Friday, October 26, 2007

RAND study III

I have more thoughts on the 1970s RAND corporation study on the effects of health insurance copayments on demand for care and on health outcomes.

I haven't actually read the report of the study.

RAND found a dramatic effect of copayments on demand for health care. The experiment differs from actual policy proposals because the RAND insurance plans lasted 5 years not forever. I wonder if people covered by the plans with copayments delayed care, that is if they had higher demand for care after the study ended than those with full insurance.

The effects of a permanent plan with copayments should be less than the effect, during the period of the plan, of a temporary plan with copayments. By delaying an intervention, the participants could avoid, not just delay, the copayment. RAND would consider this the elimination of a health care cost, not just a delay.

It is easy to see if this is a problem, because it depends on time until the end of the experiment. If the reduction in health care demand became larger as the end of the experiment approached, RAND has another problem.

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