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

Jason Abaluck, Leila Agha, Christopher Kabrhel, Ali Raja and Arjun Venkatesh

No 19956, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: I0 I12 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-hea
Note: AG EH PE
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Published as Abaluck, Jason, Leila Agha, Chris Kabrhel, Ali Raja, and Arjun Venkatesh. 2016. "The Determinants of Productivity in Medical Testing: Intensity and Allocation of Care." American Economic Review, 106 (12): 3730-64.

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