Organizational Fragmentation and Care Quality in the U.S. Health Care System

Randall D. Cebul, James B. Rebitzer, Lowell J. Taylor, Mark Votruba

NBER Working Paper No. 14212
Issued in August 2008
NBER Program(s):Health Care, Labor Studies

Many goods and services can be readily provided through a series of unconnected transactions, but in health care close coordination over time and within care episodes improves both health outcomes and efficiency. Close coordination is problematic in the US health care system because the financing and delivery of care is distributed across a variety of distinct and often competing entities, each with its own objectives, obligations and capabilities. These fragmented organizational structures lead to disrupted relationships, poor information flows, and misaligned incentives that combine to degrade care quality and increase costs. We illustrate our argument with examples taken from the insurance and the hospital industries, and discuss possible responses to the problems resulting from organizational fragmentation.

download in pdf format
   (107 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w14212

Published: Randall D. Cebul & James B. Rebitzer & Lowell J. Taylor & Mark E. Votruba, 2008. "Organizational Fragmentation and Care Quality in the U.S. Healthcare System," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 93-113, Fall. citation courtesy of

Users who downloaded this paper also downloaded* these:
Rebitzer and Votruba w17535 Organizational Economics and Physician Practices
Garber and Skinner w14257 Is American Health Care Uniquely Inefficient?
Cutler w16030 Where Are The Health Care Entrepreneurs? The Failure of Organizational Innovation in Health Care
Cebul, Rebitzer, Taylor, and Votruba w14455 Unhealthy Insurance Markets: Search Frictions and the Cost and Quality of Health Insurance
Madrian w11980 The U.S. Health Care System and Labor Markets
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us