While health maintenance organizations (HMOs) have lower medical costs than fee-for-service plans with the same benefits, it has not been clear whether the cost reductions in HMOs, achieved largely by reductions in hospital admissions, have adverse effects on health. This study addresses this important issue for nonaged adults. It describes the RAND Health Insurance Experiment, including the sample and methods of analysis. The findings indicate that the nonpoor suffer no harm to health through participation in an HMO and their enrollment should be encouraged. Low-income people who have health problems when they join an HMO appear to be worse off at the HMO compared with a fee-for-service plan.
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.
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 www.rand.org/pubs/permissions.
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.