SALT LAKE CITY — Healthcare spending in Utah has grown substantially in recent years, driven by a combination of rising prices and increased use of services, according to a new report from the One Utah Health Collaborative (the Collaborative). The cost driver analysis report with a publicly available online dashboard, covering 2019 to 2023, identifies prescription drugs, outpatient hospital services, chronic disease care, and mental health services as the primary factors behind rising costs across commercial insurance, Medicaid, traditional Medicare (fee-for-service), and Medicare Advantage.

“This report helps us understand where healthcare dollars are going — and why,” said James Wissler, Executive Director of the Collaborative. “We’re seeing an urgent need to understand and address pricing pressures and service patterns that are driving higher costs for families, employers, and state programs.”

Key Findings

*Changes highlighted for all markets are from 2021-2023, except for Medicaid, which is 2021-2022

Prescription drug spending surged, led by higher brand-name drug prices and utilization.

High-cost medications, particularly brands for chronic conditions, remain a major driver of pharmacy spending.

  • In the commercial market, brand-name drug prices rose 71%, even as use dropped by 25%.
  • Medicare Advantage saw a 59% increase in brand-name drug use, with prices holding steady.
  • Medicaid experienced smaller increases: 5% in brand-name drug prices and 6% in utilization.
  • In traditional Medicare, retail pharmacy spending rose 36%, driven by a 20% increase in price per unit and a 14% rise in utilization

Outpatient hospital services are among the fastest-growing cost areas.

Outpatient care—medical services provided without an overnight hospital stay, such as surgeries, emergency department visits, imaging, and drug infusions—accounted for significant spending growth.

  • Commercial outpatient spending rose 11%, mostly from price increases.
  • Medicare Advantage outpatient spending jumped 32%, with prices up 13% and use up 17%.
  • In Medicaid, overall outpatient use declined, but prices for administered drugs surged 44%, driving up costs.
  • Traditional Medicare outpatient spending rose 13%, with prices up 11% during the same period.

Avoidable Emergency department visits and spending are rising again.

After earlier declines, avoidable emergency department (ED) use and spending have rebounded in recent years.

  • Potentially avoidable ED visits increased 13% in commercial plans and 27% in Medicare Advantage.
  • Medicaid experienced a 3% increase in avoidable ED visits.
  • In traditional Medicare, potentially avoidable ED visits increased 5%.
  • Across all markets, higher visit volumes and rising prices are driving up avoidable ED spending.

Chronic disease care costs are climbing, driven by both prices and use.

Conditions like hypertension, diabetes, and chronic kidney disease (CKD) are major contributors to spending growth.

  • Commercial plans saw spending rise 26% for hypertension and 18% for CKD, largely due to price increases.
  • Medicare Advantage spending grew 36% for diabetes, 43% for colorectal cancer, and 28% for CKD, driven by rising use and prices.
  • In Medicaid, CKD spending increased 10%, even as use declined, due to rising prices.
  • Traditional Medicare saw diabetes-related spending rise 26%, driven by a 25% increase in prices and slight growth in utilization.

Mental health service use is increasing, but access varies by market.

Utilization of mental health services rose in commercial and Medicare Advantage plans, raising concerns about access.

  • Mental health visits increased 29% in commercial plans and 49% in Medicare Advantage, driving higher overall spending despite lower per-visit prices.
  • Medicaid mental health use declined 14%, even as prices rose by 10%.
  • In traditional Medicare, mental health service use remained stable after earlier declines, while substance use disorder services declined by 9%.
  • Across most markets, substance use disorder services declined in both use and spending.

*All spendings highlighted are per capita spending, utilization is per 1000 member and price is price per unit

Looking Ahead: Sustaining Affordability Through Data and Collaboration

“With Utah’s aging population, it’s critical to ensure care remains affordable for seniors and families alike,” said Sri Bose, PhD, Director of Research at the Collaborative. “If prices continue to rise faster than wages, more Utahns will struggle to afford the care they need.”

At the same time, rising use of outpatient services, chronic disease treatments, and mental health care reflects real and growing needs in the community. “Rising demand is not inherently bad,” said Bose. “It highlights the need for smarter investments in prevention and better-coordinated care to improve health outcomes and reduce unnecessary spending”

To address these challenges, the Collaborative is working with insurers, providers, and community organizations to develop targeted solutions. One example: convening stakeholders to increase colorectal cancer screening rates — a critical step toward early detection, better outcomes, and lower long-term costs.

Further analyses are underway to examine the biggest cost drivers in more detail, including high-cost medications like GLP-1 drugs (e.g., Ozempic, Wegovy) and behavioral health trends. Follow-up reports, set for release later this year, will shed light on spending patterns across these areas, supported by ongoing data-sharing partnerships with payers.

“Having a full picture of healthcare spending allows us to take meaningful action,” said Bose. “By bringing together data, expertise, and diverse perspectives, we can develop real solutions to keep healthcare affordable and accessible for Utah families.”

Read the full report and explore the Utah Cost Driver Analysis dashboard here.

About the One Utah Health Collaborative

The One Utah Health Collaborative is an independent 501(c)(3) nonprofit launched by Governor Spencer Cox to drive affordable, high-quality, and trusted healthcare solutions through public-private partnerships. The Collaborative convenes healthcare leaders to align efforts, track progress, and advance sustainable solutions that improve health outcomes across Utah. Learn more at uthealthcollaborative.org.

For more information contact:

Elise Saarela

Program Manager

One Utah Health Collaborative

elise@uthealthcollaborative.org

(c) 435-659-8854