Under-spending, over-spending or substitution among services? Spatial patterns of unexplained shares of health care expenditures.

Using individual-level administrative data, we investigate the spatial patterns of unexplained shares of health care expenditures (HCE) at the municipality level. The focus is on the elderly population in the Italian Region Friuli-Venezia Giulia observed over the period 2017-2019. The empirical analysis comprises two steps. First, random-effects two-part models are estimated to analyze the effect of age, morbidity, and death on the probability and amount of positive individual total HCE and its components. Second, the unexplained shares of HCE at the municipality level are examined to identify areas with under- or over-spending and substitution among services. Results confirm the existing findings on the determinants of HCE and reveal geographic patterns in the unexplained shares of expenditures. We identify clusters of municipalities with observed HCE higher than predicted for each type of service and clusters with substitution between home care and all other services. These findings are associated with the degree of urbanization of these areas and, consequently, with the ease of access to health care. This is crucial from a policy perspective, as it indicates specific policy targets for public health intervention.

The long-term effects of hospitalization on health care expenditures: An empirical analysis for the young-old population in Lombardy.

As the burden of acute care on government budgets is mounting in many countries, documenting the evolution of health costs following patients' hospital admission is essential for assessing overall hospital-related costs. In this paper, we investigate the short- and long-term effects of hospitalization on different types of health care expenditures. We specify and estimate a dynamic DID model using register data of the entire population of individuals aged 50-70 residing in Milan, Italy, over the period 2008-2017. We find evidence of a large and persistent effect of hospitalization on total health care expenditures, with future medical expenses mostly accounted for by inpatient care. Considering all health treatments, the overall effect is sizable and is about twice the cost of a single hospital admission. We show that chronically ill and disabled individuals require greater post-discharge medical assistance, especially for inpatient care, and that cardiovascular and oncological diseases together account for more than half of expenditures on future hospitalizations. Alternative out-of-hospital management practices are discussed as a post-admission cost-containment measure.