The Economics of Screening

Franz Hackl, Martin Halla, Michael Hummer, Gerald Pruckner
University of Linz, Austria

Regular health screening is expected to improve health of participants and decrease long-term health expenditure due to early disease detection. We estimate the causal effects of participation in voluntary general health-checks on extramural health expenditure and other health-related outcomes. Based on an Instrument Variable (IV) approach with the regional pattern of general practitioners’ inducement of health screening participation as exclusion restriction we analyze individual-level panel data on health service utilization for 456,260 people living in the Austrian province of Upper Austria over the period of 1998-2007. Screening participation increases next year’s extramural expenditure and days of hospitalization. This can be explained by subsequent referrals of suspicious cases on to specialists (internists) for further examinations and treatments. We do, however, not detect any causal effects on the days of sick leave, number of prescribed medical drugs, and days spent on cure. In the short-run screening participation increases service utilization, while it seems to have no causal effects on health-related outcomes in the short-run. In addition, we observe voluntary health check participation of 184,474 individuals of the Austrian province of Vorarlberg over the period 1985-2007 that allows the analysis of long-term effects of screening on mortality. First results suggest that participation in health screening lowers mortality. At the first stage we find evidence that the selection into health screening participation is driven by doctors’ inducement of participation. At the second stage screening is likely to raise health service utilization in the short-run and to provide positive health effects over a longer period.

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