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Scale Effects and Expected Savings from Consolidation Policies of Italian Local Healthcare Authorities

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  • Cinzia Di Novi

    (University of Pavia
    University of York
    Laboratory for Comparative Social Research, National Research University Higher School of Economics)

  • Dino Rizzi

    (Ca’ Foscari University of Venice)

  • Michele Zanette

    (Ca’ Foscari University of Venice)

Abstract

Background Consolidation is often considered by policymakers as a means to reduce service delivery costs and enhance accountability. Objective The aim of this study was to estimate the potential cost savings that may be derived from consolidation of local health authorities (LHAs) with specific reference to the Italian setting. Methods For our empirical analysis, we use data relating to the costs of the LHAs as reported in the 2012 LHAs’ Income Statements published within the New Health Information System (NSIS) by the Ministry of Health. With respect to the previous literature on the consolidation of local health departments (LHDs), which is based on ex-post-assessments on what has been the impact of the consolidation of LHDs on health spending, we use an ex-ante-evaluation design and simulate the potential cost savings that may arise from the consolidation of LHAs. Results Our results show the existence of economies of scale with reference to a particular subset of the production costs of LHAs, i.e. administrative costs together with the purchasing costs of goods (such as drugs and medical devices) as well as non-healthcare-related services. Conclusions The research findings of our paper provide practical insight into the concerns and challenges of LHA consolidations and may have important implications for NHS organisation and for the containment of public healthcare expenditure.

Suggested Citation

  • Cinzia Di Novi & Dino Rizzi & Michele Zanette, 2018. "Scale Effects and Expected Savings from Consolidation Policies of Italian Local Healthcare Authorities," Applied Health Economics and Health Policy, Springer, vol. 16(1), pages 107-122, February.
    • Handle: RePEc:spr:aphecp:v:16:y:2018:i:1:d:10.1007_s40258-017-0359-1
    DOI: 10.1007/s40258-017-0359-1
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    1. Dino Rizzi & Michele Zanette, 2021. "Potential efficiency gains and expenditure savings in the Italian Regional Healthcare Systems," Politica economica, Società editrice il Mulino, issue 2, pages 187-214.

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