Does private supply drive personal health choices? A spatial approach of health tax detractions at municipal level

The provision of health services plays a central role in the promotion of public welfare and maintaining a healthy society. However, inequalities in access to health care persist between countries, regions, and communities, reflecting the complex interplay of many social, economic, and cultural factors. This article aims to explore the complex relationship between tax deductions and the spatial correlation between health demand and private supply. By using an original data set at an unprecedented municipal level and employing a spatial counterfactual empirical strategy, we contribute to the existing literature in two ways. First, we show a strong territorial heterogeneity of health tax expenditure at the municipal level, which persists even after controlling for explanatory factors, and essentially rewards northern Italian regions and penalizes southern ones. Second, we investigate whether greater proximity to a private health provider respects a public one produces a different spending behavior in citizens, highlighting once again the specificity of private healthcare provision in the Italian context. This behavior was analyzed with a geographically weighted analysis, which allowed us to assess the strong spatial non-stationarity by including local potential hidden confounders.