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

Cinzia Di Novi, Dino Rizzi and Michele Zanette
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Michele Zanette: Department of Economics, University Of Venice CÃ Foscari

No 2016:04, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

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 (search for similar items in EconPapers)
JEL-codes: H59 I18 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2016
New Economics Papers: this item is included in nep-hea
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