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

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Listed:
  • Jason Abaluck
  • Leila Agha
  • Christopher Kabrhel
  • Ali Raja
  • Arjun Venkatesh

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

  • Jason Abaluck & Leila Agha & Christopher Kabrhel & Ali Raja & Arjun Venkatesh, 2014. "Negative Tests and the Efficiency of Medical Care: What Determines Heterogeneity in Imaging Behavior?," NBER Working Papers 19956, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:19956
    Note: AG EH PE
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    References listed on IDEAS

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    Cited by:

    1. Rudy Douven & Minke Remmerswaal & Robin Zoutenbier, 2015. "Do Extrinsically Motivated Mental Health Care Providers Have Better Treatment Outcomes?," CPB Discussion Paper 319.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Diane Alexander, 2020. "How Do Doctors Respond to Incentives? Unintended Consequences of Paying Doctors to Reduce Costs," Journal of Political Economy, University of Chicago Press, vol. 128(11), pages 4046-4096.
    3. Gautam Gowrisankaran & Keith A. Joiner & Pierre-Thomas Léger, 2017. "Physician Practice Style and Healthcare Costs: Evidence from Emergency Departments," NBER Working Papers 24155, National Bureau of Economic Research, Inc.
    4. Janet Currie & W. Bentley MacLeod, 2017. "Diagnosing Expertise: Human Capital, Decision Making, and Performance among Physicians," Journal of Labor Economics, University of Chicago Press, vol. 35(1), pages 1-43.
    5. Rudy Douven & Minke Remmerswaal & Robin Zoutenbier, 2015. "Do Extrinsically Motivated Mental Health Care Providers Have Better Treatment Outcomes?," CPB Discussion Paper 319, CPB Netherlands Bureau for Economic Policy Analysis.

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    More about this item

    JEL classification:

    • I0 - Health, Education, and Welfare - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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