Consumer-Directed Health Plans and the RAND Health Insurance Experiment

Joseph P. Newhouse


Health Affairs. 2004;23(6) 

In This Article

What of the Future?

On the research front, the RAND experiment's findings about the effect of cost sharing on patients' care seeking have been widely accepted, but the effects of the newer managed care strategies on providers' and patients' behavior and their ultimate effects on patients' well-being are much less well established. Although much can be learned from observational data, future experiments with these tools are likely to be useful.

On the spending front, just as managed care did not ultimately hold back the wave of increased health care costs, there is little reason to think that today's increased initial cost sharing and more sophisticated tools such as disease management will hold it back, either. Although these tools should leave health care costs lower at each point in time than they otherwise would be, it is less clear that they will greatly affect the steady-state growth rate of costs. This conclusion assumes that the steady-state growth rate of costs is mainly influenced by the ongoing increase in the capabilities of medicine, capabilities that for the most part we and others around the world appear to want to pay for.[16] Nonetheless, to the degree that higher cost sharing for the nonpoor and the newer tools of managed care can lower the waste and inefficiency in present-day medicine, they will be welcome.