Demand for Health & Healthcare - Price & Income elasticities of healthcare demand - Two important randomized experiments
5 important questions on Demand for Health & Healthcare - Price & Income elasticities of healthcare demand - Two important randomized experiments
What were two important randomized experiments?
- The RAND Health insurance experiment (1971 - 1982)
- Oregon Health insurance experiment (2008)
How was the RAND experiment designed?
- 7.700 selected individuals (<65 years of age; 6 regions).
- Randomly assigned to 4 cost-sharing levels: 0.25, 0.50, 0.75 & 0.95%
- Income dependent limit on out-of-pocket expenses (up to $1.000,-). (NB resulting in nonlinear coverage!)
What were the main findings from the RAND experiment about price elasticities?
- Mean price eslasticities -0.2
- Price elasticities vary across health services
- Reduction of care primarily due to less initiation of care (once they're in the price effect is smaller)
- Higher grades + faster learning
- Never study anything twice
- 100% sure, 100% understanding
How was the Oregon experiment designed?
- Natural experiment: lottery for low-income uninsured to get Medicaid insurance.
- Price variations between a randomly selected treatment group and a control group.
What were the main findings from the Oregon experiment about price elasticities?
- Treatment group selected by the lottery had substantively and statistically significantly higher healthcare utilization (including primary and preventive care as well as hospital care).
- Estimates seem slightly smaller than those found in RAND.
The question on the page originate from the summary of the following study material:
- A unique study and practice tool
- Never study anything twice again
- Get the grades you hope for
- 100% sure, 100% understanding
![Trustpilot Logo](/images/design_2020/lp/clp-trustpilot-en.png)