Realization of Low-Probability Clinical Risks and Physician Behavior

Ity Shurtz, Yoav Goldstein and Gabriel Chodick

American Journal of Health Economics, 2024, vol. 10, issue 1, 132 - 157

Abstract: We examine whether primary care physicians alter their clinical decision making following realizations of low-probability risks among their patients—events of colon cancer diagnoses. Relying on comprehensive administrative visit–level data from a large Israeli HMO, we find that physicians substantially increase their use of colonoscopy tests during the first 3 months following colon cancer diagnosis and that in the subsequent 12 months, the effect dissipates. Considering that in our setting, it is unlikely that colon cancer diagnoses convey information in the traditional sense, these results indicate the existence of attention effects. Unexpected diagnoses induce a stronger physician response, and the increase in the use of colonoscopy tests is more pronounced among patients who are similar to the patient diagnosed with colon cancer, in line with recent work on cognitive mechanisms and memory where surprises and associative memory play a key role in decision making. We find no evidence that the quality of colonoscopy tests decreases with the increase in their use, suggesting that in response to recent colon cancer diagnoses, physicians increase adherence to colonoscopy tests among their at-risk patients rather than merely lowering the cutoff risk level of prescribing colonoscopy tests.

Date: 2024
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