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Cost Transparency Board: data show pharmacy prices and outpatient care drove recent spending growth
Summary
HCA's cost-driver analysis, presented to the Cost Transparency Board, attributes most recent per-member spending growth to retail pharmacy price increases and higher outpatient and "other medical" spending; staff committed to deeper dives into pharmacy utilization measures, regional variation and member out-of-pocket impacts.
HCA staff presented a first-look cost-driver analysis based on the state All-Payer Claims Database, finding that retail pharmacy, outpatient services and a catchall "other medical" category are the largest contributors to per-member, per-month (PMPM) spending increases.
The data team said the APCD-based analysis covers roughly 71% of the state population and allows granular review of utilization and allowed amounts, though it excludes Medicare fee-for-service through 2023. "Pharmacy growth is heavily price intensity driven," Kathy Temple, senior data analyst, told the board, summarizing charts that show a post-pandemic acceleration in allowed amounts per pharmacy fill across markets.
Why it matters: staff said the combination of enrollment shifts (Medicaid down, Medicare Advantage up) and category-specific price-intensity increases means statewide PMPM spending rose significantly from 2017–2024. "Because Medicare Advantage patients spend more per patient, those membership shifts have downstream effects on statewide PMPM," Marty Ross, data analyst, explained.
Board members pushed staff on methodology and potential drivers. Katerina LaMarche, policy director at the Washington State Hospital Association, urged adding a basic inflation comparator and distinguishing price changes from intensity or new drug adoption: "it doesn't appear to factor basic economic inflation... not understanding those factors can lead to erroneous policy decisions," she said. Board members also asked staff to examine 30-day versus 90-day pharmacy fills and whether increased use of newer specialty drugs is changing the mix of fills.
Staff response and next steps: HCA committed to a focused set of deeper analyses, including: (1) investigating whether changes in pharmacy fill definitions (30-day vs. 90-day) affect measured utilization, (2) disaggregating retail pharmacy spend to identify the contribution of new or specialty drugs, (3) regional and condition-level variation, and (4) member out-of-pocket analysis. "These are great directions for future work; we'll return with more granular splits and methodology notes," Harrison Fontaine, senior policy analyst, said.
The board also noted data limitations: the APCD does not fully capture self-pay spending or non-claims payments included in the performance-against-benchmark reports. Staff said future reports will aim to reconcile those gaps and that the appendix includes methodology notes.
The board approved the January 28, 2026 minutes earlier in the meeting by voice vote; no member recorded an opposition.
The data presentation will inform targeted follow-up work (regional analysis, primary-care spending drill-downs and member cost burden assessments) and feed into the board's committee work this year.
