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Health Services Research and the Health Insurance Experiment?
Editorial
Health Services Research and the Health Insurance Experiment?
With so much attention being paid today to the cost of health care coverage in the United States, I think of the Rand Health Insurance Experiment (RAND HIE) and how the results of this major health policy study might influence the current debate over alteration of the 2010 Affordable Care Act (“Obamacare”). Although 2016 marked the 40th anniversary of the RAND HIE, which was performed from 1971 to 1986, much of the results of the investigation remain applicable, despite substantial changes in prescription drug costs, managed care plans, and attention to evidence-based practice. The RAND HIE aimed to answer 2 key questions: 1. How much more medical care would people use if the care was provided free of charge? 2. What would be the consequences for their health?
In brief, the study showed that modest cost sharing reduced the use of services, with negligible effects on health for the average person (1). As a society, our task now is much the same as it was 41 years ago, namely, to find the best balance for cost sharing among individuals, corporations, and governments, remembering that health insurance improves peoples’ lives in general but costs a great amount of money.
Subsequent analyses of claims data from the HIE, for insurance plans with coinsurance and capped out-of-pocket spending, and statistically adjusting for the increased sickliness of those patients who exceeded the cap, showed that cost sharing reduced the number of health-related episodes but had little effect on the actual cost per episode (2). Further analyses of the HIE data also showed that the distributions of annual health care expenditures were highly unequal in the population representative of those covered by employer health plans (3); thus, any universal or sweeping plan would have to address this wide range of needs. Still further, the HIE showed that care via health maintenance organizations, compared with fee-forservice plans, was associated with lower costs because of reduced hospitalizations. However, it was also associated with lower client satisfaction and poorer health status among the subgroup with a limited income and poorer initial health status (4). Thus, we can all appreciate that funding health care is a complicated issue, and one that affects each of us. A balance among the different types of health insurance coverage might be useful. Interestingly, for the past 10 to 15 years, high-deductible, consumer-directed health plans that closely resembled the high-deductible plan of the RAND HIE have been used. Also, when these were combined with managed care plans, the 2 approaches complemented one another in that the former is directed primarily at the initiation of care for an episode of illness and the latter at the costliness of episodes, especially ongoing chronic disease episodes (5). With health care reform on everyone’s mind, I hope that our national leaders can focus on the science that our health services researchers produce, and use the information wisely to the benefit of us all. D. Scot Malay, DPM, MSCE, FACFAS Editor The Journal of Foot & Ankle SurgeryÒ
References 1. Rand Corporation. The Health Insurance Experiment: A Classic RAND Study Speaks to the Current Health Care Reform Debate. Available at: https://www.rand.org/ pubs/research_briefs/RB9174.html. Accessed May 4, 2017. 2. Keeler EB, Rolph JE. How cost sharing reduced medical spending of participants in the health insurance experiment. JAMA 249:2220–2227, 1983. 3. Russell LB, Chaudhuri A. The inequality of medical expenditures for several years in a healthy, nonelderly population. Med Care 30:908–916, 1992. 4. Wagner EH, Bledsoe T. The Rand Health Insurance Experiment and HMOs. Med Care 28:191–200, 1990. 5. Newhouse JP. Consumer-directed health plans and the RAND Health Insurance Experiment. Health Aff (Millwood) 23:107–113, 2004.
1067-2516/$ - see front matter Ó 2017 by the American College of Foot and Ankle Surgeons. All rights reserved. http://dx.doi.org/10.1053/j.jfas.2017.05.023
Health Services Research and the Health Insurance Experiment?
With so much attention being paid today to the cost of health care coverage in the United States, I think of the Rand Health Insurance Experiment (RAND HIE) and how the results of this major health policy study might influence the current debate over alteration of the 2010 Affordable Care Act (“Obamacare”). Although 2016 marked the 40th anniversary of the RAND HIE, which was performed from 1971 to 1986, much of the results of the investigation remain applicable, despite substantial changes in prescription drug costs, managed care plans, and attention to evidence-based practice. The RAND HIE aimed to answer 2 key questions: 1. How much more medical care would people use if the care was provided free of charge? 2. What would be the consequences for their health?
In brief, the study showed that modest cost sharing reduced the use of services, with negligible effects on health for the average person (1). As a society, our task now is much the same as it was 41 years ago, namely, to find the best balance for cost sharing among individuals, corporations, and governments, remembering that health insurance improves peoples’ lives in general but costs a great amount of money.
Subsequent analyses of claims data from the HIE, for insurance plans with coinsurance and capped out-of-pocket spending, and statistically adjusting for the increased sickliness of those patients who exceeded the cap, showed that cost sharing reduced the number of health-related episodes but had little effect on the actual cost per episode (2). Further analyses of the HIE data also showed that the distributions of annual health care expenditures were highly unequal in the population representative of those covered by employer health plans (3); thus, any universal or sweeping plan would have to address this wide range of needs. Still further, the HIE showed that care via health maintenance organizations, compared with fee-forservice plans, was associated with lower costs because of reduced hospitalizations. However, it was also associated with lower client satisfaction and poorer health status among the subgroup with a limited income and poorer initial health status (4). Thus, we can all appreciate that funding health care is a complicated issue, and one that affects each of us. A balance among the different types of health insurance coverage might be useful. Interestingly, for the past 10 to 15 years, high-deductible, consumer-directed health plans that closely resembled the high-deductible plan of the RAND HIE have been used. Also, when these were combined with managed care plans, the 2 approaches complemented one another in that the former is directed primarily at the initiation of care for an episode of illness and the latter at the costliness of episodes, especially ongoing chronic disease episodes (5). With health care reform on everyone’s mind, I hope that our national leaders can focus on the science that our health services researchers produce, and use the information wisely to the benefit of us all. D. Scot Malay, DPM, MSCE, FACFAS Editor The Journal of Foot & Ankle SurgeryÒ
References 1. Rand Corporation. The Health Insurance Experiment: A Classic RAND Study Speaks to the Current Health Care Reform Debate. Available at: https://www.rand.org/ pubs/research_briefs/RB9174.html. Accessed May 4, 2017. 2. Keeler EB, Rolph JE. How cost sharing reduced medical spending of participants in the health insurance experiment. JAMA 249:2220–2227, 1983. 3. Russell LB, Chaudhuri A. The inequality of medical expenditures for several years in a healthy, nonelderly population. Med Care 30:908–916, 1992. 4. Wagner EH, Bledsoe T. The Rand Health Insurance Experiment and HMOs. Med Care 28:191–200, 1990. 5. Newhouse JP. Consumer-directed health plans and the RAND Health Insurance Experiment. Health Aff (Millwood) 23:107–113, 2004.
1067-2516/$ - see front matter Ó 2017 by the American College of Foot and Ankle Surgeons. All rights reserved. http://dx.doi.org/10.1053/j.jfas.2017.05.023