Question

How do findings of the Rand Health Insurance Experiment reinforce the relationship between growth in third-party reimbursement and increase in health care costs?

Answer 1

Answer:

The Rand Health Insurance Experiment supports the relationship between growth in 3rd party reimbursement and increase in health care costs. This plan cost-sharing lowers the total costs compared to a free plan with a 25% patient co-insurance resulted in a 19% decline in expenditures.

In this patients or consumers do not typically pay for the most of health benefits and services used. Cost-sharing leads to lowering utilization costs. It does not affect the morality risk or measures of health even lower utilization case.