Organizational Fragmentation and Care Quality in the US Health Care System

Innovation and Economic Growth

Article Snapshot


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


Journal of Economic Perspectives, November 2008


The fragmented structure of health care finance and delivery in the US degrades quality and increases costs.

Policy Relevance

Reducing the fragmentation of the health care system through new organizational structures, new management practices and new information technologies is key to improving the efficiency of the system and bending the cost curve.

Main Points

  • Many goods and services can be financed and provided through a series of unconnected transactions.

  • In health care, close coordination improves both health outcomes and the efficiency with which good outcomes are achieved. 

  • The highly fragmented structure of health care finance and delivery in the US system leads to disrupted relationships, poor information flows, and misaligned incentives that degrade the quality and increase the cost of health care.

  • Introducing new organizational structures, management  practices and information technologies that reduce fragmentation is the key to reforming the US health care delivery and finance system.

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