D6.10 – Report with results of empirical analysis of impact of incentives on quality in Italy

When public money pays for hospital care, how do the rules of payment shape the quality of treatment patients actually receive? And does simply publishing how well each hospital performs push providers to do better? This report tackles both questions using the Italian National Health Service as a natural laboratory, taking advantage of the fact that Italian regions organise their own hospital care and set their own reimbursement tariffs, creating wide variation across the country that can be studied.

The analysis draws on two original datasets built specifically for this work. The first reconstructs the diagnosis-related group (DRG) reimbursement tariffs set by every Italian region from the introduction of the system in 1995 to 2021, a task complicated by information that was often fragmented and never digitised. The second gathers hospital quality indicators published since 2012 by the national agency AGENAS through the National Outcome Programme (PNE), covering all accredited public and private hospitals. Combining the two, the report examines the effects of publishing performance data, using timely femur fracture surgery as a case study, and then the relationship between tariff levels and quality across femur fractures and childbirth. The main message is nuanced: both the release of performance information and higher tariffs improve process indicators, such as prompt surgery and appropriate delivery choices, and these effects are stronger where hospitals face more competition, but neither reliably improves harder patient outcomes like readmission rates.

What the deliverable contains:

• A reconstructed panel of regional DRG tariffs across all Italian regions from 1995 to 2021, with descriptive analysis of how tariffs have diverged over time
• An analysis of how publishing hospital quality data, first to professionals in 2012 and then to the public in 2016, affected performance, and how competition amplified that effect
• An empirical study of the link between DRG tariffs and quality for femur fractures and deliveries, using both a fixed-effects panel model and a difference-in-differences design around the 2012 national tariff cap
• Policy insights on the risk of rewarding easily measurable process indicators that may not translate into better health outcomes