First-Ever Statewide Study Finds Healthcare Spending Growth in Utah Outpaced Income Increases from 2022-2023

New report brings transparency to Utah’s healthcare spending

Salt Lake City – With support from payers across Medicaid, Medicare, and commercial markets, the One Utah Health Collaborative (the Collaborative) today released the first-ever statewide study on healthcare spending trends in Utah.

The report, analyzing data from 2021 to 2023 from ten major insurers, reveals a widening gap between healthcare spending and income growth. According to the findings, per capita healthcare spending in Utah rose 6.6 percent from 2022 to 2023, while per capita personal income grew just 5.6 percent during that same period.

“Each year, Utah’s households and businesses are paying more and more for health care. By shining a light on spending, everyone across the healthcare landscape can better understand where those dollars are going, identify opportunities to get better value for our money, and measure the impact of the state’s actions toward our shared vision of the Utah Model of Care,” said James Wissler, the Collaborative’s executive director. 

Key findings:

• From 2021 to 2023, Utah’s per capita healthcare spending grew by 8.4 percent, rising from $7,547 in 2021 to $8,183 in 2023.
• Spending on professional behavioral health services increased as more Utahns accessed care. Primary care spending also increased modestly over the reporting period.
• Outpatient services spending rose significantly as care shifted from inpatient to outpatient settings.
• Rising prescription drug prices and use—especially specialty drugs—were key drivers of overall spending growth.
• Payments for services based on fixed amounts—such as capitation, global budgets, case rates, and episode-based payments—rose during the reporting period. Meanwhile, payments tied to performance incentives decreased.

“The report highlights several promising trends, including greater investment in behavioral health and a modest increase in investment in primary care, which suggests more people are getting the care they need,” said Dr. Sri Bose, the Collaborative’s director of research. “At the same time, it signals how critical it is that we keep a close eye on healthcare spending growth to make sure it does not continue to outpace personal income, making care unaffordable for Utahns.”

The Collaborative will further examine what is behind spending growth in a follow-up report on cost drivers, set for release in March. This analysis will include a deeper look at services that could be driving up healthcare costs and prescription drug trends, particularly the impact of GLP-1 medications and specialty drugs. This research is made possible by the continued partnership of payers committed to sharing their data.

“With a more complete picture of healthcare spending in our state, we can work together to develop innovative, data-driven solutions that put Utah on a sustainable path toward affordable and accessible healthcare that improves quality of life and fuels productivity,” said Bose.

Read the full report here: Utah Healthcare Spending Growth Trends, 2021-2023 

About the One Utah Health Collaborative
In 2022, Governor Spencer Cox launched the One Utah Health Collaborative, a community-owned 501(c)(3) nonprofit dedicated to transforming healthcare in Utah. Recognizing that meaningful change requires a long-term commitment, Governor Cox initiated a 15-year plan to establish an affordable, high-quality, and trusted healthcare system for all Utahns. 

In the fall of 2024, the Collaborative, in partnership with Governor Cox, officially adopted the Utah Model of Care. This innovative framework, developed through extensive statewide collaboration, outlines a vision for an ideal healthcare system. As the steward of the Utah Model of Care, the Collaborative plays a critical role in tracking progress and ensuring that healthcare transformation in Utah is guided by data, collaboration, and shared accountability. The release of Utah’s first-ever statewide healthcare spending growth report marks a major step in this effort, providing unprecedented transparency into spending trends that impact affordability and access. These findings will help stakeholders identify opportunities for greater value, guide cost-saving strategies, and measure progress toward a more sustainable healthcare system for Utah. Learn more at uthealthcollaborative.org.

FAQs
Why do we use “total health care expenditures” to measure health spending cost growth? This doesn’t reflect costs to the provider for delivering care.
Total health care expenditures (THCE) is a standard measure that is used by several states promoting transparency into and monitoring healthcare cost growth. It is the annual per capita sum of all health care spending from public and private sources. It includes all categories of medical expenses paid to providers, all non-claims related payments to providers such as performance incentives, member cost-sharing payments to providers, as well as the cost of administering private health insurance. While THCE does not measure the costs to providers for delivering care, it more closely reflects the costs that payers, healthcare purchasers and ultimately, consumers, face. 

Why is spending growth not inflation-adjusted? 
Healthcare spending growth is often measured against inflation to assess how the cost of medical care is changing relative to overall price increase in the economy. Adjusting healthcare spending growth for inflation would eliminate the ability to compare it with overall price increases. These comparisons are important to maintain because they help determine whether healthcare costs are rising faster or slower than the general cost of living, providing insight into affordability and healthcare spending growth’s impact on the broader economy. 

By omitting an inflation adjustment, are we overlooking the rising costs that providers face?
Depending on their contracts, insurers and providers typically negotiate payment rates every one to three years. Contracts between payers and providers often include inflation adjustments, with some tied to government rates or influenced by chargemaster rate changes, while medical inflation effects may not be immediately apparent or may vary depending on economic conditions. These negotiated rates are reflected in the ‘allowed amounts,’ which make up a significant portion of the Total Health Care Expenditures (THCE) used to measure healthcare cost growth. When setting rates for future years, providers and insurers factor in expected inflation to account for rising costs.