Does the Extent of Per-Case Payment System Affect Hospital Efficiency? Evidence from the Italian NHS

Recently increasing public pressure to contain costs in the healthcare sector has led manynational governments to introduce some type of prospective payment system and reduce thescope of global budgeting. This study investigates the extent to which the reimbursementsystems of the Italian hospital sector have an impact on hospitals’ technical efficiency. Becauseof high variation in the financing and provision of healthcare services among regions andhospitals, Italy represents an interesting case study to test these effects. A two-stage DataEnvelopment Analysis was employed, in which the efficiency scores of all Italian hospitals werefirst calculated and then regressed on different environmental variables to capture the role ofreimbursement systems. The results found a significant impact of the use of Diagnostic-RelatedGroup-based prospective payment systems on hospitals’ efficiency.