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In: Economics

The RAND Health Insurance Experiment found that inpatient and outpatient care were complements. What implications does...

The RAND Health Insurance Experiment found that inpatient and outpatient care were complements. What implications does this have regarding the potential for saving money by increasing coverage for outpatient care?

Solutions

Expert Solution

Insurance for inpatient care is more prevalent than insurance for outpatient care since the insurance companies give a wider coverage for inpatients than outpatients. Outpatient care is often seen as consulting than treatment. But people forget than inpatient care incurs a lot of human costs which are inclusive in the insurance coverage .

In order to reduce this when the scope of outpatient care is increased, people will not tend to get hospitalized and a lot of people will tend to get benefited. Outpatient care will increase the benefits to patients by reducing the human and other overhead costs associated with that of inpatients.

This will in turn stand as profits for the hospitals and will help them to offer better services to patients hence increasing the coverage for outpatient care will in-turn reduce the costs incurred by inpatient coverage and increase benefits for all patients .


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