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Health care and fiscal federalism: Paradoxes of recent reform in Italy

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  • Enza Caruso
  • Nerina Dirindin

Abstract

Legislative decree n. 68/2011, implementing law n. 42/2009 on fiscal federalism,defines standard costs and standard financial needs in the Italian health sector and introduces significant innovations with respect to the previous resources allocation system of Essential Levels of Assistance (LEA) among regions, in force from the nineties. By downgrading the weighted capitation formula the resources allocation will now depend only on two criteria: the age groups of the population and the identification of some benchmark regions. The first criteria aims to relieve the Italian North-South conflict regarding the weights used in the capitation formula; the second has no influence on resources allocation given that the overall fund is determined exogenously. However, the new rules contain important ambiguities: if the estimated financial needs were lower than the overall financing fund, the new resources allocation process could produce benefits in favor of some regions with more contained weighted per capita expenditure. The paper sustains that the new system of resources distribution is based on an approximate methodology, without the capacity to appropriately address financial needs and inefficiencies. As a result, it appears to be riskier, the more standard costs and standard financial needs become the reference point used to calculate the full financing of health care expenditure.

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  • Enza Caruso & Nerina Dirindin, 2012. "Health care and fiscal federalism: Paradoxes of recent reform in Italy," Politica economica, Società editrice il Mulino, issue 2, pages 169-196.
    • Handle: RePEc:mul:je8794:doi:10.1429/38640:y:2012:i:2:p:169-196
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    1. Fabio Pammolli & Nicola Carmine Salerno, 2010. "I numeri del Federalismo in Sanità - Benchmarking e Standard su profili di spesa sanitaria per età," Working Papers CERM 03-2010, Competitività, Regole, Mercati (CERM).
    2. Van de ven, Wynand P.M.M. & Ellis, Randall P., 2000. "Risk adjustment in competitive health plan markets," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 14, pages 755-845, Elsevier.
    3. Wagstaff, Adam & van Doorslaer, Eddy, 2000. "Chapter 34 Equity in health care finance and delivery," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 34, pages 1803-1862, Elsevier.
    4. Nigel Rice & Peter Smith, 1999. "Approaches to capitation and risk adjustment in health care: an international survey," Working Papers 038cheop, Centre for Health Economics, University of York.
    5. Matthew Sutton & Peter Lock, 2000. "Regional differences in health care delivery: implications for a national resource allocation formula," Health Economics, John Wiley & Sons, Ltd., vol. 9(6), pages 547-559, September.
    6. Asthana, Sheena & Gibson, Alex, 2011. "Setting health care capitations through diagnosis-based risk adjustment: A suitable model for the English NHS?," Health Policy, Elsevier, vol. 101(2), pages 133-139, July.
    7. Nigel Rice & Peter Smith, 2000. "Editorial: Capitation and risk adjustment in health care," Health Care Management Science, Springer, vol. 3(2), pages 73-75, February.
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    Cited by:

    1. Alessandro Petretto, 2014. "A note on standard costs criteria for allocating the Italian national health fund to Regions," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2014(2), pages 5-21.

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