Objective To examine the effects of physician division of labor and patient continuity of care (COC) on the care quality and outcomes of older adults with complex chronic conditions. Data Sources/Study Setting Seven years (2006–2012) of panel data from the Medicare Current Beneficiary Survey (MCBS). Study Design Regression models were used to estimate the effect of the specialty‐type of physicians involved in annual patient evaluation and management, as well as patient COC, on simultaneous care processes and following year outcomes. Data Collection/Extraction Methods Multiyear cohorts of Medicare beneficiaries with diabetes and/or heart failure were retrospectively identified to create a panel of 15,389 person‐year observations. Principal Findings Involvement of both primary care physicians and disease‐relevant specialists is associated with better compliance with process‐of‐care guidelines, but patients seeing disease‐relevant specialists also receive more repeat cardiac imaging (p < .05). Patient COC is associated with less repeat cardiac imaging and compliance with some recommended care processes (p < .05), but the effects are small. Receiving care from a disease‐relevant specialist is associated with lower rates of following year functional impairment, institutionalization in long‐term care, and ambulatory care sensitive hospitalization (p < .05). Conclusions Annual involvement of disease‐relevant specialists in the care of beneficiaries with complex chronic conditions leads to more resource use but has a beneficial effect on outcomes.