Department of Emergency Medicine
Massachusetts General Hospital
55 Fruit St, Clinics Building 115
Boston, MA 02114
NBER Working Papers and Publications
|March 2014||Negative Tests and the Efficiency of Medical Care: What Determines Heterogeneity in Imaging Behavior?|
with Jason Abaluck, Leila Agha, Ali Raja, Arjun Venkatesh: w19956
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.