Against All Odds: The Contribution of the Healthcare Sector to Productivity. Evidence from Italy and UK from 2004 to 2011

Abstract

We assess the productivity growth of the English and Italian healthcare systems over the period from 2004 to 2011. The English (NHS) and the Italian (SSN) healthcare systems share many similar features, facilitating comparison: basic founding principles, financing, organization, management, and size. We measure productivity growth as the rate of change in outputs over the rate of change in inputs. We find that the overall NHS productivity growth index increased by 10% over the whole period, at an average of 1.39% per year, while SSN productivity increased overall by 5%, at an average of 0.73% per year. Differential growth reflects different policy objectives. In England, the NHS focused on increasing activity, reducing waiting times and improving quality. Italy focused more on cost containment and rationalized provision, in the hope that this would reduce unjustified and inappropriate provision of services.