Health Policy Commission warns Massachusetts faces mounting health‑care affordability crisis

David Seltz, executive director of the Health Policy Commission, told the Group Insurance Commission that Massachusetts is facing a deepening affordability challenge driven mainly by rising prices rather than heavier use of care. "Hospital and physician groups are demanding some extraordinary rate increases in their negotiations with carriers far in excess of the cost growth benchmark," Seltz said during the November GIC meeting.

Seltz presented a decade of spending data showing recent years’ commercial spending growth outpacing the state benchmark and beginning to exceed national trends. He said commercial per‑enrollee spending growth averaged about 4.7 percent in the most recent multi‑year window and that pharmacies — especially branded prescription drugs — showed the fastest acceleration, with pharmacy prices rising far faster than utilization.

Breaking down hospital trends, Seltz said growth is concentrated in hospital outpatient departments (HOPDs), where services billed under a hospital license frequently carry much higher prices than identical services billed in a physician office. "If it's the same level of care, we should be paying the same rate," he said, urging greater use of site‑neutral payment policies to remove the financial advantage of delivering ambulatory care under hospital billing.

Seltz also highlighted rapid growth in prescriptions for GLP‑1 class drugs (used for diabetes and weight loss). Citing HPC data through September 2023, he said the commercial market had already recorded roughly $270,000,000 in spending on these medicines and warned utilization and budget impact were likely to rise sharply in 2024.

Throughout his presentation, Seltz framed the issue as a system problem that will require coordinated, state‑level policy responses. He cited Chapter 224 and the cost growth benchmark as the statutory framework threatened by unchecked price growth and urged policymakers and large purchasers to act together to preserve affordability and access.

Commissioners pursued follow‑up questions on COVID era effects, the extent of migration from office to hospital outpatient settings, telehealth trends and the primary care workforce. Seltz and GIC staff agreed to provide additional analyses and return for deeper briefings on actionable reforms.

The Health Policy Commission presentation ended with Seltz offering technical recommendations — including site‑neutral payments and reorienting spending toward primary care — and an appeal for multi‑stakeholder collaboration.