Total health care costs, measured by CHIA, grew by 8.6 percent between 2022 and 2023, far exceeding the state’s target of 3.6 percent. That translates to $11,153 per resident. The average annual premium for a family health insurance plan was $26,355 in 2023 — the second highest in the country — and that average family spent another $2,715 out of pocket. Health care spending grew faster than regional inflation.
Consider that in 2023, about 4 in 10 Bay Staters reported having trouble affording health care, and nearly 1 in 3 avoided getting needed health care because of cost, according to the Center for Health Information and Analysis’s 2025 annual report , released March 12.
Massachusetts’ skyrocketing health care costs are an urgent problem for every resident. Every one of us will need medical care. And every one of us will pay for medical care, through doctors’ bills, health insurance, or taxes that fund Medicare and Medicaid.
Get The Gavel A weekly SCOTUS explainer newsletter by columnist Kimberly Atkins Stohr. Enter Email Sign Up
Policy changes that simply shift costs from one entity to another can’t be the solution. Innovative strategies like using artificial intelligence to write medical notes or offering hospital-level services at home can help in the margins. In the long term, the system will need to be rebalanced to prioritize primary care, so people can stay healthier and receive care less expensively.
Advertisement
For now, here are four areas ripe for changes that could lower costs.
Eliminating low-value care. In 2018, the Massachusetts Health Policy Commission found that the state’s three largest commercial health plans paid $80 million over two years for “low-value” care, and 2022 research suggests providers vary significantly in how much low-value care they provide. These are specific procedures that evidence suggests have little value to patients, like vitamin D deficiency screening; cardiac stress tests before low-risk, noncardiac surgery; or imaging for a headache.
Of course, there will be patients who need these procedures, and doctors need flexibility to do them when warranted. But as Alan Sager, a professor of health law, policy, and management at Boston University, notes, the reasons many of these procedures are done are as likely financial as clinical: a physician gets paid more for doing more, or a doctor is worried about a malpractice suit.
Advertisement
Reducing administrative waste. Health care providers spend enormous amounts of time and money on administrative tasks. The Massachusetts Health and Hospital Association estimates Massachusetts hospitals and physician practices spend $3.5 billion annually on billing and insurance-related work, of which half is unnecessary. For example, prior authorization is an important tool for insurers to ensure a patient is getting the right care at the lowest cost. But its use could be limited.
Requiring prior authorization makes sense for medications and treatments that are expensive or nonroutine but not for generic drugs commonly used to treat chronic disease. The process can also be made more efficient, replacing phone- or fax-based systems with online portals, and creating standard forms and documentation requirements across insurers.
Prescription drug prices. Prescription drug spending was a major driver of the overall spending increase. In 2023, $11.2 billion was spent on prescription drugs in Massachusetts, up from $10.2 billion the prior year, even after accounting for rebates drug manufacturers give insurers, according to CHIA. Spending is expected to increase in future years given the popularity of expensive GLP-1 weight loss drugs.
The Legislature took a first step by requiring drug manufacturers and pharmacy benefit managers to report financial information to regulators. The next step is using that data to find ways to lower prices. Governor Maura Healey has suggested penalizing drug manufacturers for excessive price increases. This board has supported legislation prohibiting pricing strategies that pharmacy benefit managers use to steer consumers toward buying expensive drugs instead of generics.
Advertisement
Provider pricing. Different stores often charge different prices for products, and in health care, a hospital with cutting-edge technology is justified in charging more than a small physician’s office. But current provider price variation is excessive. For example, Dana-Farber Cancer Institute charges $22,392 for a standard dose of cancer drug Keytruda while HealthAlliance-Clinton Hospital charges $11,099, according to CHIA.
According to the state’s price transparency website, the price for a mammogram in 2022 was $100 at Baystate Noble Hospital and $268 at St. Anne’s Hospital. The Health Policy Commission has suggested lawmakers cap price growth at high-priced facilities. States like Oregon and Rhode Island cap hospital prices. Another option proposed by the commission is limiting “facility fees,” where hospitals charge more for a lab test performed in a hospital clinic than at a doctor’s office.
Health care reform is notoriously tricky, and attempts to cut costs butt up against the risk of limiting access and hurting local providers. The challenge is finding ways to eliminate the waste in the system that doesn’t help anyone. But the difficulty of the challenge should not deter action on a problem this pressing. The concrete ideas above are a valuable start.
Editorials represent the views of the Boston Globe Editorial Board. Follow us @GlobeOpinion.
Four concrete ways Massachusetts can lower health care costs
