Larger is Better: The Scale Effects of the Italian Local Healthcare Authorities Amalgamation Program

24 Pages Posted: 4 Mar 2016

See all articles by Cinzia Di Novi

Cinzia Di Novi

Ca Foscari University of Venice

Dino Rizzi

Ca Foscari University of Venice - Dipartimento di Economia

Michele Zanette

Ca' Foscari University of Venice, Department of Economics

Date Written: February 10, 2016

Abstract

Consolidation is often considered as a means to lower service delivery costs and enhance accountability. This paper uses a prospective evaluation design to derive estimates of the potential cost savings that may arise from Local Healthcare Authorities (LHAs) amalgamation process, which is concerning the Italian National Health System. We focus specifically on cost savings due to scale economies with reference to a particular subset of the production costs of the LHAs, i.e. the administrative costs together with the purchasing costs of both goods as well as non-healthcare related services. Our results demonstrate the existence of economies of scale linked to the size of the LHA population. Hence, the decision to reduce the number of LHAs may result in larger local health authorities that are more cost efficient, especially when the consolidation process concerns merging a large number of LHA.

Keywords: Italian Health Care System, Local Health Authority, Consolidation

JEL Classification: H59, I18

Suggested Citation

Di Novi, Cinzia and Rizzi, Dino and Zanette, Michele, Larger is Better: The Scale Effects of the Italian Local Healthcare Authorities Amalgamation Program (February 10, 2016). University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. No. 04/WP/ 2016. Available at SSRN: https://ssrn.com/abstract=2742052 or http://dx.doi.org/10.2139/ssrn.2742052

Cinzia Di Novi (Contact Author)

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venezia, 30123
Italy

Dino Rizzi

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy

HOME PAGE: http://www.unive.it/persone/rizzid

Michele Zanette

Ca' Foscari University of Venice, Department of Economics ( email )

Cannaregio 873
Venice, 30121
Italy

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