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American Economic Review Vol. 106 No. 12 2016

The Determinants of Productivity in Medical Testing: Intensity and Allocation of Care

Jason Abaluck1; Leila Agha2; Chris Kabrhel3; Ali S. Raja4; Arjun K. Venkatesh5

1 Yale University, 165 Whitney Avenue, New Haven, CT 06520, and NBER (e-mail: ) · 2 Department of Economics, Dartmouth College, 6016 Rockefeller Hall, Hanover, NH 03755, and NBER (e-mail: ) · 3 Department of Emergency Medicine, Massachusetts General Hospital, Zero Emerson Place, Suite 3B, Boston, MA 02114, and Harvard University (e-mail: ) · 4 Massachusetts General Hospital and Harvard University (e-mail: ) · 5 Yale-New Haven Hospital, and Yale University (e-mail: )

open access

Abstract

A large body of research has investigated whether physicians overuse care. There is less evidence on whether, for a fixed level of spending, doctors allocate resources to patients with the highest expected returns. We assess both sources of inefficiency, exploiting variation in rates of negative imaging tests for pulmonary embolism. We document enormous across-doctor heterogeneity in testing conditional on patient population, which explains the negative relationship between physicians' testing rates and test yields. Furthermore, doctors do not target testing to the highest risk patients, reducing test yields by one-third. Our calibration suggests misallocation is more costly than overuse.

DOI
10.1257/aer.20140260
Volume
106
Issue
12
Pages
3730-3764
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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