How states can use data to understand the strength of their health care system

U.S. health care spending reached $5.3 trillion in 2024, or approximately $15,474 per person, representing 18% of the nation’s gross domestic product (GDP). As spending continues to rise faster than overall economic growth, state leaders face increasing pressure to ensure health care systems remain accessible, sustainable and effective.

For policymakers responsible for Medicaid programs, public health infrastructure and provider oversight, assessing the condition of a region’s health care system requires more than tracking spending totals. It requires analyzing data across the system to identify risks, disparities and opportunities for improvement.

The importance of data

One of the most important steps in understanding system performance is integrating multiple data sources. Claims data, hospital discharge records, clinical information and public health datasets each capture different aspects of health care delivery. When these datasets are analyzed together, they provide a more complete picture of how care is delivered, how it is accessed and where gaps may exist.

Integrating data related to social drivers of health can further help states understand how community conditions influence health care outcomes and utilization behavior.

Once datasets are integrated, states must focus on tracking indicators that reflect the system’s health. National health expenditure data show that hospitals accounted for $1.6 trillion in spending in 2024, physician and clinical services totaled $1.1 trillion, and prescription drug spending reached $467 billion. These figures highlight where resources are concentrated across the health care system, but they do not indicate whether these are the right resources at the right time, leaving an incomplete picture.

 Monitoring utilization patterns, quality outcomes, consumer satisfaction, workforce capacity and access to preventive services alongside spending trends enables states to identify emerging pressures and preferences within regional health care markets.

Data analytics also allow states to identify geographic disparities and provide more contextually rich insights into how health care is accessed. Health care utilization and outcomes often vary significantly between regions within the same state due to differences in provider availability and care quality, collaborative community engagement in health care priorities and effective coordination of services and supports. By analyzing health care data at the regional or county level, states can identify communities where hospital capacity is strained, where services are available but not being accessed, discharge support services are limited, preventive services are underused or chronic disease burdens are highest. These insights help policymakers allocate resources more effectively and design targeted interventions that speak to the needs of their residents.

Looking ahead

Predictive analytics will play an increasingly important role in helping states anticipate stress in the health care system before it becomes a crisis. Centers for Medicare & Medicaid Services (CMS) actuaries project that national health expenditures will continue to grow, at an average rate of 5.6% annually, reaching more than $8.6 trillion by 2033 and accounting for over 20% of GDP.

At the same time, workforce shortages are growing at a staggering pace in clinical and community health settings. This affects the region’s ability to increase preventative capacity and tackle the needs of a growing number of individuals diagnosed with chronic conditions and diseases.

As health care spending expands, the scale and complexity of state health systems will grow as well, creating greater potential for investing in programs and policies that do not move the needle in a meaningful way. More than ever, states will focus on budgets that are supported by outcomes. States that invest in strong data infrastructure and predictive analytics will be better positioned to monitor system performance, detect emerging risks and support coordinated oversight that protects public resources and patient outcomes.