Understanding inappropriateness in health spending: The role of regional policies and institutions in caesarean deliveries

We analyze the determinants of caesarean sections and the role that regional policies and institutions can play in controlling for inappropriateness in healthcare. We consider Italy as a case study, given that: at the national level caesarean sections are above OECD average but regional variation is significant; almost all childbirths are managed within the National Health Service, in a public or a private hospital; regional governments are in charge of managing and funding (at least partially) health care services. Controlling for average patients' characteristics and the riskiness of births, in the attempt to separate "appropriate" from "inappropriate" treatments, we find that regional policies and institutions do matter. In particular, our results suggest that decentralised DRG tariffs might be an effective policy tool to control inappropriateness, once the role of private providers is taken into account. Also the degree of fiscal autonomy in funding regional health expenditure, and the experience of regional government's president are important.