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Understanding Inappropriateness in Health Care. The Role of Supply Structure, Pricing Policies and Political Institutions in Caesarean Deliveries

  • Maura Francese

    ()

    (Structural Economic Analysis Department – Economics, Research and International Relations Area, Bank of Italy, Italy)

  • Massimiliano Piacenza

    ()

    (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)

  • Marzia Romanelli

    ()

    (Structural Economic Analysis Department – Economics, Research and International Relations Area, Bank of Italy, Italy)

  • Gilberto Turati

    ()

    (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)

The upward trend in the incidence of caesarean deliveries is a widespread stylised fact in many countries. Several studies have argued that it does not reflect, at least in part, patients’ needs but that it is also influenced by other factors, such as providers/physicians incentives. Not surprisingly, the incidence of caesarean sections is often used as an indicator of the degree of (in)appropriateness in health care, which has also been found to be strongly correlated with excessive expenditure levels. In this paper, we exploit the significant regional variation in the share of caesarean sections recorded in Italy to explore the impact on inappropriateness of three groups of variables: 1) structural supply indicators (e.g., the incidence of private providers); 2) pricing policies (role of DRG tariffs); 3) political economy indicators (to capture different approaches to the governance of the health care sector). The analysis controls for demand side factors, such as the demographic structure of the population and education levels. The results suggest that DRG tariffs might be an effective policy tool to control inappropriateness, once the composition of the regional health care system – in terms of private vs. public providers – is taken into account. Also some characteristics of regional governments and the funding sources of regional health spending do matter.

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File URL: http://eco83.econ.unito.it/RePEc/wp/m1.pdf
File Function: First version, 2012
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Paper provided by Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino in its series Working papers with number 001.

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Length: 25 pages
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:tur:wpapnw:001
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  1. Massimiliano Piacenza & Gilberto Turati, 2014. "Does Fiscal Discipline Towards Subnational Governments Affect Citizens' Well‐Being? Evidence On Health," Health Economics, John Wiley & Sons, Ltd., vol. 23(2), pages 199-224, 02.
  2. Gruber, Jon & Kim, John & Mayzlin, Dina, 1999. "Physician fees and procedure intensity: the case of cesarean delivery," Journal of Health Economics, Elsevier, vol. 18(4), pages 473-490, August.
  3. SALMON, Pierre, 1987. "Decentralization as an incentive scheme," Institut des Mathématiques Economiques – Document de travail de l’I.M.E. (1974-1993) 98, Institut des Mathématiques Economiques. LATEC, Laboratoire d'Analyse et des Techniques EConomiques, CNRS, Université de Bourgogne.
  4. Arulampalam, Wiji & Dasgupta, Sugato & Dhillon, Amrita & Dutta, Bhaskar, 2009. "Electoral goals and center-state transfers: A theoretical model and empirical evidence from India," Journal of Development Economics, Elsevier, vol. 88(1), pages 103-119, January.
  5. Darren Grant, 2008. "Physician Financial Incentives and Cesarean Delivery: New Conclusions from the Healthcare Cost and Utilization Project," Working Papers 0801, Sam Houston State University, Department of Economics and International Business.
  6. McGuire, Thomas G. & Pauly, Mark V., 1991. "Physician response to fee changes with multiple payers," Journal of Health Economics, Elsevier, vol. 10(4), pages 385-410.
  7. D. Fabbri & C. Monfardini, 2006. "Style of practice and assortative mating: a recursive probit analysis of cesarean section scheduling in Italy," Working Papers 557, Dipartimento Scienze Economiche, Universita' di Bologna.
  8. Maura Francese & Marzia Romanelli, 2011. "Healthcare in Italy: expenditure determinants and regional differentials," Temi di discussione (Economic working papers) 828, Bank of Italy, Economic Research and International Relations Area.
  9. Borge, Lars-Erik & Rattsø, Jørn, 2008. "Property taxation as incentive for cost control: Empirical evidence for utility services in Norway," European Economic Review, Elsevier, vol. 52(6), pages 1035-1054, August.
  10. Baltagi, Badi H. & Wu, Ping X., 1999. "Unequally Spaced Panel Data Regressions With Ar(1) Disturbances," Econometric Theory, Cambridge University Press, vol. 15(06), pages 814-823, December.
  11. Ernesto Dal Bó & Martín Rossi, 2008. "Term Length and Political Performance," NBER Working Papers 14511, National Bureau of Economic Research, Inc.
  12. Dubay, Lisa & Kaestner, Robert & Waidmann, Timothy, 1999. "The impact of malpractice fears on cesarean section rates," Journal of Health Economics, Elsevier, vol. 18(4), pages 491-522, August.
  13. Jon H. Fiva, 2006. "New Evidence on the Effect of Fiscal Decentralization on the Size and Composition of Government Spending," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 62(2), pages 250-280, June.
  14. J. Paul Elhorst & Sandy Fréret, 2009. "Evidence Of Political Yardstick Competition In France Using A Two-Regime Spatial Durbin Model With Fixed Effects," Journal of Regional Science, Wiley Blackwell, vol. 49(5), pages 931-951.
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