The Italian System
Today we look at Italy and once again, the information is from the same source. The Grass Is Not Always Greener: A Look at National Health Care Systems Around the World Michael D. Tanner Cato Institute: Policy Analysis
Italy
Italy’s national health care system is rated second in the world by the WHO.(89) Yet a closer examination shows the system to be deeply troubled, plagued with crippling bureaucracy, mismanagement and general disorganization, spiraling costs, and long waiting lists.
Generally, the Italian system is similar to the British National Health Service but enjoys more decentralization. The central government sets goals on how money should be spent, monitors the overall health status of the nation, and negotiates the labor contracts of medical staff. The Italian Constitution was changed in 2001 such that the national government now sets the “essential levels of care” regions must meet, but regional governments still control their own autonomous budgets and distribute resources to the local level.
In theory, under the “fiscal federalist” provisions of this reform, discretionary central transfers should have dropped sharply, local tax bases and tax sharing should have increased, and “equalizing” transfers should have been standardized and linked to objectives for controlling costs and increasing quality. However, poorer regions and powerful special interests have strongly resisted these changes. Reform therefore remains incomplete, and financial transfers from the central government are still based on historical spending patterns. (90)
Thus, while the national Ministry of Health continues to outline funding needs based on weighted capitation and past spending, recent reforms have shifted more and more power and responsibility to regional governments who set their own budgets. The regions establish one or more Local Health Authorities, which are responsible for the provision of care either through government-run hospitals and clinics or by contracting with private providers. (91) It should be noted that governance in Italy is often as much art as science, and regions frequently fail to implement rules, guidelines, reimbursement schedules, and budgets set by the central government.(92)
Financing comes from both payroll taxes and general revenues. Payroll taxes have a regressive structure, starting at 10.6 percent of the first €€ 20,660 of gross income and decreasing to 4.6 percent of income between €€20,661 and €€ 77,480. The remainder of funding comes from both federal and regional general taxation, including income and value-added taxes. (93) The central government redistributes resources to compensate to some degree for inequalities among regions. Even so, most regional health authorities run significant deficits. Overall, regional deficits top 1.8 percent of GDP. (94)
Inpatient care and primary care are free at the point of treatment. However, co-payments are required for diagnostic procedures, specialists, and prescription drugs.(95) The size of such co-payments has crept steadily upward over the past decade and now runs as high as 30 percent for some services.(96) Several attempts have been made to impose co-payments for a broad range of services, including primary care, but have collapsed in the face of public protests.(97) In addition, nearly 40 percent of the population (the elderly, pregnant women, and children) are exempt from co-payments.(98)
Italians have limited choice of physician. They must register with a general practitioner within their LHA. They may choose any GP in the LHA but may not go outside it. Except for emergency care, a referral from a GP is required for diagnostic services, hospitalization, and treatment by a specialist. Despite these limits, Italians enjoy more choice of physician than do the British or Spanish.
Most physicians are reimbursed on a capitated basis (i.e., according to the number of patients served over a given time period rather than the services actually provided), although some hospital physicians receive a monthly salary. Hospitals are generally reimbursed according to DRGs, with rates set by the central government—though regions sometimes disregard those rates and set their own.
Private health insurance is available in Italy but is not widespread. Where offered, it is usually provided by employers. About 10 percent of Italians have private health insurance, below the percentage in most OECD countries. According to the insurance industry, this is partly because it is not possible to opt out of the National Health System and because health insurance premiums are not tax deductible.(99) Private health insurance allows free choice of doctors, including specialists, and treatment in private hospitals. Even without private insurance, however, many Italians use private health resources (and presumably pay out of pocket). Estimates suggest that as much as 35 percent of the population uses at least some private health services. (100)
Although Italy spends a relatively low percentage of GDP on health care, expenditures have been rising rapidly in recent years and have consistently exceeded government forecasts. (101) Between 1995 and 2003, total health care spending rose by 68 percent.(102) The Italian government has taken various steps to try to control costs, such as reducing reimbursement rates, increasing co-payments, reducing capital expenditures, contracting with private providers, and limiting prescription drugs. All of these measures have met with protests, including physician strikes, and many have been repealed after only a short time. (103)
The Italian government does not provide official information on waiting lists, but numerous studies have shown them to be widespread and growing, particularly for diagnostic tests. For example, the average wait for a mammogram is 70 days; for endoscopy, 74 days; for a sonogram, 23 days. (104) Undoubtedly, this is due in part to a shortage of modern medical technology. The United States has twice as many MRI units per million people and 25 percent more CT scanners. (105) Ironically, the best-equipped hospitals in northern Italy have even longer waiting lists since they draw patients from the poorer southern regions as well.(106)
If delays become excessive, patients may seek permission from the regional government to obtain treatment from private doctors or hospitals at NHS expense. A recent court decision allows patients whose life would be endangered by delays under the NHS to seek treatment in private hospitals even without prior permission from the regional government.
Italy has imposed a relatively strict drug formulary as well as price controls, and has thereby succeeded in reducing pharmaceutical spending, long considered a problem for the Italian health care system. In 2006, Italian drug prices fell (or were pushed) 5 percent, even as drug prices rose in the United States and much of the rest of the world. However, the savings came at a cost: the introduction of many of the newest and most innovative drugs was blocked. (107)
Conditions in public hospitals are considered substandard, particularly in the south. They lack not just modern technology, but basic goods and services; and overcrowding is widespread. Conditions are frequently unsanitary. For example, one of the largest public hospitals in Rome was recently found to have garbage piled in the hallways, unguarded radioactive materials, abandoned medical records, and staff smoking next to patients. (108) Private hospitals are considered much better and some regions have contracted with private hospitals to treat NHS patients.
Dissatisfaction with the Italian health care system is extremely high, by some measures the highest in Europe. (109) In polls, Italians say that their health care system is much worse than that of other countries and give it poor marks for meeting their needs. Roughly 60 percent of Italians believe that health care reform is “urgent,” and another 24 percent believe it is “desirable.” In general, Italians believe that such reform should incorporate market-based solutions. More than two-thirds (69 percent) believe that giving patients more control over health care spending will improve the system’s quality. And 55 percent believe that it should be easier for patients to spend their own money on health care. (110)
However, given the general dysfunction of the Italian political system, and the entrenched opposition of special interest groups, substantial reform is not likely anytime soon.
Italy
Italy’s national health care system is rated second in the world by the WHO.(89) Yet a closer examination shows the system to be deeply troubled, plagued with crippling bureaucracy, mismanagement and general disorganization, spiraling costs, and long waiting lists.
Generally, the Italian system is similar to the British National Health Service but enjoys more decentralization. The central government sets goals on how money should be spent, monitors the overall health status of the nation, and negotiates the labor contracts of medical staff. The Italian Constitution was changed in 2001 such that the national government now sets the “essential levels of care” regions must meet, but regional governments still control their own autonomous budgets and distribute resources to the local level.
In theory, under the “fiscal federalist” provisions of this reform, discretionary central transfers should have dropped sharply, local tax bases and tax sharing should have increased, and “equalizing” transfers should have been standardized and linked to objectives for controlling costs and increasing quality. However, poorer regions and powerful special interests have strongly resisted these changes. Reform therefore remains incomplete, and financial transfers from the central government are still based on historical spending patterns. (90)
Thus, while the national Ministry of Health continues to outline funding needs based on weighted capitation and past spending, recent reforms have shifted more and more power and responsibility to regional governments who set their own budgets. The regions establish one or more Local Health Authorities, which are responsible for the provision of care either through government-run hospitals and clinics or by contracting with private providers. (91) It should be noted that governance in Italy is often as much art as science, and regions frequently fail to implement rules, guidelines, reimbursement schedules, and budgets set by the central government.(92)
Financing comes from both payroll taxes and general revenues. Payroll taxes have a regressive structure, starting at 10.6 percent of the first €€ 20,660 of gross income and decreasing to 4.6 percent of income between €€20,661 and €€ 77,480. The remainder of funding comes from both federal and regional general taxation, including income and value-added taxes. (93) The central government redistributes resources to compensate to some degree for inequalities among regions. Even so, most regional health authorities run significant deficits. Overall, regional deficits top 1.8 percent of GDP. (94)
Inpatient care and primary care are free at the point of treatment. However, co-payments are required for diagnostic procedures, specialists, and prescription drugs.(95) The size of such co-payments has crept steadily upward over the past decade and now runs as high as 30 percent for some services.(96) Several attempts have been made to impose co-payments for a broad range of services, including primary care, but have collapsed in the face of public protests.(97) In addition, nearly 40 percent of the population (the elderly, pregnant women, and children) are exempt from co-payments.(98)
Italians have limited choice of physician. They must register with a general practitioner within their LHA. They may choose any GP in the LHA but may not go outside it. Except for emergency care, a referral from a GP is required for diagnostic services, hospitalization, and treatment by a specialist. Despite these limits, Italians enjoy more choice of physician than do the British or Spanish.
Most physicians are reimbursed on a capitated basis (i.e., according to the number of patients served over a given time period rather than the services actually provided), although some hospital physicians receive a monthly salary. Hospitals are generally reimbursed according to DRGs, with rates set by the central government—though regions sometimes disregard those rates and set their own.
Private health insurance is available in Italy but is not widespread. Where offered, it is usually provided by employers. About 10 percent of Italians have private health insurance, below the percentage in most OECD countries. According to the insurance industry, this is partly because it is not possible to opt out of the National Health System and because health insurance premiums are not tax deductible.(99) Private health insurance allows free choice of doctors, including specialists, and treatment in private hospitals. Even without private insurance, however, many Italians use private health resources (and presumably pay out of pocket). Estimates suggest that as much as 35 percent of the population uses at least some private health services. (100)
Although Italy spends a relatively low percentage of GDP on health care, expenditures have been rising rapidly in recent years and have consistently exceeded government forecasts. (101) Between 1995 and 2003, total health care spending rose by 68 percent.(102) The Italian government has taken various steps to try to control costs, such as reducing reimbursement rates, increasing co-payments, reducing capital expenditures, contracting with private providers, and limiting prescription drugs. All of these measures have met with protests, including physician strikes, and many have been repealed after only a short time. (103)
The Italian government does not provide official information on waiting lists, but numerous studies have shown them to be widespread and growing, particularly for diagnostic tests. For example, the average wait for a mammogram is 70 days; for endoscopy, 74 days; for a sonogram, 23 days. (104) Undoubtedly, this is due in part to a shortage of modern medical technology. The United States has twice as many MRI units per million people and 25 percent more CT scanners. (105) Ironically, the best-equipped hospitals in northern Italy have even longer waiting lists since they draw patients from the poorer southern regions as well.(106)
If delays become excessive, patients may seek permission from the regional government to obtain treatment from private doctors or hospitals at NHS expense. A recent court decision allows patients whose life would be endangered by delays under the NHS to seek treatment in private hospitals even without prior permission from the regional government.
Italy has imposed a relatively strict drug formulary as well as price controls, and has thereby succeeded in reducing pharmaceutical spending, long considered a problem for the Italian health care system. In 2006, Italian drug prices fell (or were pushed) 5 percent, even as drug prices rose in the United States and much of the rest of the world. However, the savings came at a cost: the introduction of many of the newest and most innovative drugs was blocked. (107)
Conditions in public hospitals are considered substandard, particularly in the south. They lack not just modern technology, but basic goods and services; and overcrowding is widespread. Conditions are frequently unsanitary. For example, one of the largest public hospitals in Rome was recently found to have garbage piled in the hallways, unguarded radioactive materials, abandoned medical records, and staff smoking next to patients. (108) Private hospitals are considered much better and some regions have contracted with private hospitals to treat NHS patients.
Dissatisfaction with the Italian health care system is extremely high, by some measures the highest in Europe. (109) In polls, Italians say that their health care system is much worse than that of other countries and give it poor marks for meeting their needs. Roughly 60 percent of Italians believe that health care reform is “urgent,” and another 24 percent believe it is “desirable.” In general, Italians believe that such reform should incorporate market-based solutions. More than two-thirds (69 percent) believe that giving patients more control over health care spending will improve the system’s quality. And 55 percent believe that it should be easier for patients to spend their own money on health care. (110)
However, given the general dysfunction of the Italian political system, and the entrenched opposition of special interest groups, substantial reform is not likely anytime soon.
Labels: healthcare reform, Italy
posted by Anonymous at 6:02 AM
6 Comments:
Why do I keep getting this cold chill running down the back of my neck when I read these socialized medicine descriptions? I am definitely not getting a good feeling running up my leg like the one described by MSNBC's Chris Matthews when describing his feelings for the anointed one - Dictator BHO.
You conservatives amuse me.
You get a tag line shoved in your head by Limbaugh & Hannity ("socialism" in this case) and then you cant ever shake it. You really should try to get past the labels in life, and look at the merits of things, for a change.
And before you try to deny being a Limbaugh disciple, Slim, your use of "the annoited one" gives you away.
As to the topic de jour, HB, I think the comparison in the past few days has been interesting.
Hey Lawguy,
The term "anointed one" comes from Sean Hannity. I admit to being a conservative and a listener to the popular talk radio hosts - several of them.
I refrain from listening to anyone from the "drive by" media - that's a Limbaugh term. The "drive by" media cannot be trusted. They are in the tank for Dictator BHO.
Lawguy, glad to amuse you. I did not know liberals had an ability to laugh.
I'm listening to Rush as I type this.
B.O.'s style I think is closest to fascism. He has not yet advocated full blown socialism/Marxism take over of all industry and means of production. That may yet happen.
I'm curious. Where in the constitution is the legal authority to do what the Democrat party leaders are advocating, many Republicans also for that matter?
I think our country would be better off if people listened to music on their radios.
Interesting replies. But facism....really?
My only thought (while smiling) was a recollection of a great line from Ferris Bueller's Day Off (a great movie)...
“Not that I condone fascism, or any ‘ism’ for that matter. Ism’s in my opinion are not good. A person should not believe in an ism, he should believe in himself.
Just my two cents.
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