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Healthcare spending growth stalls in Massachusetts

However, the adoption of alternative payment models grew by 6.3 percentage points in the commercial market.

Jeff Lagasse, Associate Editor

Healthcare spending in Massachusetts grew 2.8 percent in 2016 to a total of $59 billion, falling short of the cost growth benchmark of 3.6 percent, according to new findings from the Center for Health Information and Analysis.

Overall spending increased across all major insurance categories, but at more moderate rates than in prior years, and declined for the net cost of private health insurance. Pharmacy and hospital outpatient spending were the largest drivers of total healthcare expenditures growth.

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The adoption of alternative payment models grew by 6.3 percentage points in the commercial market in 2016, driven by a 13.5 percentage point increase among PPO members, according to CHIA.

Private commercial insurance enrollment of individual purchasers grew 34.5 percent between 2015 and 2016, while enrollment in ESI decreased slightly by 0.6 percent. Premiums for individual purchasers, meanwhile, declined by 3.4 percent from 2015 to 2016, while ESI premiums rose 3.9 percent.

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Between 2015 and 2016, member cost-sharing continued to grow at a faster rate -- 4.4 percent -- than average income and premiums.

Total managed expenditure increased in 2016 for commercial and MassHealth MCO members, and decreased for Medicare Advantage members.

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Despite the findings, more money is spent on healthcare for Massachusetts residents than those in every other state save Alaska. Still, according to the Massachusetts Biotechnology Council, spending on pharmaceuticals grew at half the rate last year compared to 2015.

One of the main drivers of healthcare spending in the state last year was tests and procedures that did not include an overnight stay, according to the report. That may be due to a judicious use of money as care shifts from inpatient to outpatient, but insurers maintain that Massachusetts could slash costs further by prompting consumers to get tested in standalone clinics or doctors offices rather than hospitals.

In 2015, healthcare spending in the state rose by 4.8 percent, driven largely by an increase in MassHealth enrollment and spending on pharmaceuticals. That trend appears to have slowed.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com

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