The impact of health policy and technology on hospital productivity growth: evidence from Italy

This work provides evidence of the impact that Recovery Plans (RPs) have had on the productivity growth of Italian hospitals from 2010 - 2019. Using the Malmquist TFP index, we decompose the hospital's productivity into technological and efficiency changes. We find that the RPs have resulted in an increase in efficiency change, i.e. hospitals use their resources (physicians, nurses, other hospitals’ employees and the number of beds) more efficiently. In contrast, technological change has dramatically declined because hospitals are not using financial resources to buy innovative tools and learn new techniques that could improve healthcare processes. So, austerity measures have certainly reduced healthcare expenditure by optimising inputs capital, but they have contained investment in Information and Communication Technology (ICT). These results confirm that a lack of innovation and development has a severe longer-term impact on productivity.