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By Katie Lannan

BOSTON, SEPT. 13, 2017....Outpatient hospital care will be a focus area for state officials as they explore drivers behind the 2.8 percent increase in total medical spending in Massachusetts last year.

Health care spending in Massachusetts climbed to $59 billion -- or $8,663 per capita -- in 2016, growing at a slower pace than the rates of over 4 percent tracked in the previous two years, according to a report released Wednesday by the Center for Health Information and Analysis, or CHIA.

The report identified hospital outpatient spending and pharmaceutical spending as the major factors contributing to the growth.

The $547.6 million increase in pharmacy spending accounted for 27.5 percent of new spending in 2016, and the $536.9 million increase in hospital outpatient spending accounted for 27 percent. While the rate of growth in pharmaceutical spending was slower last year than in 2015, hospital outpatient spending grew more rapidly.

Caitlin Sullivan, CHIA's director of policy, told the state's Health Policy Commission that the agency's data does not speak to what, exactly, caused the 5.5 percent hike in outpatient spending.

"We have certainly seen a slowdown in inpatient growth and an acceleration in hospital outpatient," she said, suggesting a "reasonable mind" could draw a connection there.

The Health Policy Commission plans to hold a two-day public hearing in October to more closely vet trends in health care costs. David Seltz, the commission's executive director, said outpatient spending will be "a focus area" for the report that results from that hearing.

"Are those utilization trends? Are they price trends? Are they physician practices that are being converted to hospital outpatients? That will be something we'll be able to answer a little bit more," Seltz said.

Massachusetts Health and Hospital Association President Lynn Nicholas said increases in outpatient spending merit additional attention.

"It is likely that a number of factors are propelling this change, including the transition of increasingly complex surgery from inpatient to outpatient settings, more encouragement for patients to have diagnostic/preventive screenings such as mammograms and colonoscopies, higher costs for pharmaceuticals that are administered in outpatient settings, and growing use of observation services, which are considered outpatient care while physicians determine whether a patient needs to be admitted," Nicholas said in a statement. "Hospitals have been investing heavily in outpatient care and ambulatory care facilities to be able to provide care in the most appropriate setting, in line with state and federal policy directives. It's possible that CHIA's most recent report is reflecting this investment."

Nicholas said that if the increase is a result of transitioning care from higher-cost settings to lower-cost settings, it could "be a logical trend."


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