Devolution and fiscal federalism in the health care system: Juridical observations

• Author: Monica de Angelis
• Position: Universita Politecnica Delle Marche Ancona, Italia.
• Pages: 143-156

Page 143

1. Introduction The Possible Role of Fiscal Federalism in the Health Care System

The day after the issuing of the first law (2000) that would concretely introduce mechanisms of fiscal federalism in the Italian system - that is a system of financial decentralization on separate government levels - in a study most of the citizens considered that a larger regional autonomy (compared to the one already attained) in the health care system would have produced non-positive results. As such, there was a loud request for guaranteeing homogeneity of services [18] offered throughout the land. In order to provide major resources to the health care system, so as to reach the average European level, new measures have been taken since 2001. These measures are meant to make the Regions more responsible towards their spending and as such, the process of "health care federalism" that has finally attained constitutional coverage. Spending on health care system has become a crucial subject in all industrialized countries, and it is even more so in those systems that have redesigned (or looked towards) the distribution of functions in a federal way. However, for some time now, the doctrine, supported by comparative studies in some federal countries, has pointed out the paradox rooted in the federal organization of the health care system: that is, trying to manage a sector that wants to guarantee equality by giving value to the local diversities of the country. In Italy today, more than ever, it is fair to ask whether fiscal federalism in the health care system means progress or a step backwards compared to the National Health Service (NHS) planned during the 90s andPage 144fossilized in the new model of distribution of competences as provided for by the 2001 constitutional reform (devolved NHS). [9] In other words, we should ask what eventual opportunities can a financial scheme offer as the one stated in Law n. 42/2009 that gives voice to the art. 119 of the reformed Constitution and to the provisions of the art. 117 that, in the health care context, entrusts the fixing of the basic level of assistance ("livelli essenziali delle prestazioni", Lep) to the exclusive legislative powers of the State. In fact, it should be remembered that by following the footprints of the old art. 117 Const. that entrusted the Regions with health and hospital assistance, the legislator, in one decade, has moved the reference axes the NHS from national level to regional level, transforming it into a group of regional health services, with a considerable share of organizational, managerial and entrepreneurial autonomy. Obviously, one can immediately say that this would mean regression if, following the process of devolution and of the introduction of fiscal federalism, there will be greater inequality in the population in terms of access to and quality of services offered in the past.

2. A Close Scrutiny of the Regulations: Rationalization, Regionalization, Federalism

The present NHS setup makes fundamental reference to Law n. 833/1978 that set it up. This law finally marked the end of the previous mutualistic-hospital system structured around a multitude of bodies that were quite different from each other and which did not have any connection between outpatient and home assistance and hospital assistance (with inevitable and consequent duplication of operations and waste of resources) in addition to the absence of an all-embracing idea of health. The organizational plan of 1978 followed up by the legislator carried out, as required by art.32 of the Constitution, an almost total "pubblicizzazione" (rendering facilities under public law) of those facilities that offered health services. And it was, above all, a plan inspired by the principle of universality of safeguarding health care guaranteed to everybody, of equality for all people who receive health services, of entirety of services/performances (based on a synergic system of assistance and sociality for which all services not only comprehend health care but also prevention and control). According to Law n. 833, there are two decisional poles in the health care system: one at the central level (the ministry) and the other one at the peripheral level (Unità sanitarie locali/Local health services). At the top level, health policy decisions are taken care of and at the second level, decisions regarding day-to-day management of the objectives defined at ministerial level are focused on. The Regions are handed over the job to program and coordinate facilities offering health services which operate territorially. This system is based on a financial model characterized by the National health fund (Fsn) which gets its contribution from general taxation and follows a cascade model that starts from the State and descends towards the bodies operating locally.

It can be said that devolution in the health care system came out of the need to correct practical application of Law n. 833 that was leading to economic disaster a primary service that guaranteed an absolute right, such as the right to health. The first concerns for an uncontrolled management of health services - that would soon give rise to serious consequences in terms of increased spending - started at the beginning of the 80s which made the local health services have a board of auditors and the strictest controls on resolutions. ThePage 145reason for this was to put a brake on the act of not being responsible about one's budget. Basically, since 1982, a series of corrective measures began that characterized the health regulations in the following two decades. In fact, after some time, rules related to the sharing of pharmaceutical expenditure, instrument and laboratory diagnostics and to a specific rationalization of services with an eye on those who gave orders on spending were introduced. Moreover, other provisions connected to issues on which there would be interventions many times were brought in: more specific criteria for financing the National health fund and for splitting it out among Regions; ways to even out the deficit of the local health services; revision of the therapeutic manual; quantification of health contributions. All in all, there was this first big attempt by the State to make the Regions responsible for their expenditure that exceeded the amount coming from the National health fund. This manoeuvre was however thwarted by the Constitutional court that declared some of those rules illegitimate, i.e., regulations that spoke about obligation and not the choice the Regions could make to turn to self- financing (even with taxes) in case of a deficit. [17] Nonetheless, efforts to limit spending on health care still went on. In the health plan of the second half of the 80s, a specific goal was made to rationalize health services, and the Regions, in their detailed action plan, were asked to pay attention to the organization and real demands of the health care system especially concerning hospitals as it was in this area that excessive expenditure had been noted. New measures (or rather operational plans whose implementation was left to the initiative of individual Regions) were targeted towards defining the number of beds, duration of hospitalization, unification and transformation of services in order to lower and to rationalize uncontrolled expenditure.

It was at that time that concepts like "day hospital", intramural private practice, wards with paid hotel-like facilities, a standard for the number of hospital staff per bed and reviewing of the pharmaceutical handbook came into being. The initiatives of the public legislator did not give rise to the effects hoped for, and in the early 90s, there was a stronger determination to go further. The Regions now had to take on more decisional responsibilities in terms of planning and organization, and to this effect management boards of the local health services were abolished; [12] also the financing criteria for health expenditure for each Region were changed as they were not adequate for taking into account the differences between the Regions in the allocation of resources. [14] The new financial model essentially took into account the so-called per-head share, i.e., every Region received an amount that corresponds to a unit value (quota) which is multiplied by the number of residents. [13]

Finally, in the early 90s, there was an awareness of the urgency to apply the principles and models of cost-effective management, bearing in mind the validity and correctness of the decision made in 1978, i.e., that of implementing art. 32 of the Constitution by means of instituting an NHS set to safeguard the rights of all citizens in terms of uniform and appropriate standards of healthcare. And it was the very Constitutional Court that contributed to the revolution of the system and to the substantial redistribution of the functions: emblematic are the sentences in which the vision of the right to health are introduced, such as "financially conditioned right". [16] Therefore, a couple of legislative decrees started off the so-called bis reform of the NHS [15] that established a principle: this principle wanted uniform levels of health care to be fixed according to the resources established by the financial law and would Page 146be related to the volume of the available resources. The Regions would face balance deficits of the local health services and hospitals using their own resources with no financial aid from the State, yet specifying...