Five new reports from the Office of Health Care Affordability and Transparency (OHCAT) within the New Jersey Department of Health have been released, providing a detailed look at the rising costs of health care in the state. These reports analyze trends affecting families, employers, and state spending.
Two Health Care Affordability, Responsibility, and Transparency (HART) Program’s Health Care Cost Growth Benchmark reports examine spending for 2021-2022 and 2022-2023. They show that health care costs are increasing across all insurance markets, service categories, most carriers, and providers.
Another report focuses on commercial insurance between 2017 and 2022. It finds that price increases are primarily responsible for higher costs rather than greater use of services. A separate analysis on hospital labor costs notes that non-labor expenses grew faster than labor expenses from 2017 to 2023; among labor costs, those not related to direct patient care increased the most.
A fifth report gives an overview of New Jersey’s health system in 2025 using multiple indicators covering quality, accessibility, affordability, and workforce sustainability.
Acting Health Commissioner Jeff Brown stated: “We know that health care costs strain New Jersey families. Addressing affordability requires each part of the health care system to examine its role and take meaningful action to make health care affordable in our state. These reports are essential tools to inform that work, providing critical clarity to help us rein in health care costs.”
Jim Lloyd, Executive Director of OHCAT at NJDOH said: “The reports provide transparency into New Jersey health care unlike ever before. The results presented in these reports can inform data-driven conversations to address this systemic problem, and everyone can play a role to enhance health care affordability.”
The collection of five reports reveals several findings:
– Greater transparency is provided about a sector representing nearly 11% of New Jersey’s gross domestic product.
– Costs rose throughout the system; this information could guide future efforts to improve affordability.
– Direct patient-care labor was not a main factor driving cost increases.
– The reports highlight areas needing improvement within the system as well as disparities in access.
In response to rapidly increasing health care expenses creating barriers for residents seeking care, Governor Phil Murphy formed a coalition in 2021 that signed the Compact to Reduce the Rate of Health Care Spending Growth in New Jersey. This agreement sets annual benchmarks aimed at slowing cost growth between 2022 and 2027.
Hospitals were early supporters of this initiative; insurance carriers also contributed significantly by helping measure cost growth rates. The process relies on ongoing cooperation from stakeholders such as employers and advocates.
OHCAT collaborates with the Department of Banking and Insurance to gather data from major insurers so it can monitor changes in per-person spending each year at both market-wide and provider levels—a new feature added this year.
For Transition Year (2021–2022), individual average annual expenses increased by 3.6%, from $10,292 to $10,663 per person. Overall statewide spending rose by $3.95 billion or 5.1%. In Performance Year 1 (2022–2023), average per-person spending climbed more sharply—by 6.1%—to $11,319; total statewide spending went up by $7.42 billion or 9.2%.
Performance during Performance Year 1 was compared against a benchmark set at a maximum increase rate of 3.5%. Results varied among large providers due partly to inflationary pressures and federal program changes.
Detailed breakdowns show all types of services had cost growth but inpatient facility services—which tend to be costly—grew slowest.
Commercially insured individuals saw slower cost increases compared with those covered by public programs like Medicare or Medicaid during both reporting periods.
Wider economic trends—including high inflation linked with pandemic-related supply chain issues—also played roles in raising overall costs during these years.
When measured against similar states tracking their own cost growth rates (Connecticut, Delaware, Massachusetts, Rhode Island), New Jersey’s pace was similar or lower according to available comparisons.
Looking closer at what drives rising costs for those with commercial coverage confirmed that price hikes—not more frequent use—are mainly responsible for higher expenditures on medical services over recent years.
The HART Program also reviewed primary care provision; findings indicate below-average investment relative to national norms alongside declining usage rates over time—a trend supported by outside research showing low payment rates for primary providers despite robust training programs locally.
Hospital finances were analyzed further through Medicare/Medicaid submissions showing operating margins declined since pre-pandemic times but largely due again not directly because labor outlays rose fastest but because other operational expenses did so even more quickly—with non-direct patient-care labor being one area where growth was highest inside hospitals’ payrolls.
A comprehensive landscape report provides context on how well New Jersey’s broader system functions using interactive dashboards comparing key measures across years—and sometimes nationally—with mixed results: generally high quality persists but some indicators worsened versus prior performance cycles; disparities remain evident especially along racial/ethnic lines or geographically within southern counties performing less well than others across many measures tracked here.
These transparency efforts complement wider consumer protection policies under Governor Murphy’s administration including laws targeting prescription drug pricing fairness as well as initiatives reducing residents’ exposure risk from medical debt—for example banning credit reporting tied mostly unpaid medical bills—and delivering direct relief totaling nearly $1.4 billion benefitting over 828 thousand people statewide through targeted debt elimination campaigns recently enacted via executive orders reorganizing OHCAT under NJDOH oversight.
