Benjamin Ly Serena

To meet growing healthcare demand, health systems increasingly shift care from specialists to lower-cost providers. The consequences of such despecialization depend on how patients are allocated across providers and on differences in the quality of care they provide. We exploit a change in Danish clinical guidelines that reversed despecialization by shifting antidepressant initiation for patients under 25 from general practitioners to psychiatrists. The reform allows us to compare otherwise similar patients treated by different providers. Marginal patients all receive antidepressants from GPs but receive strikingly different treatments from specialists: 31 percent receive specialized medications used in severe or complex cases, while 42 percent receive no psychotropic medication, suggesting substantial misallocation at the margin. Specialist treatment improves mental health and labor-market outcomes, and fiscal benefits exceed additional healthcare costs. At current levels of diagnostic skill, care is therefore too despecialized. These findings highlight patient allocation and diagnostic skill as central to whether despecialization policies provide a viable means of meeting rising healthcare demand.