Question 7.61
31. Will people spend less on healthcare if their health insurance requires them to pay some part of the cost themselves? An experiment on this issue asked if the percentage of medical costs that is paid by health insurance has an effect either on the amount of medical care that people use or on their health. The treatments were four insurance plans, each of which paid all medical costs above a ceiling. Below the ceiling, the plans paid 100%, 75%, 50%, or 0% of costs incurred. Outline the design of a randomized comparative experiment suitable for this study.
31.
This is a randomized comparative experiment with four branches, similar to Figure 7.3 but with four groups. The “flowchart” outline must show random assignment of subjects to groups, the four treatments, and the response variable (healthcare spending).
We can’t show the group sizes because we don’t know how many people or households are available to participate.