RAND's Health Insurance Experiment (HIE)

CONCLUDED STUDY - conducted 1971-1986

The RAND Health Insurance Experiment (HIE), the most important health insurance study ever conducted, addressed two key questions in health care financing:

  • How much more medical care will people use if it is provided free of charge?
  • What are the consequences for their health?

The HIE project was started in 1971 and funded by the Department of Health, Education, and Welfare (now the Department of Health and Human Services). It was a 15-year, multimillion-dollar effort that to this day remains the largest health policy study in U.S. history. The study's conclusions encouraged the restructuring of private insurance and helped increase the stature of managed care.

Publication and Discussion

RAND Health Insurance Experiment (HIE): The Conversation Continues — 2007

The RAND Health Insurance Experiment (HIE) showed that modest cost sharing reduces use of services with negligible effects on health for the average person. Recent blog discussions have challenged the statistical basis for this finding. Dr. Joseph Newhouse, who directed the HIE, clarifies the issue.