Cost-Containment Policies in Healthcare Sector: the example of ESTAV in Tuscany

This paper investigates the impact of the establishment of local authorities that act as purchase managers in Tuscany from 2005, replacing the former Local Health Authorities. These new authorities are responsible for the provision of goods and for the management of services; they are aimed at saving money and enhancing a more efficient allocation of resources. In order to assess the impact in terms of cost containment we use the Synthetic Control Procedure to create from the donor pool of all Italian Regions and Local Health Authorities a weighted average that could resemble the exposed units in terms of expenditures before 2005, when ESTAVs were settled. We project the path of expenditures of these “Synthetic” units in the post-intervention period with optimally assigned weights and we measure differences with respect to the real path of the cost variables. We also compute permutations to conduct valid inference: results are appearing for most of the outcome variables, are robust at classical significance levels and are homogeneous across different Local Health Authorities. Purchases of pharmaceuticals account for high share of total expenses and are the ones that deserve more attention in policy discussion.