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Putting a Number on Efficient Healthcare

The role of technology and physician behaviour get a closer look

Healthcare spending accounts for a large chunk of the Canadian and American economies: it makes up 12 percent of GDP in Canada and 18 percent of GDP in the United States. But the challenge is not to make wholesale cuts in healthcare spending, says economist Jason Abaluck, but to determine how to get the most from existing expenditures. Abaluck, assistant professor of economics at Yale School of Management, delivered a research presentation at Queen’s School of Business arranged by The Monieson Centre for Business Research in Healthcare. In this video, he explores the practical implications of his research.

Video Highlights

3:07    Demographic trends will certainly cause healthcare spending to rise over time. But Abaluck says that, up to now, the introduction of new technology has been a key driver of soaring costs. Can policies be developed and incentives introduced, he asks, so that technology is used in the most efficient and productive way?

5:04    Research has shown that investing more money in certain areas, such as emergency care, would yield benefits. “What that suggests is that you can’t cut spending willy nilly. We have to find areas where there is clear evidence that you have money being spent but you don’t have resulting improvements in outcomes.”

6:20    Abaluck’s research involves developing a way to measure doctors’ medical testing behaviour, specifically in the area of CT scans for pulmonary embolisms. “Are they doing too many, too few, or the right number of scans, depending on the health of their patients? Then, given this measure, what are determinants of whether doctors are doing the right amount of medical testing?” He found that 70 to 90 percent of doctors seem to be erring on the side of too frequent testing.  

 9:42    Abaluck suggests it may be possible to use his research to develop a computer program that would help doctors decide which patients should be administered a CT scan.

12:14    There does not seem to be a link between doctors’ use of testing and the kind of hospital in which they operate (teaching versus non-teaching hospitals, profit versus nonprofit). Abaluck plans to study how doctors’ own experience impacts their testing behaviour; for example, are they more likely to order a test if they have just seen a patient with a pulmonary embolism?