Use of Medical Care in the RAND Health Insurance Experiment

In the RAND Health Insurance Experiment (HIE), cost-sharing reduced the probability of using medical care across a wide spectrum of individual conditions and reasons for seeking care, perhaps somewhat more for acute illnesses and preventive care than for chronic disease. It had equivalent effects in curtailing use of highly effective and only rarely effective medical care, suggesting that it did not have an especially selective impact. Finally, it influenced care-seeking behaviors for persons of low income more than for persons of greater means, and it especially deterred the use of medical care by poor children. In interpreting these findings on the use of ambulatory care in the context of previously reported health status results from the HIE, this report, which originally appeared in Medical Care, v. 24, no. 9, Sept. 1986, suggests that one way to explain why so few adverse effects of cost-sharing were detected may be certain offsetting effects of the additional services received by persons with free care: i.e., at the margin, the negative effects of unnecessary or inappropriate care tend to balance the beneficial effects of appropriate care. This supposition leads the authors to consider several research and policy implications in the areas of measuring patient outcomes, improving the nature and dissemination of information to patients, improving quality-of-care assessment and assurance techniques, and assessing several health care financing options for the disadvantaged.