Aviva Aron-Dine

TL;DR: The famous RAND Health Insurance Experiment is re-present and the famous RAND estimate that the elasticity of medical spending with respect to its out-of-pocket price is -0.2 is considered, emphasizing the challenges associated with summarizing the experimental treatment effects from non-linear health insurance contracts using a single price elasticity.

TL;DR: In this paper, the authors investigate whether healthcare utilization responds to the dynamic incentives created by the nonlinear nature of health insurance contracts and find a statistically significant response of initial utilization to the future price, rejecting the null that individuals respond only to the spot price.

TL;DR: The results reject the null of completely myopic behavior and point to the empirical importance of accounting for dynamic incentives in analyses of the impact of health insurance on medical utilization.

TL;DR: Using data from employer-provided health insurance and Medicare Part D, a statistically significant response of initial utilization to the future price is found, rejecting the null that individuals respond only to the spot price.

TL;DR: The authors re-examine the analysis from the famous RAND Health Insurance Experiment from the 1970s on the impact of consumer cost sharing in health insurance on medical spending and examine potential threats to the validity of a causal interpretation of the experimental treatment effects stemming from different study participation and differential reporting of outcomes across treatment arms.