The popularity of expensive weight-loss medications and other prescription drugs along with higher hospital costs, is driving up health care spending in Rhode Island – more evidence, state regulators said, of why insurers need to reduce red tape for doctors and increase spending on primary care, according to a report released Monday.
The amount of money spent on Ozempic, Wegovy and Mounjaro, known as GLP-1s, nearly tripled from 2021 to 2023, helping drive up retail pharmacy spending by 7.4% in 2023, according to the report by the state Office of the Health Insurance Commissioner.
Spending on COVID-19 vaccines also soared, as federal government subsidies ended, the report said, and manufacturers began selling their brand-name vaccines at prices negotiated directly with insurers. The average cost per dose of COVID-19 vaccines more than tripled in 2023, the report said, to $150 per dose, compared with $46 per dose in 2022.
Hospital costs also spiked, with double-digit increases in outpatient and inpatient visits as well as emergency department services, the report said. Hospital inpatient and outpatient stays together made up more than 40% of all health care spending in Rhode Island in 2023.
Rhode Island’s statewide health care spending in 2023 rose 7.8%, similar to Connecticut (7.9%) and less than in Massachusetts (8.6%), OHIC said. But the increases exceeded the state’s 6% cost growth target.
Rhode Island’s health care spending in 2023 increased 6.9% among people with commercial insurance, to $6,735 per person, the report said. That compares with a 8.7% increase, to $14,400 per person, for people 65 and older covered by Medicare, and 6.7% to $7,678 per person for Medicaid, the two government insurance programs.
“This report confirms what Rhode Islanders already know and experience firsthand,” Health
Insurance Commissioner Cory King said in a statement. “It’s more urgent than ever to shift our focus—and our dollars—toward solutions that improve health and bring costs down. That starts with investing in primary care.”
Primary care – timely doctor’s office visits, routine screenings and other preventative health care – improves patient outcomes and reduces costs over the long term. But a doctor shortage and the increased workload on primary care clinicians has made it harder for Rhode Islanders to access primary care.
The report comes as Rhode Island faces a doctor shortage made more severe by the shutdown June 30 by Anchor Medical Associates, a primary care practice with about 25,000 patients.
New state regulations for commercial health insurance, finalized in February 2025, to increase spending on primary care include:
- A requirement that insurers raise the share of medical spending that goes toward primary care to at least 10% by 2029. At that rate, the per-person spending on primary care is projected to have nearly doubled compared with 2022 levels, according to OHIC.
- New investments to support care coordination, integrated behavioral health and team-based care, including helping primary care practices build the staff and resources they need to care for patients.
- Reduce prior authorization requirements, especially for requests managed by primary care providers and services that are routinely approved.
The report also outlined goals for future policies to strengthen the state’s investment in primary care and improve oversight of the health care delivery system, particularly when hospitals, insurers or private equity groups seek to buy physician group practices.
