CHIA: Massachusetts health spending rose 8.6% in 2023 as pharmacy and hospital outpatient costs accelerate

The Center for Health Information and Analysis reported that total health care expenditures in Massachusetts rose to $78.1 billion in 2023, a per‑person average of $11,153 and an 8.6% growth rate — more than double the 3.6% health care cost growth benchmark.

CHIA executive director Lauren Peters and Health Policy Commission staff presented the agency’s annual report at the Health Policy Commission (HPC) hearing, citing pharmacy spending, hospital outpatient services and non‑claims (supplemental) payments as the largest drivers of the increase. “In 2023, total health care expenditures increased to $78,100,000,000 equating to $11,153 per Massachusetts resident. This put the per capita growth rate at 8.6%,” Peters said during the presentation.

CHIA’s breakdown showed commercial spending rose 7.2% with a 1.5% decline in membership (an 8.9% PMPM increase), Medicare spending rose 7.1% and MassHealth grew 14.8% in 2023 (4.4% enrollment growth), driven in part by roughly $1.5 billion in new supplemental payments to hospitals for performance‑based incentives and base‑rate increases. CHIA noted those supplemental payments were largely financed by a mix of an updated hospital assessment…