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Sen. Cindy Friedman (right), who co-chairs the Legislature's Health Care Financing Committee, speaks at a hearing about health care costs on March 13, 2025.
Chris Lisinski/SHNS
The state's health care system is "falling apart" as costs soar and patients struggle to afford the services they need, a top lawmaker warned Thursday while calling for "bold steps" by Beacon Hill.
Kicking off a hearing about the benchmark system used to set expectations for health care spending growth, Sen. Cindy Friedman did not mince words about the stakes that policymakers face.
"We hear about a system in crisis. We're beyond that. It is now falling apart," Friedman, who co-chairs the Legislature's Health Care Financing Committee, said. "It is imperative for us to dig into which services and entities are siphoning the most health care dollars and returning the least value, as well as those that offer more value at a lower cost. It's time for the state, including the administration and Legislature, to take bold steps to rein in costs and refocus the health care system on the patient and the delivery of quality care to those patients, rather than money and profit."
The Center for Health Information and Analysis reported Wednesday that health care spending in Massachusetts grew at an 8.6% rate from 2022 to 2023, more than twice the 3.6% benchmark and the second-highest annual increase since state watchdogs began tracking the data a decade ago.
The Health Care Financing Committee and members of the Health Policy Commission's board gathered Thursday for a hearing about the report and about whether to adjust the benchmark for 2026.
CHIA researchers dubbed the 2023 growth rate "unsustainable," and said major drivers were increased pharmacy spending and new MassHealth supplemental payments to hospitals.
Friedman said different segments of the industry are pointing fingers in various directions.
"I have heard from providers and health systems that reimbursement rates are too low, from health plans saying that reimbursement rates and pharmacy spending are too high, from independent pharmacies telling me they are struggling with low reimbursement rates and clawbacks, from [pharmacy benefit managers] that say that independent pharmacies are stable and they do not claw back claims, from pharmaceutical manufacturers saying discounts to 340B-covered entities are too high, and from community health centers and safety net hospitals telling me they cannot operate without full 340B margins, and so on," Friedman said.
"Now there's a lot of nuance to these statements, and they can all be true to an extent, but it begs the question of where our health care dollars are really going if everyone says they do not have a big enough slice of the pie," she added.
