Health Insurance Exam

2

Health Insurance

E03-052

Eksamen ved

Københavns Universitet i

Health Insurance

Det Sundhedsvidenskabelige Fakultet

17. juni 2013

Eksamensnummer: 2

17. juni 2013

Side 1 af 8

2

Health Insurance

E03-052

Question 1: RAND Health Insurance Experiment (RAND-HIE) a) Describe the main objectives and the study design of the RAND-HIE. The main objectives of the RAND-HIE were to examine how different health insurance plans with various copayment features affected utilization of health services including physician services, hospital services, dentist care, nursing homes and drugs. The people involved in the study were randomized into different plans. The different plans had different sizes of copayments. The sizes of the copayments varied from 0 % copayment to 95 % copayment. All insurance plans had a stop loss feature included. As aforementioned the study was carried out to examine the utilization effects of copayments. The study provided valuable information on how to reduce moral hazard in health insurance.

b) What were the findings of the RAND-HIE? The RAND-HIE found that the higher the copayments were the less health care was used. One of the most interesting things however was that almost all the difference in utilization could be seen from comparing the 0 % copayment plan and the 25 % copayment plan. The difference between the 25 % copayment plan and the 95 % copayment plan was significant, but not nearly as significant as the difference between the 0 % copayment plan and the 25 % copayment plan. Overall the RAND-HIE found that health services in general has a price elasticity of -0,2 meaning that if prices go up by 10 %, utilization will fall by 2 %. The effect of copayments however differed significantly depending on type of service. Both utilization and costs to hospital services, ambulatory services, drugs, dental services and nursing homes was higher in the 0 % copayment plan compared to the other plans. Other...