Five new reports released by the Office of Health Care Affordability and Transparency (OHCAT) at the New Jersey Department of Health provide new insight into rising healthcare costs in the state. The reports analyze cost trends, drivers behind those increases, and disparities within New Jersey’s healthcare system.
Two of the reports, part of the Healthcare Affordability, Responsibility and Transparency (HART) Benchmark Reporting Program, focus on health spending trends during two periods: a Transition Year (2021-2022) and Performance Year 1 (2022-2023). These documents indicate that cost increases are occurring across all insurance markets, service categories, insurers, and providers.
Additional analysis finds that price increases—not higher utilization—are mainly responsible for rising commercial market costs between 2017 and 2022. A special report on hospital labor costs concludes that non-labor expenses grew faster than labor costs from 2017 to 2023. Direct patient care labor increased more slowly than non-direct patient care expenses.
A fifth report—The State of Health in New Jersey, 2025—offers a broad overview with indicators tracking quality, access, affordability, and workforce sustainability over time.
“Sabemos que los costes de la atención sanitaria incrementan la carga económica a las familias de Nueva Jersey. Abordar la asequibilidad requiere que cada parte del sistema sanitario examine su papel y tome medidas significativas para que la atención sanitaria sea asequible en nuestro estado,” said Acting Health Commissioner Jeff Brown. “Estos informes son herramientas esenciales para informar ese trabajo, proporcionando claridad crÃtica para ayudarnos a controlar los costos sanitarios.”
“Los informes proporcionan una transparencia sobre la sanidad de Nueva Jersey como nunca antes,” said Jim Lloyd, Executive Director of OHCAT at NJDOH. “Los resultados presentados en estos informes llevan a conversaciones informativas basadas en data para abordar este problema sistémico, y de esa manera todos pueden aportar para mejorar la asequibilidad de la atención sanitaria.”
Together, the five reports:
– Offer unprecedented transparency in New Jersey’s healthcare sector—which makes up nearly 11% of the state’s gross domestic product.
– Show system-wide cost growth as a basis for future affordability interventions.
– Indicate that direct patient care labor was not a main factor in rising costs.
– Provide greater clarity about improvement areas within the system as well as ongoing disparities in access to care.
In response to rapidly growing healthcare costs creating barriers to care in 2021, Governor Phil Murphy convened stakeholders from across the sector to sign a Compact to Reduce Healthcare Cost Growth Rate in New Jersey. The agreement set annual targets for slowing cost growth between 2022 and 2027 through collective action aimed at improving affordability.
Hospitals were among the first signatories; insurers have been key partners implementing benchmark measurement. Continued collaboration among employers, purchasers and advocates remains critical.
OHCAT works with the Department of Banking and Insurance to collect data from major health insurers statewide so year-over-year per-person spending changes can be tracked by state total as well as by market—commercial plans, Medicare or Medicaid—and now also by insurer and provider.
During the transition year (2021–22), individual health spending rose an average of 3.6%, from $10,292 per person annually to $10,663; total statewide spending increased by $3.95 billion or 5.1%. In performance year one (2022–23), per capita spending climbed more sharply by 6.1% ($10,663 to $11,319), with overall expenditures up $7.42 billion or 9.2%.
Performance varied among large provider entities due to factors like inflation and federal changes affecting Medicare Advantage programs. While all service categories saw growth—including retail pharmacy services and hospital-based care—hospital services experienced particularly high increases.
For both reporting periods covered in these benchmarks, people insured through commercial carriers saw slower cost increases compared to those covered by public insurers such as Medicaid or Medicare.
Wider economic conditions—including pandemic-related supply chain disruptions—contributed significantly to recent healthcare inflation rates reflected in these findings.
Compared with similar states tracking cost growth—including Connecticut, Delaware, Massachusetts and Rhode Island—New Jersey’s increase was similar or lower than those states’ rates (Health Affairs).
One report examined primary care spending specifically; it found New Jersey spends less on primary care than national averages while utilization declined during the study period—a trend consistent with prior research showing below-average Medicaid payment rates for primary care providers statewide make retention challenging despite strong training pipelines.
The HART program’s hospital labor cost analysis determined hospital operating margins fell from 2017–23 but non-labor expenses contributed more heavily than staff wage growth did—with non-direct patient care roles seeing larger relative gains.
The comprehensive State of Health report uses interactive dashboards comparing current performance with previous years’ results—and where available—with other states nationwide. It notes generally high quality but points out some declining metrics compared with past years’ trends.
Persistent disparities remain: Black residents recorded worse outcomes on quality measures while Hispanic residents fared worse on access indicators; southern counties lagged behind state averages on several metrics.
The HART initiative is part of broader consumer-focused policies advanced under Governor Murphy’s administration—including prescription drug affordability laws regarded as national models—as well as protections against medical debt collection practices that have eliminated almost $1.4 billion in medical debt for over 828,000 New Jerseyans.
These are OHCAT’s first reports since being relocated within NJDOH under Executive Order No. 377 signed by Governor Murphy.
