David C. Chan
Associate Professor of Health Policy
Stanford University
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Teamwork and Moral Hazard: Evidence from the Emergency Department
Journal of Political Economy, May 2016
Abstract
I investigate how teamwork may reduce moral hazard by joint monitoring and management. I study two organizational systems differing in the extent to which physicians may mutually manage work: Physicians are assigned patients in a "nurse-managed" system but divide patients between themselves in a "self-managed" system. The self-managed system increases throughput productivity by reducing a "foot-dragging" moral hazard, in which physicians prolong patient stays as expected future work increases. I find evidence that physicians in the same location have better information about each other and that, in the selfmanaged system, they use this information to assign patients.
Appendix A
Appendix B
The Efficiency of Slacking Off: Evidence from the Emergency Department
Econometrica, May 2018
Abstract
Work schedules play an important role in utilizing labor in organizations. In this study of emergency department physicians in shift work, schedules induce two distortions: First, physicians "slack off" by accepting fewer patients near end of shift (EOS). Second, physicians distort patient care, incurring higher costs as they spend less time on patients assigned near EOS. Examining how these effects change with shift overlap reveals a tradeoff between the two. Within an hour after the normal time of work completion, physicians are willing to spend hospital resources more than six times their market wage to preserve their leisure. Accounting for overall costs, I find that physicians slack off at approximately second-best optimal levels.
Appendix
Industry Input in Policymaking: Evidence from Medicare
(with Michael Dickstein)
Quarterly Journal of Economics, August 2019
Abstract
In setting prices for physician services, Medicare solicits input from a committee that evaluates proposals from industry. The committee itself comprises members from industry; we investigate whether this arrangement leads to regulatory capture with prices biased toward industry interests. We find that increasing a measure of affiliation between the committee and proposers by one standard deviation increases prices by 10%. We then evaluate whether employing a biased committee as an intermediary may nonetheless be desirable, if greater affiliation allows the committee to extract information needed for regulation. We find industry proposers more affiliated with the committee produce less hard evidence in their proposals. However, on soft information, we find evidence of a trade-off: Private insurers set prices that more closely track Medicare prices generated under higher affiliation.
Appendix
Provider Discretion and Variation in Resource Allocation: The Case of Triage Decisions
(with Jonathan Gruber)
American Economic Review Papers and Proceedings, May 2020
Abstract
One of the most challenging environments in health care is the emergency department. A key decision maker in that context is triage nurses who assess patient illness severity and influence wait times for medical attention. We gather novel data on the triage process across 108 EDs, including wait times, triage nurse identities and assessments, and detailed patient information and outcomes. Using quasi-random assignment to ED, we find a striking rate of "inversions" where patients who are sicker based on either ex ante information or ex post outcomes are scored as sicker and wait longer than their healthier counterparts.
Influence and Information in Team Decisions: Evidence from Medical Residency
American Economic Journal: Economic Policy, February 2021
Abstract
I study team decisions among physician trainees. Exploiting a discontinuity in team roles across trainee tenure, I find evidence that teams alter decision-making, concentrating influence in the hands of senior trainees. I also demonstrate little convergence in variation of trainee effects despite intensive training. This general pattern of trainee effects on team decision-making exists in all types of decisions and settings that I examine. In analyses evaluating mechanisms behind this pattern, I find support for the idea that significant experiential learning occurs during training and that teams place more weight on judgments of senior trainees in order to aggregate information.
Appendix
Fixing Misallocation with Guidelines: Awareness vs. Adherence
(with Jason Abaluck, Leila Agha, Daniel Singer, and Diana Zhu)
Draft: July 2021
Abstract
Expert decisions often deviate from evidence-based guidelines. If experts are unaware of guidelines, dissemination may improve outcomes. If experts are aware of guidelines but continue to deviate, promoting stricter adherence has ambiguous effects on outcomes depending on whether experts have information not in guidelines. We study guidelines for anticoagulant use to prevent strokes among atrial fibrillation patients. By text-mining physician notes, we identify when physicians start using guidelines. After mentioning guidelines, physicians become more guideline-concordant, but adherence remains far from perfect. To evaluate whether nonadherence reflects physicians' superior information, we combine observational data on treatment choices with machine learning estimates of heterogeneous treatment effects from eight randomized trials. Most departures from guidelines are not justified by measurable treatment effect heterogeneity. Promoting stricter adherence to guidelines could prevent 24% more strokes, producing much larger gains than broader guideline awareness.
Selection with Variation in Diagnostic Skill: Evidence from Radiologists
(with Matthew Gentzkow and Chuan Yu)
Quarterly Journal of Economics, May 2022
Abstract
Physicians, judges, teachers, and agents in many other settings differ systematically in the decisions they make when faced with similar cases. Standard approaches to interpreting and exploiting such differences assume they arise solely from variation in preferences. We develop an alternative framework that allows variation in both preferences and diagnostic skill, and show that both dimensions may be partially identified in standard settings under quasi-random assignment. We apply this framework to study pneumonia diagnoses by radiologists. Diagnosis rates vary widely among radiologists, and descriptive evidence suggests that a large component of this variation is due to differences in diagnostic skill. Our estimated model suggests that radiologists view failing to diagnose a patient with pneumonia as more costly than incorrectly diagnosing one without, and that this leads less-skilled radiologists to optimally choose lower diagnostic thresholds. Variation in skill can explain 39 percent of the variation in diagnostic decisions, and policies that improve skill perform better than uniform decision guidelines. Failing to account for skill variation can lead to highly misleading results in research designs that use agent assignments as instruments.
Appendix
Is There a VA Advantage? Evidence from Dually Eligible Veterans
(with David Card and Lowell Taylor)
American Economic Review, November 2023
Abstract
We study public vs. private provision of health care for veterans aged 65 and older who may receive care provided by the US Department of Veterans Affairs (VA) and in private hospitals financed by Medicare. Utilizing the ambulance design of Doyle et al. (2015), we find that the VA reduces 28-day mortality by 46% (4.5 percentage points) and that these survival gains are persistent. The VA also reduces 28-day spending by 21% and delivers strikingly different reported services relative to private hospitals. We find suggestive evidence of complementarities between continuity of care, health IT, and integrated care.
Appendix
The Productivity of Professions: Evidence from the Emergency Department
(with Yiqun Chen)
Draft: June 2023
Abstract
This paper studies the productivity of nurse practitioners (NPs) and physicians, two professions performing overlapping tasks but with stark differences in background, training, and pay. Using quasi-experimental variation in patient assignment to NPs versus physicians in 44 Veterans Health Administration emergency departments, we find that, on average, NPs use more resources but achieve worse patient outcomes relative to physicians. The costs of lower productivity surpass the pay differences between the professions. Yet even larger productivity variation exists within each profession, implying substantial productivity overlap between the two professions. Within professions, wages and assigned patient complexity vary only weakly with productivity.
