One plus one makes less than two? Consolidation policies and mortality in the Italian NHS

This paper studies the population health effects of Italian Local Health Authorities' consolidation. The reform centralized administrative functions and expanded the scale of health service provision, creating entities with larger catchment areas. Using an event-study Difference-in- Differences design, we estimate the policy's impact on municipal mortality rates, accounting for heterogeneous treatment effects. Results reveal a significant increase in mortality rates starting four years after implementation, with an average 1.8% rise in total mortality observed four to nine years post-consolidation. Deaths from preventable conditions among individuals aged 0-74 disproportionately explain this increase. The adverse effects were primarily concentrated in municipalities within absorbed LHAs. Evidence indicates that expected economies of scale failed to improve health outcomes; instead, the reform imposed considerable health costs, particularly in municipalities belonging to larger LHAs and those with more extensive catchment area expansions. Moreover, we document that the effects were unevenly distributed, creating new vulnerable areas.