Negative Tests and the Efficiency of Medical Care: What Determines Heterogeneity in Imaging Behavior?

65 Pages Posted: 10 Mar 2014 Last revised: 16 Mar 2014

See all articles by Jason Abaluck

Jason Abaluck

Yale School of Management; National Bureau of Economic Research (NBER)

Leila Agha

Boston University

Chris Kabrhel

Harvard University - Massachusetts General Hospital

Ali Raja

Harvard University - Department of Emergency Medicine

Arjun Venkatesh

Yale University

Date Written: March 2014

Abstract

We develop a model of the efficiency of medical testing based on rates of negative CT scans for pulmonary embolism. The model is estimated using a 20% sample of Medicare claims from 2000- 2009. We document enormous across-doctor heterogeneity in testing decisions conditional on patient risk and show it explains the negative relationship between physicians' testing frequencies and test yields. Physicians in high spending regions test more low-risk patients. Under calibration assumptions, 84% of doctors test even when costs exceed expected benefits. Furthermore, doctors do not apply observables to target testing to the highest risk patients, substantially reducing simulated test yields.

Suggested Citation

Abaluck, Jason and Agha, Leila and Kabrhel, Chris and Raja, Ali and Venkatesh, Arjun, Negative Tests and the Efficiency of Medical Care: What Determines Heterogeneity in Imaging Behavior? (March 2014). NBER Working Paper No. w19956. Available at SSRN: https://ssrn.com/abstract=2406758

Jason Abaluck (Contact Author)

Yale School of Management

165 Whitney Avenue
New Haven, CT 06511
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Leila Agha

Boston University ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States

Chris Kabrhel

Harvard University - Massachusetts General Hospital

55 Fruit Street
Boston, MA 02114
United States

Ali Raja

Harvard University - Department of Emergency Medicine ( email )

75 Francis St
Boston, MA 02115
United States

Arjun Venkatesh

Yale University

New Haven, CT 06520
United States

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