{"id":6508,"date":"2025-01-31T08:12:07","date_gmt":"2025-01-31T07:12:07","guid":{"rendered":"https:\/\/www.rivistaeco.com\/?p=6508"},"modified":"2025-01-31T08:12:07","modified_gmt":"2025-01-31T07:12:07","slug":"the-healthcare-we-can-afford","status":"publish","type":"post","link":"https:\/\/www.rivistaeco.com\/en\/2025\/01\/31\/the-healthcare-we-can-afford\/","title":{"rendered":"The Healthcare We Can Afford"},"content":{"rendered":"

Italy spends less on healthcare than other European countries, both in per capita terms and as a percentage of GDP. With the pandemic over and the reformative push of the National Recovery and Resilience Plan (NRRP) waning, finding the over 47 billion euros needed to close the gap with European countries in per capita spending appears prohibitive for Italy’s public finances.<\/em><\/p>\n

\u00a0<\/strong><\/p>\n

The pandemic, which began in early 2020 and continued in subsequent years, subjected Italy\u2019s National Health Service (SSN) to a formidable stress test. It highlighted resilience and flexibility but also revealed weaknesses and gaps. The increased demand for more and better-quality services during the COVID years led to a significant boost in public resources allocated to the sector, briefly raising hopes among stakeholders. The SSN was perceived as struggling due to a lack of personnel and financial resources. However, the pandemic appeared to reverse this trend, with NRRP funds (particularly from Mission 6) serving as evidence of a renewed focus on investing in service networks (especially territorial) and modernizing hospitals and their technological infrastructure.<\/p>\n

As the pandemic subsided and public finances returned to \u201cnormal\u201d (including the reinstatement of fiscal rules), these hopes quickly faded. Similarly, the reformative push of the NRRP, which was meant to reduce the hospital\u2019s relative role in favor of territorial services centered around general practitioners\u2014who are reluctant to change their roles\u2014also dissipated. Today, the government faces calls for a substantial increase in resources for the SSN to prevent its collapse and save public healthcare. However, even if spread over several years, the proposed funding levels appear far beyond what is compatible with budgetary constraints.<\/p>\n

Healthcare Spending in Italy and Other European Countries<\/strong><\/h3>\n

The call for more healthcare funding begins with the comparison of Italy\u2019s healthcare spending to that of other European partners. Data from the OECD, measured as a percentage of GDP and in per capita dollars, allow comparisons between systems with different institutional setups, some based on social insurance and others on a single, centrally managed fund.<\/p>\n

In 2023, public healthcare spending in Italy stood at 6.2% of GDP, more than half a percentage point below the OECD average (6.9%). In Europe, fifteen countries now invest a higher share of their GDP in healthcare than Italy. The largest gap is with Germany, which allocates 10.1% of GDP to healthcare. A closer comparison is with Spain, which has a similar system based on a public fund distributed among regions tasked with managing healthcare. Following the pandemic, Spain overtook Italy with 7.2% of GDP allocated to healthcare, a full percentage point more than Italy. Greece, on the other hand, spends less than Italy, with 5.2% of GDP.<\/p>\n

 <\/p>\n

Public Healthcare Spending as a Percentage of GDP (2000\u20132023)<\/strong><\/p>\n

\"\"
Source: OECD (estimated values for 2023).<\/figcaption><\/figure>\n

 <\/p>\n

Examining trends over time reveals key developments. Setting aside France and Germany, which have historically spent more, we focus on Spain and Greece, which share a Mediterranean-style welfare system with Italy. Public healthcare spending increased as a percentage of GDP across the board until the twin crises of subprime mortgages and sovereign debts in 2010\u20132011. At this point, Greece\u2019s spending declined sharply, while Italy and Spain entered a decade of stabilized post-crisis healthcare spending relative to GDP. However, the two countries diverged during and after the COVID response years. Post-crisis budget constraints in Spain and Italy seem to have \u201crestrained\u201d healthcare funding availability compared to pre-crisis levels.<\/p>\n

Per Capita Spending<\/strong><\/h3>\n

\u00a0<\/strong><\/p>\n

Public Healthcare Spending Per Capita (2000\u20132023)<\/strong><\/p>\n

\"\"
Note: Dollars per person, PPP, current prices. Source: OECD (estimated values for 2023).<\/figcaption><\/figure>\n

 <\/p>\n

This interpretation is confirmed when examining public healthcare spending per capita. In 2023, Italy spent $3,574 per capita, below both the OECD average ($4,174) and the European average ($4,470). Some European countries invest significantly more in healthcare than Italy, such as Germany with $7,253 per capita and the Netherlands with $6,521.<\/p>\n

Italy\u2019s per capita spending is similar to Spain\u2019s (now slightly higher at $3,710) and significantly higher than Greece\u2019s $2,084 per capita.<\/p>\n

As with GDP spending, the twin mortgage and sovereign debt crises marked the beginning of a widening gap between Italy and other European countries, reaching $623 in 2019. This gap grew further during the pandemic as other European countries outspent Italy despite Italy\u2019s notable increase in healthcare expenditure during those two years.<\/p>\n

At the current dollar-euro exchange rate, Italy\u2019s per capita healthcare spending falls short of the European average by 807 euros in 2023. With a population of nearly 59 million, as certified by Istat, closing this gap would require approximately 47.6 billion euros in additional spending\u2014an enormous figure given Italy\u2019s current fiscal capabilities.<\/p>\n

Standard National Healthcare Needs and Spending<\/strong><\/h3>\n

Healthcare spending is often viewed as a proxy for service levels, albeit an imperfect one due to managerial inefficiencies. In practice, spending reflects decisions made by regional administrations responsible for service delivery. At a higher level, these decisions are influenced by national government funding allocations.<\/p>\n

Since 2013, Italy\u2019s standard national healthcare needs (FSNS) have been defined legislatively as the resources required to ensure essential levels of care with efficiency and appropriateness. However, the government determines healthcare funding levels based on budgetary constraints. These are formalized in the annual budget law and supplemented as necessary during the fiscal year. Once allocated, funds are distributed with most going to essential levels of care (unrestricted funding) and some earmarked for specific objectives. Distribution primarily considers the population of each region, adjusted for age-based healthcare needs.<\/p>\n

In 2019, pre-pandemic FSNS stood at approximately 114 billion euros. With COVID-19, it rose to 120 billion in 2020 and continued growing, reaching 134 billion euros in 2024 due to additional allocations from the Meloni government. The 2025 budget law plans a further increase of 1.3 billion euros, bringing the total to 136.5 billion euros. Additional increases of 5 billion euros in 2026 (to 140.6 billion) and nearly 6 billion in 2027 (141.3 billion) are also planned. Further annual increases of about 1 billion euros are projected from 2027 to 2030, when FSNS should reach 144.4 billion euros. Despite these planned increases, Italy remains far from the 47 billion euros needed to match the European average, even when summing all planned increments.<\/p>\n

 <\/p>\n

Allocations to Standard National Healthcare Needs (in Millions of Euros)<\/strong><\/p>\n

\"\"
Source: Authors\u2019 calculations based on data from the Italian Court of Auditors and Parliamentary Budget Office.<\/figcaption><\/figure>\n

\u00a0<\/strong><\/p>\n

The Risk of Deficits<\/strong><\/h3>\n

While closing the per capita gap with the European average seems unlikely in the short term, a pressing question is whether planned funding will cover projected increases in healthcare spending. Under the EU\u2019s new fiscal rules, Italy\u2019s government must plan and adhere to a medium-term budget trajectory for public administration spending.<\/p>\n

According to the Parliamentary Budget Office, healthcare spending was 6.2% of GDP in 2023 and is expected to increase slightly (0.1%) in 2024, reaching 6.4% of GDP in 2026 and 2027\u2014returning to pre-pandemic levels. This implies that from 2025 to 2027, healthcare spending growth will outpace the overall annual public spending target of 1.5%. By 2027, the gap between healthcare spending and planned SSN funding is projected to be nearly three times that of 2024. Regional healthcare agencies typically offset some of this gap with increased own revenues, but such trends suggest potential financial tensions, raising the perennial debate over whether underfunding (blaming the central government) or overspending (blaming regional governments) is to blame.<\/p>\n

A Recurring Problem<\/strong><\/h3>\n

The financial history of the SSN is deeply intertwined with operational deficits. Established in 1978 to replace the debt-laden mutual insurance system, the SSN inherited these deficits, which became regional deficits and grew throughout the 1980s. The early 1990s crisis forced spending controls, including introducing regional own resources (e.g., IRAP, additional IRPEF, and copayments) to increase regional accountability. This system held until the early 2000s, after which deficits resurfaced, especially in certain regions.<\/p>\n

Reports on healthcare spending monitoring by the Italian Ministry of Economy document annual regional performance, showing a significant reduction in overall deficits from approximately 6 billion euros in 2006 to 726 million in 2020 due to recovery plans. However, the pandemic reversed this trend sharply, with deficits doubling to 1.4 billion euros in 2022. The Parliamentary Budget Office anticipates further deficit increases, posing financial risks that should be avoided through strategic government decisions to clarify what the SSN can realistically offer citizens.<\/p>\n

 <\/p>\n

Regional Deficits (in Millions of Euros, 2006\u20132022)<\/strong><\/p>\n

\"\"
Source: Italian Ministry of Economy.<\/figcaption><\/figure>\n

\u00a0<\/strong><\/p>\n

\u00a0<\/strong>\u00a0<\/strong><\/p>\n

Chiara Mingolla is a PhD candidate in Public Administration Economics and Finance at the University of Bari Aldo Moro. She holds a degree in Economics from the Catholic University of Milan and has worked as a research assistant for lavoce.info.<\/em><\/p>\n

Gilberto Turati is a Full Professor of Public Finance at the Catholic University of Milan. He is Deputy Director of the Italian Public Accounts Observatory and a member of the board of the Italian Society of Public Economics (SIEP). <\/em>He is also a contributor to lavoce.info.<\/em><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Italy spends less on healthcare than other European countries, both in per capita terms and as a percentage of GDP. 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