Fragmented Division of Labor and Healthcare Costs: Evidence from Moves Across Regions
Policies aiming to improve healthcare productivity often focus on reducing care fragmentation. Care fragmentation occurs when services are spread across many providers, potentially making coordination difficult. Using Medicare claims data, we analyze the effect of moving to a region with more fragmented care delivery. We find that 60% of regional variation in care fragmentation is independent of patients' individual demand for care and moving to a region with 1 SD higher fragmentation increases care utilization by 10%. When patients move to more fragmented regions, they increase their use of specialists and have fewer encounters with primary care physicians. More fragmented regions have more intensive care provision on many margins, including services sometimes associated with overutilization (hospitalizations, emergency department visits, repeat imaging studies) as well as services associated with high value care (vaccines, guideline concordant for diabetics).
Previously circulated as "Causes and Consequences of Fragmented Care Delivery: Theory, Evidence, and Public Policy." We thank Amitabh Chandra, Keith Ericson, and seminar participants at the University of Massachusetts at Amherst, Northwestern Kellogg, NBER, the Sloan School of Management, and The Dartmouth Institute for helpful comments and suggestions. We are also grateful to Jean Roth and Mohan Ramanujan for assistance obtaining and managing the data. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Leila Agha & Brigham Frandsen & James B. Rebitzer, 2019. "Fragmented division of labor and healthcare costs: Evidence from moves across regions," Journal of Public Economics, vol 169, pages 144-159. citation courtesy of