Copayments and Demand for Medical Care : The California Medicaid Experience.

by L. Jay Helms, Joseph P. Newhouse, Charles E. Phelps

Download eBook for Free

FormatFile SizeNotes
PDF file 1.3 MB

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

Employing a Zellner-type indirect regression technique, and data from the 1972 California Copayment Experiment, the authors attempt to assess the impact of a copayment requirement on utilization of health care resources by the poor. Focus is on three questions regarding effects of an increase in out-of-pocket cost of physician office visits: (1) Will such an increase inhibit demand for ambulatory care? (2) Will it increase or decrease demand for hospitalization? (3) How will it affect total resource cost of health care services, both in and out of hospitals? The results indicate that a $1 copayment requirement apparently decreases demand for physician visits by 8 percent and increases demand for hospital inpatient services by 17 percent. Although the confidence intervals are large, point estimates indicate that copayment increases overall program costs by a statistically insignificant 3 to 8 percent. Thus copayments could be self-defeating as a method of controlling medical costs in a welfare population. 29 pp. Ref.

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

Permission is given to duplicate this electronic document for personal use only, as long as it is unaltered and complete. Copies may not be duplicated for commercial purposes. Unauthorized posting of RAND PDFs to a non-RAND Web site is prohibited. RAND PDFs are protected under copyright law. For information on reprint and linking permissions, please visit the RAND Permissions page.

The RAND Corporation 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.