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The Impact of Organizational Boundaries on Health Care Coordination and Utilization

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  • Leila Agha
  • Keith Marzilli Ericson
  • Xiaoxi Zhao

Abstract

We measure organizational concentration—the distribution of a patient's health care across organizations—to examine how firm boundaries affect health care efficiency. First, when patients move to regions where outpatient visits are typically concentrated within a small set of firms, their health care utilization falls. Second, for patients whose primary care providers (PCPs) exit the market, switching to a PCP with 1 standard deviation higher organizational concentration reduces utilization by 21 percent. This finding is robust to controlling for the spread of health care across providers. Increases in organizational concentration predict improvements in diabetes care and are not associated with greater use of emergency department or inpatient care.

Suggested Citation

  • Leila Agha & Keith Marzilli Ericson & Xiaoxi Zhao, 2023. "The Impact of Organizational Boundaries on Health Care Coordination and Utilization," American Economic Journal: Economic Policy, American Economic Association, vol. 15(3), pages 184-214, August.
    • Handle: RePEc:aea:aejpol:v:15:y:2023:i:3:p:184-214
    DOI: 10.1257/pol.20200841
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    Cited by:

    1. Ericson, Keith Marzilli & Sacarny, Adam & Zhou, Annetta, 2023. "Dangerous prescribing and healthcare fragmentation: Evidence from opioids," Journal of Public Economics, Elsevier, vol. 225(C).

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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