No. 29 - Technical efficiency of Italian public hospitals

Since the late eighties the Italian National Health System, in particular hospital care, has undergone deep reforms. This paper evaluates the technical efficiency of Italian public hospitals in light of the main features of the hospital system at a regional level. The evaluation was carried out using data on endowments and admissions of all Italian public hospitals over the period 2000-2004 and applying DEA, a non-parametric method. Individual efficiency is partly explained by the composition of input endowment and the case-mix of hospital services provided. However a significant portion of variance is related to differences in regional averages. A second stage of analysis was performed to detect determinants of technical efficiency, including supply side structural features at the regional level. It demonstrates that some features of local markets, such as the existence of hospital networks and competitiveness between providers, lead to higher levels of efficiency. Another source of variance between regions consists in pressures on the demand for in-patient care.