Edited by Edoardo Ongaro, Andrew Massey, Marc Holzer and Ellen Wayenberg
Chapter 21: Do Italian Regions Effectively Use DRG Funding to Steer Provider Behaviour?
Elena Cantù, Clara Carbone and Eugenio Anessi-Pessina INTRODUCTION Funding systems are fundamental tools to manage intergovernmental relations in the public sector. In any given country, the presence of multiple types of government entities – vertically but also horizontally – raises the question of which jurisdiction is responsible for the provision of and payment for particular services. In many cases, issues of provision and payment are considered together: the jurisdiction in charge for provision also imposes taxes or fees to pay for the service. Nevertheless, there are multiple situations in which one entity decides which services will be provided, and/or at what level they should be provided, even though it is another entity that provides the funds. In these situations, the funding entity may want to affect the behaviour of the receiving entity. One way of doing this is to impose restrictions on the use of funds. Another is to appropriately design the funding rules and mechanisms. With specific respect to health care, different modes of payment (fixed budget, capitation, fee for service, case-based reimbursement) have been shown to create different incentives for providers and may thus contribute to different levels of efficiency, equity, and quality outcomes (Barnum et al. 1995). Outside the US, health-care funding is mostly public in that services are largely paid for by government entities. For countries whose health-care systems fall into the ‘public-integrated model’ (Docteur and Oxley 2003), which combines public financing of health-care provision with providers that are also mostly part of the government sector, payment arrangements...
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