Relationships between technical efficiency and the quality and costs of health care in Italy†

OBJECTIVE This paper reports the measurement of technical efficiency of Tuscan Local Health Authorities and its relationship with quality and appropriateness of care. DESIGN First, a bias-corrected measure of technical efficiency was developed using the bootstrap technique applied to data envelopment analysis. Then, correlation analysis was used to investigate the relationships among technical efficiency, quality and appropriateness of care. SETTING AND PARTICIPANTS These analyses have been applied to the Local Health Authorities of Tuscany Region (Italy), which provide not only hospital inpatient services, but also prevention and primary care. All top managers of Tuscan Local Health Authorities were involved in selection of the inputs and outputs for calculating technical efficiency. MAIN OUTCOME MEASURES The main measure used in this study are volume, quality and appropriateness indicators monitored by the multidimensional performance evaluation system developed in the Tuscany Region. RESULTS On average, Tuscan Local Health Authorities experienced 14(%) of bias-corrected inefficiency in 2007. Correlation analyses showed a significant negative correlation between per capita costs and overall performance. No correlation was found in 2007 between technical efficiency and overall performance or between technical efficiency and per capita costs. CONCLUSIONS Technical efficiency cannot be considered as an extensive measure of healthcare performance, but evidence shows that Tuscan Local Health Authorities have room for improvement in productivity levels. Indeed, correlation findings suggest that, to pursue financial sustainability, Local Health Authorities mainly have to improve their performance in terms of quality and appropriateness.