Coinsurance and the demand for physician services: four years later.

In 1971 a study was made of the effects of a 25-percent coinsurance provision on the demand for physician services under a comprehensive prepaid plan for medical care. Comparing physician utilization rates in 1966 (the year before coinsurance was introduced) and 1968 (the first calendar year after the change) showed that coinsurance led to a 24-percent decline in the per capita number of all physician visits that held true regardless of how the data were examined--whether by demographic characteristics of the study population, physician specialization, or place of visit. This effect of coinsurance could be temporary--a kind of shock effect that would wear off. Since there was no conclusive proof of this hypothesis, the authors conducted a followup study, comparing physician utilization rates in 1972 and 1968. They found no evidence of any upward trend in the use of physician services. The overall utilization rate was much the same in 1972 as in 1968, and the rates of the demographic subgroups and types of visits were either much the same or slightly lower. Equally important was the finding that the plan had become relatively unattractive for families in the lowest socioeconomic group who constituted a smaller proportion of the 1972 plan membership than of the pre-coinsurance membership.