Should physicians team up to treat chronic diseases?

This paper studies referral strategy and effort provision of a primary care physician and a specialist who are responsible for the treatment of chronically ill patients who can be in a mild or severe condition. Two organizational settings are compared, a team in which physicians cooperate and solo practices in which they do not. Team care is strictly superior to solo practice care if the difference in expected treatment costs between disease severities is relatively larger for the primary care physician. Otherwise, solo practice care is weakly superior to team care under reasonable assumptions.