Decision-Making Under Cognitive Constraints: Evidence from the Emergency Department
(JOB MARKET PAPER)
Complex, high-stakes decisions are often made solely by human experts. However, many of these decisions are made under significant cognitive constraints. I estimate the causal impact of an increase in cognitive constraints on the quality and equity of Emergency Department care using the universe of ED visits across New York from 2005-2015. I define cognitive constraints as a function of variation in the number and complexity of other patients a doctor sees at the same time. Patients arriving when the ED is busy versus empty are of similar ex-ante health, but differ in how cognitively constrained their physician is. My empirical analysis focuses on two common complaints: chest pains, where decision-making aids in the form of simple risk-scoring tools are plentiful, and abdominal pains, where no such aids are available. I show that, when constrained, doctors reallocate care away from low-risk, insured patients and towards high-risk, uninsured patients. These reallocations significantly reduce the disparity between insured and uninsured patients in hospital admission, specialty inpatient services, and 1-year patient mortality. When decision-making aids are available (versus absent), treatment reallocations are highly cost-effective; variation in treatment both within and across hospitals is reduced; and doctors’ algorithms for evaluating uninsured patients converge to the algorithms of insured patients. I rule out changes in ED staffing, triage, and binding physical capacity constraints as alternative mechanisms. Overall, cognitive constraints can cause both the quality and equity of high-stakes decision-making to improve, and their effects hinge critically on the presence of decision-making aids.