Italian Regional Health Care Systems

Please, find enclosed the first version of SANIRef., the econometric benchmarking of Italian regional Health Care Systems.

This work presents a benchmarking between regional Health Care Systems in Italy.

The analysis adopts a demand side point of view, in the sense that it tries to explain dynamics of real per-capita public health expenditure on the basis of the pure composition of population by age.

Following the series of benchmarking based on per-capita expenditure profiles by age and sex, this time a different approach is implemented: instead of taking per-capita profiles by age already estimated by other authors on data at hospitals level, a panel econometric model is set up linking regional real per-capita health expenditures to the incidence of relevant age brackets on regional populations over the period 2002-2016.

Regressions use also three sets of control variables: 1) yearly dummies to take into account annual events influencing all Regions at the same time, 2) Region-specific dummies to consider structural differences between Regions affecting their capabilities to provide health care in efficient way, and 3) further time dummies (on top of the yearly ones) exerting a specific effect in the years of the peak of the economic crisis (the so called ‘double dip’, 2008-2009 and 2012-2014).

In the total aggregate, the amount of resources that could be, year by year, better spent is slightly below 4,5 billion Euro, large part of which arising from Lazio and Campania: more than 54 per cent, becoming more than 64 per cent if we include overspending by Trentino Alto Adige. With respect to the national health expenditure in 2016 (expressed in 2002 Euro) this means a cost inefficiency of approximately 5 per cent. This incidence could have also been smaller (under 5 p.p.) if we had made the choice of setting directly to zero those ‘FEs’ not statistically different from zero in the results of the initial panel estimation.

It is possible to conclude that, despite the troubles of the crisis, Italian regional Health Care Systems proved capable of functioning on fair efficient regimes, taken into account the different composition of population by age brackets. Aggregate inefficiencies are limited to 5,0 per cent of total national expenditure, a weakness that can be surely improved but does not raise any immediate big alert per se. Nonetheless, this rather positive judgement should not hide the fact that current inefficiencies are concentrated in very few Regions (Lazio and Campania in particular), and that they have to be fixed as soon as possible, also in the light of future challenges that aging and costs of technological discoveries will constitute for the longrun sustainability of health care systems (not only for the Italian of course).

From the point of view of the absorption of resources, here we traced a quick but clear picture of the state-of-arts. But this is only half of the story. Of course, also resources theoretically proprorionate to the final goal can be spent with different capabilities, and final services for citizens can be offered with different levels of quality and effectiveness, crucially depending also on the quality of the devices and infrastructure endowments. This latter is, indeed, the dimensions along which regional gaps are most relevant and urging policy solutions: the quality and the effectiveness of Euros spent for health care purposes.

April 2018

P.S. For the sake of transparency, all files (.do, .dat, .xlsx) are uploaded for the availability of interested readers