From tests to treatments: How is increased diagnostic testing related to inpatient and outpatient cancer care?

Timely and effective diagnostic testing, such as CT and MRI scans, supports early diagnosis, improves survival, and can reduce costs. However, it remains unclear whether rising diagnostic test volumes lead to changes in consultations, surgeries and other hospital outcomes. This study examines the relationship between diagnostic tests and outpatient consultations, surgeries, waiting times, length of stay and mortality. Using Hospital Episode Statistics (HES), we examine patients with breast cancer, lung cancer, bowel cancer and prostate cancer from January 2018 to December 2024. Monthly diagnostic tests are obtained from NHS England and linked to HES at the provider level. We apply fixed effects panel data models and an instrumental variable (IV) method, using the openings of Community Diagnostic Centres (CDCs) as an instrument for diagnostic tests. We find that higher diagnostic activity is associated with more pre-surgical outpatient consultations among patients who subsequently undergo breast, lung and bowel cancer surgery, and higher surgery volume for bowel cancer. IV elasticities at the mean suggest that diagnostic activity translates into less than proportionate increases in surgery volumes for breast (elasticity = 0.64) and bowel cancer (0.99). Consultation elasticities are larger - 1.01 for breast, 0.91 for lung and 1.26 for bowel, indicating that increases in testing may generate slightly more downstream outpatient activity than inpatient surgery, particularly for bowel cancer. We find no clear effects on waiting times, length of stay or one-year mortality among surgical patients.