Modeling Physicians’ Test-Ordering Behavior in Outpatient Services

Tuesday, February 5, 2013 ( 2:00 pm to 3:00 pm )

Location: Babbio 430

Modeling Physicians’ Test-Ordering Behavior in Outpatient Services

Tinglong Dai, Ph.D. candidate, Carnegie Mellon University



Excessive diagnostic tests have long been viewed as one major aspect of the inefficiency in the healthcare system, and are often attributed to either the fee-for-service payment model or physicians’ malpractice concerns. To uncover the operational and economic drives behind physicians’ test-ordering behavior, we build an analytical framework to capture the interaction between one physician and multiple insured patients in an outpatient setting. While existing studies hold that lower out-of-pocket expenses lead to higher consumption levels, we refine this statement by showing that the copayment and the coinsurance rate drive the consumption of diagnostic tests toward opposite directions. The framework is then applied to analyze physician behavior when incorporating various service environments, including (i) the reimbursement ceilings for insurance coverage, (ii) physicians’ misdiagnosis concerns, (iii) patient heterogeneity in both insurance structure and waiting costs, and (iv) asymmetric information on service value. These and other results continue to hold under more general conditions and so are robust.



Tinglong Dai is currently a graduate student in the PhD program in Management of Manufacturing and Automation, jointly offered by Carnegie Mellon University’s Tepper School of Business and School of Compute Sciences. His research interests include healthcare operations management, marketing-operations interfaces, and supply chain management. He earned his MS degree in Industrial Administration from Tepper School of Business, Carnegie Mellon University, MPhil degree in Industrial Engineering and Engineering Management from the Hong Kong University of Science and Technology, and BEng degree in Automation from Tongji University, Shanghai, China.