Cheer executive director Lauren Peters has alarmed about rising spending. With an 8.6% increase, Massachusetts healthcare costs totaled $11,153 per resident.
“In 2023, the unsustainable cost growth trend will continue to continue, putting increasing pressure on residents, employers and the entire system, highlighting the urgent need for bold and systematic solutions,” Peters said in a statement.
Peters will discuss the analysis at the state Health Policy Committee and the Legislature’s Joint Committee on Healthcare Finance on Thursday. The report covers a variety of medical expenses, including prescription medication, outpatient and inpatient treatment in hospitals, and doctor visits.
The prescription drugs, along with supplemental payments for new MassHealth, have driven increased spending, according to the report. While total spending on drugs increased by $1 billion, MassHealth, the Medicaid program in Massachusetts, won $1.5 billion in new incentive payments to hospitals that meet certain criteria for quality and equity.
Expenses on prescription drugs accounted for the largest share of overall healthcare spending, up 11.6% over 2022 to $15.2 billion, the report said. The next big category was outpatient care in hospitals, totaling $14 billion, an increase of 8.3% year-on-year.
Expensive, blockbuster weight loss drugs like Wegovy and Zepbound are believed to have contributed to increased spending on prescription drugs. Given the ongoing number of patients beginning to use so-called GLP-1 drugs for diabetes and weight management, Chia’s reporting in 2024 could have greater impact.
In Massachusetts, affordability across healthcare was prevalent, with 41.3% of residents struggling to pay for treatment, while Hispanic residents (58.2% had difficulty providing it) and non-Hispanic black residents (48.7% had difficulty providing it) said in the report.
David Seltz, executive director of the Health Policy Committee, said health care costs are “continuing to grow at an incredible pace.”
“This year again, pharmacy spending has been a major factor in rising costs, an increase of $1 billion from the previous year,” he said in a statement.
The CEO of the Massachusetts Biotechnology Council, representing more than 1,700 drug and life science companies in the state, challenged the proposal that rising drug prices were attributed to rising healthcare costs.
“Massbio is currently reviewing the latest cost trends report from Chia, questioning whether the available data is fully aware of all the factors contributing to rising pharmacy spending,” she said her trade group wanted “a more complete picture of the underlying causes of increased costs.”
Steve Walsh, president and CEO of the Massachusetts Health & Hospital Association, said the report highlights the 3.6% benchmark for annual spending growth is unrealistic. For several years, his group has argued that it should be raised.
“Massachusetts deserves a modernized approach to benchmarking that embraces the real-time needs of today’s patients and providers, which can explain inflation, labor costs, and the state’s actual total country products,” he said in a statement.
One healthcare policy expert said Massachusetts actually spent much more in 2023 than Chia calculated.
Alan Sager, professor of health law, policy and management at the Boston University School of Public Health, said the actual total is 45% higher when including the costs that CHIAs do when calculating costs for each state.
The CHIA does not include, among other things, workplace health care, worker compensation health expenditures, vocational rehabilitation, school health, dental insurance, out-of-payment expenditures for treatments not covered by insurance companies, and spending by several federal agencies, including the Department of Defense.
If those expenditures were included, he said Massachusetts’ healthcare costs totaled $113.5 billion in 2023, or about $16,200 per person.
“We spend a lot of it on healthcare,” said Sager, who sits on the council leading the research of Cheer. “It’s enough to provide helpful care to everyone who needs it. We’ll probably waste half of the money we spend.”
Jonathan Saltzman can be contacted at Jonathan.saltzman@globe.com.
