Why Mass. keeps blowing past its health care spending goal

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Year after year, for more than a decade now, Massachusetts officials set a goal to keep health care spending in check.

And year after year, the state fails to meet that goal.

Total spending on health care — including doctor visits, hospital bills and insurance premiums — increased by 5.7% in 2024, the most recent year for which data is available. That’s higher than the state’s target of 3.6%. It was the fourth straight year Massachusetts blew past the target.

At a public meeting last week, researchers from the Health Policy Commission explained what’s going on. Across the state, more people are using more expensive medications, including GLP-1 diabetes and weight loss drugs. There’s been an increase in certain higher-cost medical care, like heart procedures. And some routine procedures like colonoscopies are happening more often in expensive hospitals, instead of in lower-cost clinics.

Altogether, Massachusetts spent more than $83 billion on health care in 2024.

These numbers affect everyone. As total spending rises, residents pay more for health insurance and for medical care. And some go without care.

“The number of people who are deferring care because of the cost, premium growth and cost sharing — all of these things are increasing and really trending in the wrong direction,” David Seltz, the executive director of the Health Policy Commission, told me.

The commission serves as a watchdog on health care costs and makes recommendations to the Legislature for improving affordability. Every spring, it sets the state’s cost containment goals for the following year. A vote is scheduled for next week.

Historically, the commission has stuck with 3.6%, which is meant to reflect the state’s projected economic growth and inflation over the next several years. Employers argue the benchmark should be more strict. Hospital lobbyists insist it’s an outdated target and doesn’t reflect the realities of providing health care today.

I asked Seltz: Is this approach working?

“The benchmark was designed to help us understand where we're performing and how we're doing,” he said. “So the benchmark is doing its job. We just don't like the answer.”

The answer, according to Seltz, is to enact more aggressive policies to contain drug costs, and to make sure patients are receiving appropriate, cost-efficient care. These kinds of reforms can be complicated — and controversial.

”We've got a lot of work to do,” he said.