Cover: An Estimate of the Impact of Deductibles on the Demand for Medical Care Services.

An Estimate of the Impact of Deductibles on the Demand for Medical Care Services.

Published 1978

by Joseph P. Newhouse, John E. Rolph, Bryant M. Mori, M. Murphy


Download eBook for Free

FormatFile SizeNotes
PDF file 2.2 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.


Purchase Print Copy

 Format Price
Add to Cart Paperback58 pages $20.00

Using data on insurance premiums for policies with varying deductibles, together with a distribution of medical expenses, the authors estimate the relationship between deductibles and the demand for medical care. Estimates are limited to deductibles ranging from $50 to $1000. Results indicate that demand is quite sensitive to variation in a deductible in the region of $50 and becomes steadily less sensitive as the deductible rises above $75. This finding is consistent with a theoretical model of demand for medical care given a deductible, and with what is presently known about the responsiveness of demand to variation in coinsurance. Conclusions are that the size of the deductible will importantly affect the amount of public funds used in a national health insurance program and thus the distribution of payments among the population in a tax-financed program. No evidence was found that increasing the deductible increases expenditures by deterring efficacious preventive care, but the data are not well suited to test this hypothesis. 58 pp. Ref.

This report is part of the RAND report series. The report was a product of RAND from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.