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With the continued growth in state health care expenditures, interest in cost containment remains high. This report identifies one area where expenditure reductions may be possible: avoidable hospitalizations. Initial research indicates that potentially unnecessary hospitalizations in Washington are an issue for the federal Medicare program, private insurers, and for the state's Medicaid program. Based on the findings in this paper, the Institute will undertake a more comprehensive examination of avoidable hospitalizations for Medicaid recipients.