We interview Edouadro Di Cicco about private healthcare in Italy.

HCE: Today the 20 Italian regions are fairly autonomous in their healthcare strategy. Some, such as Venice are well run and favour the public sector, others, such as Lombardy, are well run and favour a balance between private and public. Others, in the south, are in debt and not well run. Do you see this regional structure changing? I hear that the Ministry of Health is trying to exert more control, can it?

EDC: Regions integrate private institutions in healthcare programs according to two different strategic approaches: integration and competition. The integration approach aims to avoid the overlapping between public and private healthcare: private organizations are asked to play a support role in order to complete the public offer. In other regions with a higher presence of private providers such as Lombardia, public and private hospitals are placed on the same level and citizens have full freedom of choice.

Although the law regulating accreditation of private organizations was proclaimed in 1992, due to significant bureaucratic hurdles, many regions are still working to tune accreditation procedures and monitoring processes are not very effective. You could say that the accreditation of private healthcare institutions is a strategic lever for extending or restricting the healthcare services offered to citizens in the different Italian regions.

HCE: As I understand it, in Italy there are very few big private for profit hospital groups like Rhoen Klinikum in Germany or Generale de Sante in France. Why is this, who are the big players and do you see this changing?

EDC: In Italy the presence of big private institutions is limited mainly due to accreditation restrictions that could be related to either cost-cutting measures that reduce the tariffs paid to private health providers or simply big differences among Italian regional regulations and a lack of transparency in terms of accreditation.

There are seven main players in private healthcare: Papiniano, Giomi, HSS, S.A.P.A., Tosinvest, Gruppo Villa Maria, Humanitas. Together these seven have around 80 clinics and account for 25% of private beds – the total number of private clinics is around 630. Ecclesiastical organization (such as the San Raffaele foundation) play an essential role in the market. In the short to medium term we can imagine a further consolidation of minor operators into the 7 main groups and the entry of new investors directly linked to the announced Government tax breaks.
 
HCE: I know Italian public sector hospitals are outsourcing certain services do the private sector such as imaging. Has this happened a lot and do you expect a trend in this direction? If so in what areas in particular?
 
EDC: Following the example of other countries, even in Italy we can imagine an increase of services outsourcing from public organizations. Main targets of outsourcing strategies are similar to the ones of other industries: cost cutting, flexibility and effectiveness increase. Three services areas are involved: clinical related services (mostly imaging, lab analysis and sterilization), non-clinical services (logistics, catering ..) and general services (legal, administration, facility management). Public organizations are more inclined to outsource non-clinical and general services due to the fear of losing control of core clinical activities and thus directly affecting the patient.

HCE: What other changes in law do you see which will affect private healthcare in Italy?

EDC: Private healthcare is threatened by new government containment costs measures implying more severe budget ceilings for some high return services provided by private accredited structures such as diagnostics. Moreover, it’s reasonable to imagine regulation aiming to increase the control on DRG and asking private healthcare providers to track the volume of provided services by implementing IT communication systems.

HCE: Where do you see opportunities for private healthcare in Italy?

EDC: Private institutions act according to market rules and can be more efficient than public organizations that are forced to deal with bureaucratic processes such as tenders for supply or concourses to hire employees. Moreover, private groups are inclined to provide high return services focusing on “high return” DRG.