Abstract: Health care fragmentation today raises costs and worsens health
outcomes. The theory of the firm indicates that cost and quality
problems could be addressed by permitting greater vertical integration
among complementary health care providers. The puzzle is why such
integration does not occur. The answer is that a host of regulatory and
payment laws create artificial obstacles to such integration. Various
provisions in Obamacare could and should be used to lift these obstacles
and allow health care integration that could potentially save tens of
thousands of lives and hundreds of billions of dollars.