LAUSR

OBJECTIVE To evaluate trends and drivers of commercial ambulatory spending and price variation. DATA SOURCES AND STUDY SETTING Commercial claims data from the Massachusetts and Rhode Island All-Payer Claims Databases from 2016 to 2019. STUDY DESIGN Observational study of spending in major ambulatory care settings. We calculated per member per year spending, average price, and utilization rates to consider drivers of spending, and constructed site-specific price indices to evaluate price variation. DATA COLLECTION/EXTRACTION METHODS We analyzed commercial claims data from All-Payer Claims Databases in the two states. PRINCIPAL FINDINGS Ambulatory spending levels in Massachusetts were 38.0% higher than those in Rhode Island in 2019. Overall utilization rates were similar, but Massachusetts had a 6.2 percentage point higher share of visits occurring in hospital outpatient departments (HOPD). Average prices were 31.5% higher in Massachusetts in 2016 and 36.4% higher in 2019. We observed extensive price variation in both states across both office and HOPD settings. CONCLUSIONS States seeking to address increases in health care spending, including those with cost growth benchmarks and rate review policies, should consider additional interventions that mitigate market failures in the establishment of commercial health care prices.