Health Expenditure in Italy: A Comprehensive Intergovernmental Model

Abstract

The paper provides an analysis of the determinants of health spending differentials among the Italian Regions for the years 1998-2010. An original standardised spending framework is proposed that takes into account the appropriateness of the services provided and price/technical efficiency, as well as the main socioeconomic demand variables. Italian economic duality in terms of differences between historical and standard expenditure needs is reflected in regional health systems. Results suggest that spending reduction by the Regions since 2006 for budgetary needs has mainly been achieved through the quantity of health services supplied rather than by reducing inefficiency.

Keywords: Expenditure Needs, Health Care Expenditure, Intergovernmental Relationships, Composite Indicator

JEL Classification: D610, H510, H550, H750, H770, I110, I130, I180, I310, I380, L180