The RAND Health Insurance Experiment (RAND HIE) was an experimental study from 1974 to 1982 of health care costs, utilization and outcomes in the United States, which assigned people randomly to different kinds of plans and followed their behavior. Because it was a randomized controlled trial, it provided stronger evidence than the more common observational studies and concluded that cost sharing reduced "inappropriate or unnecessary" medical care (overutilization) but also reduced "appropriate or needed" medical care. Methods The RAND HIE was begun in 1971 by a group led by health economist Joseph Newhouse and including health service researchers Robert Brook and John Ware; health economists Willard Manning, Emmett Keeler, Arleen Leibowitz, and Susan Marquis; and statisticians Carl Morris and Naihua Duan. The group set out to answer this question (among others): "Does free medical care lead to better health than insurance plans that require the patient to shoulder part of the cost?" The team established an insurance company using funding from the United States Department of Health, Education, and Welfare. The company randomly assigned 5809 people to insurance plans that had no cost sharing, 25%, 50% or 95% coinsurance rates with a maximum annual payment of $1000. It also randomly assigned 1,149 persons to a staff model health maintenance organization (HMO), the Group Health Cooperative of Puget Sound. That group faced no cost sharing and was compared with those in the fee-for-service system with no cost sharing as well as an additional 733 members of the Cooperative who were already enrolled in it. Findings An early paper with interim results from the RAND HIE concluded that health insurance without coinsurance "leads to more people using services and to more services per user," referring to both outpatient and inpatient services. Subsequent RAND HIE publications "rule[d] out all but a minimal influence, favorable or adverse, of free care for the average participant" but determined that a "low income initially sick group assigned to the HMO... [had a] greater risk of dying" than those assigned to fee-for-service (FFS) care. The experiment also demonstrated that cost-sharing reduced "appropriate or needed" medical care as well as "inappropriate or unnecessary" medical care. Studies of specific conditions and diseases in the RAND HIE data found, for example, that the decrease in use of medical services had adverse effects on visual acuity and on blood pressure control. A Rand summary said, "The projected effect was about a 10