The Impact of Organizational Boundaries on Health Care Coordination and Utilization

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 organiza- tional concentration predict improvements in diabetes care and are not associated with greater use of emergency department or inpatient care. (JEL D22, D23, D24, I11, J14, R32)