Free for All?: Lessons from the Rand Health Insurance Experiment

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Joseph P. Newhouse, Rand Corporation. Insurance Experiment Group
Harvard University Press, Jan 1, 1993 - Business & Economics - 489 pages
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In the most important health insurance study ever conducted researchers at the RAND Corporation devised all experiment to address two key questions in health care financing: how much more medical care will people use if it is provided free of charge, and what are the consequences for their health? For three- or five-year periods the experiment measured both use and health outcomes in populations carefully selected to be representative of both urban and rural regions throughout the United States. Participants were enrolled in a range of insurance plans requiring different levels of copayment for medical care, from zero to 95 percent. The researchers found that in plans that reimbursed a higher proportion of the bill, patients used substantially more services - indeed, those who paid nothing used 40 percent more services than those required to pay a high deductible - but the effect on the health of the average person was negligible. In addition, participants who were assigned at random to a well-established health maintenance organization used hospitals substantially less than those in the fee-for-service system, again with no measurable effect on the health of the average person. This book collects in one place for the first time results previously dispersed through many journals over many years. Drawing comprehensive, coherent conclusions from an immense amount of data, it is destined to be a classic work serving as an invaluable reference for all those concerned with health care policy - health service researchers, policymakers in both the public and the private sectors, and students.
  

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Contents

Background
3
Effects of Cost Sharing on Use of Medical Services
29
Effects of Cost Sharing on Health Outcomes
181
Results at the Health Maintenance Organization
261
Administrative Lessons
309
Central Findings and Policy Implications
338
Appendix A Health Insurance Study Publications
373
Appendix B Further Explanation of Design Decisions
401
Schedule of Benefits in the Family Health
426
Comparison of the Finite Selection
431
References
465
Index
483
Copyright

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About the author (1993)

Joseph P. Newhouse is John D. MacArthur Professor of Health Policy and Management at Harvard University and Director of the Division of Health Policy Research and Education. He is the founding editor of the "Journal of Health Economics".

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