Job Market Paper

The Role of Discretion in Clinical Decision Making: Evidence from Thresholds

When a decision maker has discretion, such as a worker reporting their taxable income, threshold-based rules or policies can distort behavior. This has not been studied in the context of medicine, where thresholds guide many important diagnosis and treatment decisions. Using bunching estimation & data from over 600,000 primary care visits in Chile I study how providers make diagnostic and treatment decisions for hypertension, defined as blood pressure ≥140/90 mmHg. Importantly, blood pressure is a noisy measure of risk and often over-stated when measured in clinic. I find a large behavioral response to the diagnostic threshold: up to 62% of patients expected just above the threshold who are instead recorded just below it. This suggests providers use their discretion to recategorize some positive tests as negatives. Using future cardiovascular hospitalizations as a measure of risk, I find that the behavioral response leads to a more accurate classification of patients into hypertension positive or negative. But how do providers differentiate between a true and a false positive? My evidence suggests they use the representative heuristic, where patients with characteristics representative of low cardiovascular risk are more likely to be sorted below the diagnostic threshold. These results underscore the importance of clinical skill in achieving an efficient and equitable allocation of health care, and provide some of the first estimates of a behavioral response to a diagnostic threshold.