Hospitals’ strategic behaviours and patient mobility: Evidence from Italy

Abstract

This study explores the behaviour of hospitals in Lombardy in attracting patients from outside the region and investigates the effects on the quality of care to regional patients, where treatment of the latter is constrained by a budget cap while extra-regional patients represent an unconstrained source of revenue. The data suggest that hospitals use waiting time and length of stay to attract extra-regional patients. Regional patients in both private and public hospitals with higher proportions of extra-regional patients are characterized by lower mortality rates and reimbursement costs. These results suggest that the market for extra-regional patients has no negative effects on resident patients. Finally, the pattern of reimbursement for extra-regional care generates a financial flow in favour of wealthier regions, exacerbating the North–South divide in the National Health Service. Some form of regulation for extra-regional mobility is advisable to reduce the gap.