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Healthcare spending still on the rise, but less than inflation: report by the Public Accounts Observatory

The 2023 Budget law increased the resources for the NHS by 4 billion, but the increase in funds in recent years cannot cover inflation

Healthcare spending still on the rise, but less than inflation: report by the Public Accounts Observatory

The 2023 budget law has increased by 4 billion compared with the resources allocated to the Health Service in hand, reaching 128 billion euro. Numbers in hand, of these additional resources, 1,4 billion will be used to cover the higher costs of energy sources while 200 million will be used to increase the salaries of emergency room operators. “Although counting on a substantial increase in funds, compared to the experience of the pre-Covid years when funding increased by 1 billion a year, it's only 3 percent more despite theinflation reached almost 12 percent on an annual basis in November", points out the CPI Observatory in its last issue published on January 5th.

The evolution of Italian public health expenditure since 2000

Spending in 2023 will increase in nominal terms from the pre-Covid period by ben 15 billion, reaching 131 billion. However, if health care expenditure is considered in real terms (i.e. adjusted for inflation), the increase in the years of the pandemic is canceled out by the surge in inflation and "expenditure, valued at constant prices, returns slightly below the values ​​of 2019”, points out the Observatory.

Extending the gaze to the long term, between 2000 and 2023 public health expenditure almost doubled in nominal terms, rising from 68 to 131 billion euros. However, if inflation is included in the calculation, the percentage increase is equal to +19%.

In real terms, the increase all occurred in the early years of the century. Then, after the 2008 financial crisis and the subsequent sovereign debt crisis in Europe, “we observe a reduction followed by a long period of stability, which ended only in 2020 with the explosion of the pandemic. This increase in real terms since 2000 is probably not sufficient to keep pace with the growing demand for health services. Suffice it to say that in the last 20 years the over 65s have increased by 2,5 million” observe the experts, who underline that for a long time now, the budget law has been allocating additional funds for health care compared to what has already been foreseen. “A bad practice” which prevents operators from planning activities for the years to come” and reflects the highly precarious state of public finances. 

Similar considerations are obtained by looking at the ratio of health expenditure to gross domestic product: between 2000 and 2009, the expenditure/GDP ratio rose from 5,5 per cent to 7,1. In the following years an arduous return journey was attempted. In 2023 it would drop to 6,6 per cent, which in any case remains one of the highest values ​​in the last twenty years. 

Pnrr and healthcare 

"The reduction in real terms of funding and current health expenditure compared to 2022 is however accompanied by the resources and reforms envisaged by the Health Mission (M6) of the National Recovery and Resilience Plan (PNRR)”. In numbers it is 15,6 billion of euros to be allocated to healthcare to which are added the resources included in the other missions. 

Number six is ​​about spreading new models for health protection through the development of various organizational innovations. On the one hand, the development of proximity networks, intermediate structures and telemedicine for local healthcare assistance; on the other hand, the promotion of innovation, research and digitization of the National Health Service.

In terms of reforms, the DM 77/2022 and even earlier the Decree of the Ministry of Health of 10 July 2007 (and therefore well before the PNRR), had begun to implement the model of Houses of Health, i.e. multi-purpose structures able to provide all the social and health services in the same structure. However, the Undersecretary of State for Health Marcello Gemmato has repeatedly expressed his perplexities regarding the question of the Community Houses and the Hospitals of Community arguing that, once the funds from the PNRR have run out, it will become unsustainable to finance the huge costs of maintaining them. 

"The main problem concerns the need for personnel for the implementation of the reform, the expenditure of which must be financed by the standard national health requirement", explains the CPI Observatory. In fact, Mission 6 envisages 1350 Community Houses, 600 Territorial Operations Centers and 400 Community Hospitals for a total of approximately 18.350 nurses, 10.250 support personnel, 2000 social and health workers and 1350 social workers. For the undersecretary, the optimal solution would be to focus on strengthening the network of family doctors and pharmacies already present in the area, thus avoiding the creation of duplicates such as the homes and hospitals of the community with all the critical issues that they will have. This position contrasts with an alternative view which sees general practitioners as key players in the new homes and community hospitals. "On the front of the reform of territorial medicine, however, there are no great steps forward at the moment", conclude the experts.

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