The Rand Experiment and Economical Health Care

Abstract

Does prepaid group practice actually reduce the cost of health care, or are the apparent reductions the result of a favorable selection of health risks? About 40 comparison studies have found that prepaid group practices reduce per capita cost some 10 to 40 per cent, largely as a result of a 25 to 45 per cent reduction in hospital use.¹ Although these findings have been replicated in many different employee groups and in studies that controlled for age and sex and sometimes tested for measurable differences in health status, the suspicion has always remained that somehow these savings might be . . .