Background: There has been increasing interest in measuring the productive performance of healthcare services since the mid-1980s.
Objective: By applying bootstrapped data envelopment analysis across the 20 Italian Regional Health Systems (RHSs) for the period 2008-2012, we employed a two-stage procedure to investigate the relationship between care appropriateness and productivity evolution in public hospital services.
Methods: In the first stage, we estimated the Malmquist index and decomposed this overall measure of productivity into efficiency and technological change. In the second stage, the two components of the Malmquist index were regressed on a set of variables measuring per capita health expenditure, care appropriateness, and clinical appropriateness.
Results: Malmquist analysis shows that no gains in productivity in the health industry have been achieved in Italy despite the sequence of reforms that took place during the 1990s, which were devoted to increasing efficiency and reducing costs. Analysis of the efficiency change index clearly indicates that the source of productivity gain relies on a rationalization of the employed inputs in the Italian RHSs. At the same time, the trend of the technological change index reveals that the health systems in the three macro-areas (North, Central, and South) are characterized by technological regress.
Conclusion: Overall, our results suggest that productivity increases could be achieved in the Italian health system by reducing the level of inputs, improving care and clinical appropriateness, and by counteracting the 'DRG (diagnosis-related group) creep' phenomenon.