Negative Tests and the Efficiency of Medical Care: What Determines Heterogeneity in Imaging Behavior?
NBER Working Paper No. 19956
Issued in March 2014, Revised in August 2015
NBER Program(s):Aging, Health Care, Health Economics, Public Economics
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.
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Acknowledgments and Disclosures
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Document Object Identifier (DOI): 10.3386/w19956
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