Italy: #29 in the 2020 World Index of Healthcare Innovation
Italy’s socialized health care system performs mediocre-to-poorly across the board.
By Gregg Girvan, Mark Dornauer, and Avik Roy
Introduction
Italy’s socialized health care system struggles along multiple dimensions, ranking third-to-last in the World Index of Healthcare Innovation, with a score of 37.29 (#29). While Italy’s fiscal crisis is well known, Italy ranked 19th in Fiscal Sustainability with a score of 37.81, due to moderate growth in health spending.
Italy performed below average across the WIHI’s four dimensions, ranking 30th for Choice (30.42), 25th for Quality (50.57), and 20th for Science & Technology (30.39). Italy’s health care costs are relatively low compared to its European peers, with severely restricted choice of new therapies and competing providers. A high debt-to-GDP ratio of 127.3%, combined with sluggish economic growth, have made slowing health care spending a top priority.
In 2020, Italy was one of the countries hardest hit by the COVID-19 pandemic, with scenes of overwhelmed hospitals broadcast around the world.
Background
Italy’s socialized system was established in 1978 with the creation of the Italian National Health Service (Servizio Sanitario Nazionale, or SSN). The SSN is divided at the national, regional, and local levels, with 19 regions and 2 autonomous provinces. Regions enjoy significant autonomy in the distribution of health care services, with the central government controlling the distribution of tax revenue to the regions to provide care.
Italy’s single-payer system is financed through corporate and value-added taxes, as well as general and regional tax revenue accrued by the government. Total health care expenditures for Italy’s 60.8 million residents are around 9.1 percent of national GDP. Public financing (i.e. taxes) accounted for 75.8 percent of total health spending in 2014, with private health insurance accounting for only an additional 1 percent. Public health insurance covers the “essential levels of care” (livelli essenziali di assistenza, or LEA), akin to the “essential health benefits” seen in other countries. For services outside of the LEAs, private health insurance covers elective services, provides wider provider options, and offers additional amenities in hospitals for approximately 6 million people (just under 10 percent of the population).
Hospitals in Italy are primarily public (80 percent of beds) with a smaller contingent of private hospitals (20 percent of beds). Public hospitals are either managed directly by local health units or are operated as semi-independent public enterprises. In these arrangements, hospital-based physicians are salaried employees and are often discouraged from treating patients with private insurance. For instance, public-hospital physicians are prohibited from treating patients in private hospitals, and if they see private patients in a public hospital, they will pay a portion of their extra income to the hospital. To try to control costs, several directorates oversee specific areas of health care, with several holding key roles in cost containment. The National Committee for Medical Devices develops cost-benefit analysis and outlines reference pricing for medical devices. Similarly, the National Pharmaceutical Agency analyzes and sets prescription drug pricing and drug reimbursement rates. Payment rates for hospital and outpatient specialist care are determined regionally, with national rates serving as a reference.
Quality
The quality of Italian health care ranked 25th in the WIHI analysis. Most notably, patient-centered care is not emphasized in the Italian system to the degree it is in other countries, and its aging infrastructure raises concerns about hospital systems for the future.
Choice
While Italy ranked near the median in affordability (14th), and above the median for access to new medical technologies (10th), it ranked second to last in the ability to choose health care services (30th).
Science & Technology
Italy’s health system performed below average in the subcategory (20th). In particular, its national adoption of EHRs remained low and was 27th overall.
Fiscal Sustainability
The Italian health system’s fiscal sustainability remains in question, and it ranked 28th overall in this category in the WIHI analysis. While its growth of health spending as a share of GDP over the last 10 years plummeted (and ranked 7th overall), its debt-to-GDP remains large, ranking it 28th. As in Greece, the ramifications of the global recession remain widespread on the Italian economy.
