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The Rand Health Insurance Study: a Spanner in the Works?
1012
undertake. The functions of early diagnosis, care of chronic disease, population screening, health promotion, and prevention of environmental disease are unevenly met by the present system; and this unevenness is of as much concern as the variation in provision of traditional care in general practice, which is the primary preoccupation’ of the discussion document. Secondly, the concentration on financial incentives obscures the fact that many of the difficulties faced by general practitioners in areas of social deprivation cannot be remedied solely in these terms. The promise of experimental contracts is a positive, if inadequate, recognition of the need for structural change where traditional methods of practice may be inappropriate. The green-paper is not simply about general practice but about all family-practitioner services, and it is published at the same time as the imaginative and hard-
In the mid-1970s the Rand team, financed by a massive grant from the US Government, began a series of linked randomised controlled trials designed to explore some of the effects of different methods of
hitting Cumberlege report (see p 1045) on community nursing. The contrast between Cumberlege and the green-paper is striking. Cumberlege emphasises the difficulty of providing community nursing teams in the absence of defined geographical populations, and hampered by a dual structure for both planning and
follows:
system of primary
care
needs
to
management. It asks for an enhanced role for the nurse the nurse practitioner) and a written commitment from each general practice to the primary health care team as a prerequisite for payment of the good practice. allowance. In many ways the green-paper fails to take up the challenge, focusing on the less contentious issues. The ultimate proof of the green-paper’s value must lie in the outcome. Despite its lack of vision and the tenor of uneasy compromise, its very restraint may permit today’s enthusiasm for reform within general practice to have its head. If even a few of the practical proposals commended therein are implemented by 1990 then the green-paper will have been worth waiting for. But that must be only the first stage in a continuing process of re-evaluation and improvement in primary care in the UK. It is good to possess a primary care system which is internationally admired. It will undoubtedly go the way of the Raj, however, if we seek to preserve institutions rather than objectives.
(ie,
The Rand Health Insurance Study: a Spanner in the Works? IN this issue (plO 17) Dr John Ware and his colleagues provide another important instalment in the unfolding saga of results from the juggernaut health insurance study by the Rand Corporation. If any readers around the world are not yet aware of this study, they should be. The latest publication-in some ways the most intriguing-provides an opportunity to review briefly all the findings up to this point.
providing health care.’ These studies involved 2000 experimental families with 1200 controls. The experimental families were randomly assigned to one of sixteen plans, about half of them for three years and half for five years (to test whether the longer period affected the results). Coinsurance (ie, payment by the user at time of use) varied from zero to 100%. In all plans that required out-of-pocket payments, these were limited to 15% of family income or less. Some families were assigned (randomly) to a health maintenance organisation in which, by definition, costs to the subscriber are fixed in advance. Ten years (and nearly$100 million) later, the key findings-before the present paper-appear to be as
financing
and
(a) People who paid nothing towards the cost of their care the time of use made substantially heavier demands on health services than those who paid. Total expenditure per head rose steadily as coinsurance (payment by the user) fell. The increase reflected more visits to physicians and (for adults, but not children) more hospital admissions. Once patients were admitted to hospital, cost-sharing appeared to make little difference. Expenditure per person for those with full insurance coverage was about 60% higher than for those 2 at
under the 95% coinsurance plan.2 (b) People with no cost-sharing also made substantially more use of emergency department services. Expenses incurred by them were 40% higher, and the difference was mainly attributable to less serious diagnoses. After control for insurance, poor people made substantially more use of emergency departments than others, their call on these services being 6407o greater.33 (c) The effects on health of these different levels of use appeared, however, to be small. For individuals with poor vision and for low-income people with high blood pressure, free care brought an improvement, but for most participants no significant effects were observed on eight other measures of health status and health habits.4 (d) Children whose families paid a percentage of costs made a third less use of services; this reduction appeared to make no perceptible difference to health status for the average child in the study, or for children at high risk.5 (e) In another of the linked trials, prepaid group practice proved substantially more economical than fee-for-service. The expenditure difference was approximately 25%, essentially because hospital admissions were 40% lower for those in the prepaid plan. However, there was no difference in the number of outpatient visits, and preventive visits were higher in the prepaid groups.6
1 Newhouse JP A design for a health insurance experiment. Inquiry 1974; 11: 5-27. 2 Newhouse JP, Manning WG, Morris CN, et al. Some interim results from a controlled trial of cost sharing in health insurance. N Engl J Med 1981; 305: 1501-07 3. O’Grady KF, Manning WG, Newhouse JP, Brook RH The impact of cost sharing on emergency department use. N EnglJ Med 1985; 313: 484-90 4 Brook RH, Ware JE, Rogers WH, et al Does free care improve adults’ health? N Engl J Med 1983, 309: 1426-34. 5. Valdez RB, Brook RH, Rogers WH, et al. Consequences of cost-sharing for children’s health Pediatrics 1985, 75: 952-61 6. Manning WG, Leibowitz A, Goldberg GA, Rogers WH, Newhouse JP A controlled trial of the effect ofa prepaid group practice on use of services. N EnglJ Med 1984. 310: 1505-10
1013
Step by step as these findings have been published, they have become absorbed into the conventional wisdom of health policy. In retrospect, several of them seem so obvious as barely to have justified research on this epic scale. But that may not be true-what now appears obvious might not have been so without the study. Moreover, it has quantified some of the interrelations between supply and demand in a way that could not have been done by theoretical reasoning and is therefore valuable for policy making. For example, what economists call elasticity of demand (the effect of price on volume of demand) is quantitatively illustrated by the Rand results. With the benefit of hindsight, none of the findings before the present paper is particularly surprising. In essence, people make fewer calls on health services if they have to pay when they use them than if they do not, yet the difference in demand appears to make little difference to their health. Moreover, prepaid arrangements (under which physicians have incentives to limit demand) are more economical than fee-forservice plans. All these conclusions seem to reinforce present policy directions, such as drives to increase efficiency, reduce "unnecessary" demand, and make people more cost-conscious.
So much for the backcloth of previous research. The Rand paper is linked with the study of prepaid group practice ("e" above) and (as in "c") asks the crucial question: "what is the impact on health status?" For those who began the experiment without health problems, the findings are, once again, that different patterns of uptake and methods of payment appear to make no measurable difference to health. Intriguingly, however, there does appear to be an impact for those at greater risk. What is more, the impact varies between rich and poor. The high-income, initially sick group did well by joining a health maintenance organisation (HMO)-their cholesterol levels dropped and their general health ratings improved, presumably benefiting from a greater emphasis on health promotion. By contrast, the low-income, high-risk group fared less well in an HMO than a fee-for-service system. This is the real jolt provided by the present paper-poor, high-risk category patients who were enrolled in the HMO reported worse health and more serious symptoms, and were even at greater risk of death. Why should this disconcerting finding have arisen? As with some of the earlier results, it is tempting to accept this new conclusion as correct and mobilise theories to explain it. Is it, for example, that poor people do not cope well with the greater bureaucracy of a managed system, such as an HMO (or, come to that, a National Health Service)? Or is it that they benefit less from conventional screening and health promotion programmes? Or do physicians pay rather less attention to less privileged patients when no direct payment for service is forthcoming? As so often with research, an unexpected finding is new
by no means conclusive. For the present it should alert everyone to the possibility that poor people may suffer from the side-effects of what are otherwise apparently sensible health policy reforms, even when the majority of the population gains from them. Since medicine should have a special responsibility for the poor, how they fare in any system (and in any changes to a system) is a key criterion by which a country must be judged. It is timely to be reminded of this by the Rand study. HOSPICE COMES OF AGE AFTER gradual expansion over the past fifteen years, United Kingdom hospices now control some 2000 beds and care for about 40 000 families a year; roughly half the L25 million cost is borne by the public purse. The increase in freestanding hospice units is more than matched by well over 100 home-nursing support teams. For all that a small proportion of deaths occurs in these units, hospices have trained and inspired many colleagues in the National Health Service. Indeed, the recent upgrading of care for the dying patient and his family is largely a hospice achievement. Only twenty years ago 12% of dying patients who, in the view of their family doctors, were receiving inadequate care at home could not be admitted to hospital because the beds were needed "more urgently".1 That policy would be unacceptable today. The hospices have aroused widespread popular support and have had good media coverage, but they are now beset by the problems of success. Despite the cautious approach recommended by the National Cancer Subcommittee report on Terminal Care,22 too many new hospices are being planned. There is growing competition for skills, money, and patients. The need for full coordination in the planning and provision of terminal care services is increasingly accepted, but this does not necessarily fit in with local enthusiasms; somehow the idealism has to be harnessed without being frustrated, but the days of uncontrolled growth are over. The objectives of the hospice movement are well known: to palliate the isolation, anxiety, and fear associated with incurable illness, to maintain independence as long and as comfortably as possible, and to provide the best possible symptom-control, an easy, dignified ending, and support in bereavement. How well these aims are being achieved is less certain. A few selected hospice centres of excellence3° have shown a superior quality of care but there has been little impartial review of hospice performance on a large scale, although spontaneous support for such review has been expressed from within the hospice movement itself and research is proceeding. All this makes the American National Hospice Study of great interest.5 Whilst differences in culture and health-care systems mean that the findings may not be directly applicable to other countries, many lessons seem valuable and interesting, and tend to confirm the findings of the first classical study from the USA by Kane and his colleagues.6 Kane looked at a randomised sample of 1 Wilkes E. Terminal cancer at home Lancet 1965, 1. 799-801. 2. Terminal Care. Report of a national cancer subcommittee working group London:
DHSS, 1980 3 Parkes CM. Terminal Care 4
5 6
Evaluation of in-patient services of St Christopher’s Hospice. Postgrad Med J1979; 55: 517. Hinton JM. Comparison of places and policies for terminal care Lancet 1979; 1: 29-32. National Hospice Study. J Chron Dis 1986; 39: 1-61 Kane RL. Wales J. Bernsteien L. Leibowitz A, Kaplan S. A randomised controlled trial of hospice care Lancet 1984; i: 890-94
undertake. The functions of early diagnosis, care of chronic disease, population screening, health promotion, and prevention of environmental disease are unevenly met by the present system; and this unevenness is of as much concern as the variation in provision of traditional care in general practice, which is the primary preoccupation’ of the discussion document. Secondly, the concentration on financial incentives obscures the fact that many of the difficulties faced by general practitioners in areas of social deprivation cannot be remedied solely in these terms. The promise of experimental contracts is a positive, if inadequate, recognition of the need for structural change where traditional methods of practice may be inappropriate. The green-paper is not simply about general practice but about all family-practitioner services, and it is published at the same time as the imaginative and hard-
In the mid-1970s the Rand team, financed by a massive grant from the US Government, began a series of linked randomised controlled trials designed to explore some of the effects of different methods of
hitting Cumberlege report (see p 1045) on community nursing. The contrast between Cumberlege and the green-paper is striking. Cumberlege emphasises the difficulty of providing community nursing teams in the absence of defined geographical populations, and hampered by a dual structure for both planning and
follows:
system of primary
care
needs
to
management. It asks for an enhanced role for the nurse the nurse practitioner) and a written commitment from each general practice to the primary health care team as a prerequisite for payment of the good practice. allowance. In many ways the green-paper fails to take up the challenge, focusing on the less contentious issues. The ultimate proof of the green-paper’s value must lie in the outcome. Despite its lack of vision and the tenor of uneasy compromise, its very restraint may permit today’s enthusiasm for reform within general practice to have its head. If even a few of the practical proposals commended therein are implemented by 1990 then the green-paper will have been worth waiting for. But that must be only the first stage in a continuing process of re-evaluation and improvement in primary care in the UK. It is good to possess a primary care system which is internationally admired. It will undoubtedly go the way of the Raj, however, if we seek to preserve institutions rather than objectives.
(ie,
The Rand Health Insurance Study: a Spanner in the Works? IN this issue (plO 17) Dr John Ware and his colleagues provide another important instalment in the unfolding saga of results from the juggernaut health insurance study by the Rand Corporation. If any readers around the world are not yet aware of this study, they should be. The latest publication-in some ways the most intriguing-provides an opportunity to review briefly all the findings up to this point.
providing health care.’ These studies involved 2000 experimental families with 1200 controls. The experimental families were randomly assigned to one of sixteen plans, about half of them for three years and half for five years (to test whether the longer period affected the results). Coinsurance (ie, payment by the user at time of use) varied from zero to 100%. In all plans that required out-of-pocket payments, these were limited to 15% of family income or less. Some families were assigned (randomly) to a health maintenance organisation in which, by definition, costs to the subscriber are fixed in advance. Ten years (and nearly$100 million) later, the key findings-before the present paper-appear to be as
financing
and
(a) People who paid nothing towards the cost of their care the time of use made substantially heavier demands on health services than those who paid. Total expenditure per head rose steadily as coinsurance (payment by the user) fell. The increase reflected more visits to physicians and (for adults, but not children) more hospital admissions. Once patients were admitted to hospital, cost-sharing appeared to make little difference. Expenditure per person for those with full insurance coverage was about 60% higher than for those 2 at
under the 95% coinsurance plan.2 (b) People with no cost-sharing also made substantially more use of emergency department services. Expenses incurred by them were 40% higher, and the difference was mainly attributable to less serious diagnoses. After control for insurance, poor people made substantially more use of emergency departments than others, their call on these services being 6407o greater.33 (c) The effects on health of these different levels of use appeared, however, to be small. For individuals with poor vision and for low-income people with high blood pressure, free care brought an improvement, but for most participants no significant effects were observed on eight other measures of health status and health habits.4 (d) Children whose families paid a percentage of costs made a third less use of services; this reduction appeared to make no perceptible difference to health status for the average child in the study, or for children at high risk.5 (e) In another of the linked trials, prepaid group practice proved substantially more economical than fee-for-service. The expenditure difference was approximately 25%, essentially because hospital admissions were 40% lower for those in the prepaid plan. However, there was no difference in the number of outpatient visits, and preventive visits were higher in the prepaid groups.6
1 Newhouse JP A design for a health insurance experiment. Inquiry 1974; 11: 5-27. 2 Newhouse JP, Manning WG, Morris CN, et al. Some interim results from a controlled trial of cost sharing in health insurance. N Engl J Med 1981; 305: 1501-07 3. O’Grady KF, Manning WG, Newhouse JP, Brook RH The impact of cost sharing on emergency department use. N EnglJ Med 1985; 313: 484-90 4 Brook RH, Ware JE, Rogers WH, et al Does free care improve adults’ health? N Engl J Med 1983, 309: 1426-34. 5. Valdez RB, Brook RH, Rogers WH, et al. Consequences of cost-sharing for children’s health Pediatrics 1985, 75: 952-61 6. Manning WG, Leibowitz A, Goldberg GA, Rogers WH, Newhouse JP A controlled trial of the effect ofa prepaid group practice on use of services. N EnglJ Med 1984. 310: 1505-10
1013
Step by step as these findings have been published, they have become absorbed into the conventional wisdom of health policy. In retrospect, several of them seem so obvious as barely to have justified research on this epic scale. But that may not be true-what now appears obvious might not have been so without the study. Moreover, it has quantified some of the interrelations between supply and demand in a way that could not have been done by theoretical reasoning and is therefore valuable for policy making. For example, what economists call elasticity of demand (the effect of price on volume of demand) is quantitatively illustrated by the Rand results. With the benefit of hindsight, none of the findings before the present paper is particularly surprising. In essence, people make fewer calls on health services if they have to pay when they use them than if they do not, yet the difference in demand appears to make little difference to their health. Moreover, prepaid arrangements (under which physicians have incentives to limit demand) are more economical than fee-forservice plans. All these conclusions seem to reinforce present policy directions, such as drives to increase efficiency, reduce "unnecessary" demand, and make people more cost-conscious.
So much for the backcloth of previous research. The Rand paper is linked with the study of prepaid group practice ("e" above) and (as in "c") asks the crucial question: "what is the impact on health status?" For those who began the experiment without health problems, the findings are, once again, that different patterns of uptake and methods of payment appear to make no measurable difference to health. Intriguingly, however, there does appear to be an impact for those at greater risk. What is more, the impact varies between rich and poor. The high-income, initially sick group did well by joining a health maintenance organisation (HMO)-their cholesterol levels dropped and their general health ratings improved, presumably benefiting from a greater emphasis on health promotion. By contrast, the low-income, high-risk group fared less well in an HMO than a fee-for-service system. This is the real jolt provided by the present paper-poor, high-risk category patients who were enrolled in the HMO reported worse health and more serious symptoms, and were even at greater risk of death. Why should this disconcerting finding have arisen? As with some of the earlier results, it is tempting to accept this new conclusion as correct and mobilise theories to explain it. Is it, for example, that poor people do not cope well with the greater bureaucracy of a managed system, such as an HMO (or, come to that, a National Health Service)? Or is it that they benefit less from conventional screening and health promotion programmes? Or do physicians pay rather less attention to less privileged patients when no direct payment for service is forthcoming? As so often with research, an unexpected finding is new
by no means conclusive. For the present it should alert everyone to the possibility that poor people may suffer from the side-effects of what are otherwise apparently sensible health policy reforms, even when the majority of the population gains from them. Since medicine should have a special responsibility for the poor, how they fare in any system (and in any changes to a system) is a key criterion by which a country must be judged. It is timely to be reminded of this by the Rand study. HOSPICE COMES OF AGE AFTER gradual expansion over the past fifteen years, United Kingdom hospices now control some 2000 beds and care for about 40 000 families a year; roughly half the L25 million cost is borne by the public purse. The increase in freestanding hospice units is more than matched by well over 100 home-nursing support teams. For all that a small proportion of deaths occurs in these units, hospices have trained and inspired many colleagues in the National Health Service. Indeed, the recent upgrading of care for the dying patient and his family is largely a hospice achievement. Only twenty years ago 12% of dying patients who, in the view of their family doctors, were receiving inadequate care at home could not be admitted to hospital because the beds were needed "more urgently".1 That policy would be unacceptable today. The hospices have aroused widespread popular support and have had good media coverage, but they are now beset by the problems of success. Despite the cautious approach recommended by the National Cancer Subcommittee report on Terminal Care,22 too many new hospices are being planned. There is growing competition for skills, money, and patients. The need for full coordination in the planning and provision of terminal care services is increasingly accepted, but this does not necessarily fit in with local enthusiasms; somehow the idealism has to be harnessed without being frustrated, but the days of uncontrolled growth are over. The objectives of the hospice movement are well known: to palliate the isolation, anxiety, and fear associated with incurable illness, to maintain independence as long and as comfortably as possible, and to provide the best possible symptom-control, an easy, dignified ending, and support in bereavement. How well these aims are being achieved is less certain. A few selected hospice centres of excellence3° have shown a superior quality of care but there has been little impartial review of hospice performance on a large scale, although spontaneous support for such review has been expressed from within the hospice movement itself and research is proceeding. All this makes the American National Hospice Study of great interest.5 Whilst differences in culture and health-care systems mean that the findings may not be directly applicable to other countries, many lessons seem valuable and interesting, and tend to confirm the findings of the first classical study from the USA by Kane and his colleagues.6 Kane looked at a randomised sample of 1 Wilkes E. Terminal cancer at home Lancet 1965, 1. 799-801. 2. Terminal Care. Report of a national cancer subcommittee working group London:
DHSS, 1980 3 Parkes CM. Terminal Care 4
5 6
Evaluation of in-patient services of St Christopher’s Hospice. Postgrad Med J1979; 55: 517. Hinton JM. Comparison of places and policies for terminal care Lancet 1979; 1: 29-32. National Hospice Study. J Chron Dis 1986; 39: 1-61 Kane RL. Wales J. Bernsteien L. Leibowitz A, Kaplan S. A randomised controlled trial of hospice care Lancet 1984; i: 890-94