OHS: CT healthcare costs grew nearly 8% from 2022-23, highest annual increase since tracking began
While healthcare quality remained steady, total statewide healthcare expenditures grew by 7.8% from 2022 to 2023, according to a new report from the state Office of Health Strategy.
Each year, OHS issues reports intended to help policymakers and state residents understand how healthcare cost growth, quality and primary care investments are performing against state benchmarks.
The Connecticut Healthcare Benchmark Initiative issued its latest findings Thursday based on 2023 data.
According to the report, the state’s 2023 healthcare spending exceeded the benchmark for the third consecutive year. The nearly 8% growth in total healthcare expenditures to $11,886 per capita was also the highest annual increase since the program’s inception and nearly double the rate for 2022.
The benchmark for cost growth in 2023 was 2.9%. That was below the 3.2% benchmark for 2022, and 0.5% below percentage points below the 3.4% benchmark for 2021.
Aggregate statewide spending rose significantly in 2023 to $38 billion, the report said. Medicare was the largest component of aggregate spending, accounting for 35% of the state’s expenditures, followed by the commercial market at 32.4% and Medicaid at 25.2%.
Key drivers of statewide spending growth in 2023 included non-claims
spending (114.1% annual spending growth), retail pharmacy (9.4%), and
hospital outpatient services (6.9%), the report states. Long-term care was the only category to see a decline, falling by 0.3%.
OHS said the cost growth benchmark is set by blending projections of state economic growth and Connecticut household income. “Broadly, the benchmark value represents affordable and sustainable growth in the healthcare sector,” the report states.
The report found that total medical expense in 2023 grew by 6.2% per capita in the commercial market, 13.7% per capita in the Medicare market and 2.2% per capita for the Medicaid market.
It also shows that retail pharmacy and hospital outpatient spending continue to influence commercial market growth. Cumulative per capita spending growth since 2019 in the commercial market (25%) has far outpaced Medicare (7%) and Medicaid (-1%).
“Connecticut residents have struggled with healthcare costs for several years,” said Dr. Deidre Gifford, OHS commissioner. “Too many families delay needed care, cut pills in half and have to choose between medical bills and basic necessities like rent or groceries.”
Gifford added that the strong pace of cost growth “threatens to leave even more of our residents at risk. While quality remains stable, it is important to note that a high-quality system that is unaffordable to residents can’t meet the goal of improving health for everyone.”
The Healthcare Benchmark Initiative has scheduled an informational public hearing with key stakeholders and organizations identified as having contributed to cost growth to discuss solutions. The public hearing will be held June 23 from 9:30 a.m. to 3:30 p.m. in Room 1D of the Legislative Office Building, 300 Capitol Ave., in Hartford.
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