The Value of Relationships in Healthcare

I establish the economic relevance of long-term relationships between patients and doctors. Relationships determine where patients demand care and are moderately important for patients’ health. After a primary care physician’s (PCP’s) departure, patients’ preference for relationships leads to a less efficient provision of primary care, increasing both public and private costs. The effect is driven by relationships growing over time and plausibly containing health-specific information. I also find that managing clinics as teams minimizes patients’ reliance on a specific relationship. When a PCP moves 50 miles away, 53% of patients follow, providing a lower bound on patients’ valuation of relationships. *Department of Economics, University of Notre Dame. E-mail: asabety@nd.edu. JEL codes: I11, J24, J26, J63. This work was supported in part by the National Science Foundation Graduate Research Fellowship Program (Grant No. DGE1144152), the Alfred P. Sloan Foundation Pre-Doctoral Fellowship on the Economics of an Aging Workforce award from the NBER, and a Thomas Parry Research Fellowship award from the Integrated Benefits Institute. This project was also supported by grant number U19HS024072 from the Agency for Healthcare Research and Quality. The content is solely the responsibility of the author and does not necessarily represent the official views of the Agency for Healthcare Research and Quality. I am grateful for the extensive support and guidance of my advisers: David Cutler, Claudia Goldin, and Timothy Layton. Marcella Alsan, Michael Barnett, Alex Bartik, Savannah Bergquist, Samantha Burn, David Card, Michael Chernew, Moya Chin, Edward Glaeser, Colin Gray, Jonathan Gruber, Nir Hak, Ryan Hill, Robert Huckman, Anupam Jena, Ariella Kahn-Lang Spitzer, Lawrence Katz, Victoria Marone, Thomas McGuire, Michael McWilliams, Hannah Neprash, Dev Patel, Jonathan Roth, Mark Shepard, Niharika Singh, Gabriel Unger, Scott Walker, Melanie Wasserman, and Annetta Zhou as well as numerous seminar and conference participants provided unrivaled support, advice, and suggestions.