HPC also finalized new regulatory updates and discussed new investment program supporting hospital to home discharges
BOSTON —Today, the Massachusetts Health Policy Commission (HPC) Board set the health care cost growth benchmark for calendar year 2027 at 3.6%. The Board also finalized new regulatory updates related to Chapters 342 and 343 of the Acts of 2024, and shared details on the new HPC Promoting Appropriate Transitions to Home (PATHways) investment program.
2027 Health Care Cost Growth Benchmark
The health care cost growth benchmark, the cornerstone for the state’s cost containment efforts, is a statewide target for the rate of growth of total health care expenditures (THCE), the annual sum of all health care expenditures in the Commonwealth from both private and public sources, calculated on a per person basis. The benchmark does not cap prices or spending growth, it is a measurable goal to track the state’s progress and to motivate collective action to moderate spending growth over time.
In determining the 2027 benchmark, commissioners considered testimony and data first presented at the Health Care Cost Growth Benchmark Hearing held in conjunction with the Joint Committee on Health Care Financing. THCE increased 5.7% from 2023 to 2024, totaling $11,663 in average annual health care spending per Massachusetts resident. For the fifth consecutive year, pharmacy spending net of rebates was a major driver of cost growth, increasing by $1.1 billion from the previous year – a nearly 10% increase.
Considering these concerning health care cost growth trends, commissioners voted to maintain the benchmark at its current rate of 3.6% for another year.
In the meeting, HPC Executive Director David Seltz recognized and acknowledged that this is the fourth consecutive year of over benchmark spending and the data demonstrates that health care affordability in the Commonwealth is trending in the wrong direction. At the same time, federal policy changes threaten health care coverage gains and the financial stability of public programs, especially MassHealth and the Heath Safety Net. Director Seltz committed that the HPC will evaluate the role of the overall benchmark framework and consider potential changes to ensure that it continues to advance the HPC’s key goals of affordability, accessibility, and sustainability.
In the 2023 Annual Health Care Cost Trends Report, the HPC issued policy recommendations to the Legislature under the umbrella of Modernizing the Commonwealth’s Benchmark Framework To Prioritize Affordability and Equity for All. This recommendation included changes to the process managed by the Center for Health Information Analysis (CHIA) to account for the variation in health care entities’ pricing levels or populations served, to strengthen the benchmark accountability mechanisms, and to establish new affordability and health equity benchmarks, all of which would require statutory changes.
Director Seltz committed that the HPC will review those proposals and develop an updated set of recommendations to the Legislature for potential inclusion in this year’s annual report, working with legislative partners, the health care community’s advocates, and industry leaders in alignment with the Healey-Driscoll Administration’s commitment to affordability and the work of the Health Care Affordability Workgroup.
“The benchmark alone is not a cost containment strategy – it must be paired with meaningful, structural reforms that address the root drivers of health care spending growth. The HPC has made many policy recommendations over the years to advance efficient care and reduce unnecessary waste and will continue to do so, including through our new expanded authorities in the areas of statewide health resource planning and pharmaceutical policy,” said David Seltz, HPC Executive Director.
“The benchmark is a measurable goal that is designed to inspire us to take collective action. The data – especially the growth in family and employer premium contributions – shows us that the status quo is not working for the people who live and work in Massachusetts,” continued Seltz. “As recognized earlier this week, the passage of historic health care reform twenty years ago proved that even our biggest challenges can be met when we come together with a spirit of compromise and a shared commitment to the public good. That same spirit is needed now.”
More information on the benchmark process is included in these FAQs and in this short explainer video.
Other Topics at the HPC Board Meeting
The Board voted to finalize regulatory updates implementing provisions from Chapters 342 and 343 of the Acts of 2024 related to the HPC’s Registration of Provider Organizations Program, Notices of Material Change and Cost and Market Impact Reviews, and the Assessment of Certain Health Care Providers and Pharmacy Benefit Managers.
Deputy Executive Director Coleen Elstermeyer also highlighted the HPC’s new grant opportunity: the Promoting Appropriate Transitions to Home (PATHways) investment program. PATHways will fund nine awards for a total of $1.89 million to support acute care hospitals in Massachusetts to advance hospital-to-home programs, streamlining patient discharges into their homes or communities rather than into skilled nursing facilities or other institutional settings. Applications are due by June 4, 2026.
Learn more about PATHways at a virtual information session on April 29, 2026 from 12:00-1:00 PM, and review the RFP on COMMBUYS.
A recording of the meeting and presentation materials are available on the HPC’s website.
