Methods
The RAND HIE was begun in 1971 by a group led by health economist Joseph Newhouse and including health service researchers Robert Brook and John Ware; health economists Willard Manning, Emmett Keeler, Arleen Leibowitz, and Susan Marquis; and statisticians Carl Morris and Naihua Duan. The group set out to answer this question (among others): "Does free medical care lead to better health than insurance plans that require the patient to shoulder part of the cost?".
The team established an insurance company using funding from the then-United States Department of Health, Education, and Welfare. The company randomly assigned 5809 people to insurance plans that either had no cost-sharing, 25%, 50% or 95% coinsurance rates with a maximum annual payment of $1000. It also randomly assigned 1,149 persons to a staff model health maintenance organization (HMO), the Group Health Cooperative of Puget Sound. That group faced no cost sharing and was compared with those in the fee-for-service system with no cost sharing as well as an additional 733 members of the Cooperative who were already enrolled in it.
Read more about this topic: RAND Health Insurance Experiment
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—Herbert Hoover (1874–1964)