Annual Report on the Performance of the Massachusetts Health Care System (March 2024)

Annual Report
on the performance of
the Massachusetts health care system

The Annual Report on the Performance of the Massachusetts Health Care System includes a final calculation of Total Health Care Expenditures (THCE) for 2022. THCE is a measure of total statewide health care spending in the Commonwealth.

The report examines trends in costs, utilization, coverage, and quality indicators through 2022, a period following two years of unprecedented volatility in the health care system due to the COVID-19 pandemic.

This report includes a new chapter on health care affordability that presents a consumer-centric picture of rising health care costs and its downstream implications, as well as a section and interactive dashboard that provides comparative insights into how medical spending varies by community demographics.

The Annual Report also examines hospital utilization, payer and provider financial and quality performance, and spending trends related to behavioral health, telehealth- and COVID-19-related services.

Key findings from the report were presented at the Health Policy Commission’s Health Care Cost Growth Benchmark Hearing. The hearing that took place on Thursday, March 14, 2024 is used to solicit data, information, and feedback to inform the 2025 Health Care Cost Growth Benchmark. Members of the state Legislature’s Joint Committee on Health Care Financing, led by Senate Chair Cindy Friedman and House Chair John Lawn Jr., co-hosted the hearing alongside the HPC’s Board.

The complete recording of the Health Care Cost Growth Benchmark Hearing is posted to the HPC’s YouTube channel.

Key Findings from the Annual Report (Released March 2024)

    • Total Health Care Expenditures (THCE) in Massachusetts totaled $71.7 billion in 2022. From 2021 to 2022, THCE per capita increased 5.8% to $10,264 per resident.

    • Between 2020 and 2022, member cost-sharing, premiums, and claims covered by payers and employers increased faster than regional inflation and wages and salaries.

    • Pharmacy and non-claims payments were the largest contributors to the THCE increase in 2022. The nonclaims growth was primarily driven by $621.5 million in new COVID-related supplemental payments that MassHealth made to support the financial stability of eligible providers pursuant to state and federal legislation.

    • Commercial enrollment in high deductible health plans (HDHPs) grew to 42.4% of members in 2022, continuing a growth trend that has more than doubled over the last 10 years (in 2014, 19.0% of members were enrolled in HDHPs).

    • In 2021, over four in 10 Massachusetts residents reported experiencing health care affordability issues in the past 12 months (41.0%), including more than half of Hispanic residents (54.9%) and Black residents (50.8%).

    • The statewide acute hospital median total margin decreased by 9.2 percentage points, from 5.0% in HFY 2021 to -4.2% in HFY 2022; this was followed by an increase to a statewide median total margin of 1.6% in HFY 2023, as of data reported through June 30, 2023.

    • Acute hospital average length of stay has steadily increased year-over-year, while inpatient, emergency department, and outpatient observation visits have declined and remain lower than pre-pandemic volumes.

    • In 2022, behavioral health spending represented 7.4% of private commercial health expenditures, 16.2% for MassHealth, and 3.1% for Medicare Advantage, with a majority of behavioral health spending for mental health services.

Previous CHIA Annual Reports