are a prerequisite for closing the gap at any realistic pace.
Successful deployment of AI and a higher ratio of advanced practice clinicians to physicians could reduce workforce requirement estimates significantly. These are not speculative possibilities — they are planning variables that should be modeled explicitly in the Needs Assessment, alongside IT productivity assumptions. What they should not be is a reason to defer the harder workforce investment decisions.
Wrapping Up
The investment commitment authorized under Lever 1 and the Needs Assessment and Resource Allocation Plan are not sequential. They overlap and must be developed together. Goals and objectives set without the reality check of a rigorous needs assessment will be out of sync with what is actually achievable; this makes them both incomplete and counterproductive. Without the Needs Assessment and Resource Allocation Plan in hand, the governance body responsible for overseeing primary care investment is managing without a map.
The hardest and most consequential task within that plan is figuring out how to materially increase the supply of primary care professionals — not merely replace attrition or keep pace with population growth, but grow supply enough to meet increasing demand: a growing and aging population, currently unmet need finally being addressed, and the broader strategic ambition of doing more with primary care in order to do less with acute care.
From Analysis to Decision Making
A completed Needs Assessment and Resource Allocation Plan should deliver a clear set of options and trade-offs, with accompanying cost, staffing, and sequencing requirements, that enables top government officials, legislators, and other key stakeholders to decide which priorities are most appropriate for their state. The Needs Assessment provides the evidence-based foundation for a series of decisions, including the alternatives that must be considered, so that the resulting program is defensible to the communities it serves and to the stakeholders with an interest in the outcome. The remaining Key Levers shown in the diagram above will be addressed in subsequent articles and/or posts.
Footnotes
Certain observations concerning what states are doing are based on publicly available documents and internet research. They have not been verified through direct dialogue with state officials in most cases, and should be read as starting points for further investigation rather than definitive assessments.