Econometrics Public Policy

Trials in Health Policy

Scientists often use randomized controlled trials (RCT) to examine whether certain treatments have a causal effect on patient outcomes.  For social scientists, however, conducting an RCT is more difficult.  Nevertheless, there have been a number of health policy trials.

In a recent NEJM paper, Newhouse and Normand (2017) review some of these trials.  A summary is below:

Trials that vary prices paid by patients:

Trials that vary reimbursement.

  • RAND Health Insurance Experiment. This experiment also randomized people between traditional fee-for-service practices and an HMO where physicians were salaried employees and the HMO received a flat per-member, per-month payment.  Their study found that patients in the HMO had fewer hospitalizations compared to those in FFS practices.
  • Randomization for treatment of LDL cholesterol (LDL-C) . Physicians in the incentives arm were eligible to receive bonus payments when their patients met LDL-C goals and in the control arm no incentative payments were made.  The physician incentives did lead to a reduction in LDL-C.

The article also provides a summary of some of the key decisions researchers need to make when designing a health policy trial.  These decisions include:

  • What Inducement, if Any, Should Be Offered to Participants?
  • How Many Sites Should There Be?
  • How Long Should the Experiment Run?
  • How Should Individual Patients or Families Be Assigned to Treatments?
  • To What Degree Should Groups of Special Interest Be Oversampled?
  • What Baseline Physiological Characteristics, if Any, Should Be Measured?


  • Newhouse, Joseph P., and Sharon-Lise T. Normand. “Health Policy Trials.” New England Journal of Medicine 376, no. 22 (2017): 2160-2167.



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