The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Use of Experiments in Health Care

  • Joseph P. Newhouse
Reference work entry


Two of the best known randomised trials in health economics are described in detail in this chapter: the RAND Health Insurance Experiment and the Oregon Health Insurance Experiment. The RAND Experiment randomised participants to health insurance plans that varied the cost of care from free care at one extreme to an approximation of a large deductible at the other. Those on the free care plan increased their use of services by about 30% relative to those on the large deductible plan. For the average participant there appeared to be little or no effect on health outcomes from this change in use. Among the poor with hypertension (high blood pressure), however, blood pressure was better controlled on the free care plan, which projected to about a 10% decrease in the risk of mortality. The Oregon Experiment randomised its participants to Medicaid or to remaining uninsured; those with Medicaid insurance used more services and suffered less from depression.


Field experiments Health insurance Health insurance experiment Randomised trials 

JEL Classifications

I13 I18 C9 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Joseph P. Newhouse
    • 1
  1. 1.