Is Fragmented Financing Bad for Your Health?

Americans finance health care through a variety of private insurance plans and public programs. This organizational ji'agmentation could threaten continuity of care and adversely aJfect outcomes. Using a large sample of veterans who were eligible./or mixtures of Veterans Health Administration- and Medicare-financed care, we esthnate a O'stem of equations to account j'or shnultaneiO" in the determination of financing configuration and the probability of hospitalization for an ambulatol3' care sensitive condition. We find that a change of one standard deviation in financing fragmentation increases the risk of an adverse outcome b)' one-fifth. **********