The Massachusetts Health Policy Commission (HPC) has released its 2025 Health Care Cost Trends Report, highlighting unprecedented health care spending growth and significant affordability challenges for Massachusetts residents.
According to the Massachusetts Center for Health Information and Analysis (CHIA), total annual health care expenditures per Massachusetts resident grew 8.6% in 2023, from $10,264 to more than $11,153. This growth in spending significantly exceeded the health care cost growth benchmark of 3.6% set by the HPC, and was the highest recorded since measurement against the benchmark began in 2012 – with the exception of 2021 during an atypical COVID spending period. Hospital outpatient department services and prescription drugs continued to be the largest contributors to overall spending growth.
With respect to hospital post-acute care (PAC), the HPC has previously found that Massachusetts had higher rates of discharge to institutional PAC and home health than the national average, across all payers, contributing to elevated PAC spending. In 2023, Massachusetts Medicare spending on PAC totaled nearly $1.5 billion, with annual PAC spending per beneficiary in Massachusetts was 9.3% higher ($162 more) than the U.S. average. In 2023, Medicare spending in Massachusetts for a SNF stay averaged $12,794, compared to roughly $2,100 for a home health episode, according to the HPC Chartpack.
In response to continued health care spending growth, the HPC urged policymakers and health care leaders to recommit to the state’s health care cost growth benchmark and to convene in 2026 to develop a comprehensive reform agenda aimed at moderating cost growth, reducing patient financial burden, and strengthening system performance. Among its policy recommendations to achieve this goal, HPC highlighted reducing low-value care and avoidable utilization by encouraging providers and payers to reduce unnecessary services, avoidable emergency department use, ED boarding, and preventable hospital readmissions, while shifting lower-acuity care to more appropriate settings. HPC noted that central to these efforts is expanded access to primary care and behavioral health services, as well as sustained investment in the health care workforce which continues to experience disruption, with turnover and shortages of providers in many roles throughout the care continuum, especially in behavioral health care and long-term care.