Diagnosis and Unnecessary Procedure Use: Evidence from C-Section

This paper develops and applies a model in which doctors have two dimensions of skill: diagnostic skill and skill performing procedures. Higher procedural skill increases the use of intensive procedures across the board, while better diagnostic skill results in fewer intensive procedures for the low risk, but more for the high risk. Deriving empirical analogues to our theoretical measures for the case of C- section, we show that improving diagnostic skill would reduce C-section rates by 15.8% among the lowest risk, and increase them by 4.7% among the high risk while improving outcomes among all women.