In Italy, different payment mechanisms apply to different health care activities, as summarized in Table3.7. The regions or local health authorities pay for all providers’ services, with few exceptions. For example, the research activity of IRCCS is financed by the Ministry of Health. The remuneration system follows the rules established at regional level within the regulatory framework defined at national level to ensure homogeneity. The system was initially established by the health care reform of 1992, which introduced prospective payment based on fee-for-service schedules and DRGs.
Table3.7
As a general rule, there are three main types of payment methods to fund SSN organizations and accredited providers. The first type is per capita funding that is used for local health authorities. Depending on regional policies, per capita funding can be adjusted depending on population age structure and other criteria, like population density or altitude. The second type of payment method is volume-based. Different fee-for-service, DRGs and day rates (for example for health services in nursing homes or rehabilitation units) are used to compensate providers (see Table3.7). Finally, SSN organizations and, to a lesser extent, private-accredited providers, receive funds according to several specific budget lines. This latter funding type is generally used to compensate providers for specific activities that are not well captured by the fee-for-service and DRG models (e.g. ambulance services). They are also used to adjust funding according to past expenses and other policy objectives (e.g. to fund innovative projects). SSN organizations and private-accredited providers are also fully reimbursed for very expensive drugs with no caps used for hospitalized patients or directly delivered to patients by their own pharmacies (this line of expenditure is called file F).
The 1992 national health reform legislation strengthened patients’ free choice of providers, including private-accredited ones, and introduced per-case and per-unit-of-service funding for hospital care and outpatient care, respectively. To sum up, all-inclusive tariffs are predetermined for each individual service. There are three types of tariffs.
The criteria for determining tariffs are defined by law at national and regional level and are required to reflect costs according to adequate efficiency levels and comply with the constraints dictated by the overall financing levels of the SSN. In addition to tariffs, local health authorities, SSN hospitals and private-accredited providers are funded according to specific budget lines. These may apply to a variety of services, including running emergency departments, tissue and organ banks, and specific projects. In general, providers, especially government-owned ones, receive an important share of resources from specific lines of funding that are not volume-related and are often justified, implicitly or explicitly, based on past costs (Fattore & Torbica, 2006).
The health services for which tariffs are determined at national level, in order to ensure homogeneity between regions, are: 1) acute hospital care (DRG system); 2) outpatient specialist services; and 3) prostheses (Ministero della Salute, 2020a).
In 1995 the central government introduced the use of a prospective per-case financing of hospitals. The legislation adopted the DRG system used by Medicare in the United States to classify hospitalizations and identify tariffs for ordinary admissions, day hospital and day surgery (Fattore & Torbica, 2006). Since 1 January 2009, version 24.0 of the Medicare DRG system has been used for acute hospital care provided by public and private-accredited hospitals. This version includes 538 valid groups; of these, 44% are surgical. DRG groupings and tariffs are sporadically updated at national level and more frequently at regional level (Ministero della Salute, 2020b).
The tariff is an all-inclusive remuneration of the treatment profile, on average associated with a type of hospitalization, and may also reflect health planning policies aimed at encouraging the therapeutic and/or organizational methods considered most effective and appropriate (e.g. day hospital) and at discouraging those deemed inappropriate. Current inpatient tariffs were defined based on: the results of the 2011 national study on the costs of DRGs and the level of complexity and severity of the cases treated in the 41 hospitals included; health planning guidelines which promote a significant reduction of inappropriate hospital admissions; the need to ensure compliance with budget constraints and the current macroeconomic situation; OECD data indicating room for improvement in production efficiency in SSN hospitals; and the tariff values in force at regional and interregional level.
Each region and autonomous province is required to determine its own tariffs, within the maximum tariffs established by the Ministry of Health. The objective is to reduce interregional variability. The regions establish their tariffs based on the costs incurred by a sample of regional public and private providers with acceptable levels of efficiency. The TUC are used for the compensation of interregional hospital mobility. These tariffs are DRG-specific and are established at national level (Fattore, Petrarca & Torbica, 2014).
Reimbursement for outpatient specialist care, diagnostic imaging and laboratory exams is based on tariffs defined by the unit of service. The first nomenclature of outpatient specialist care, dated 1996, reported a list of specialist outpatient services provided by the SSN. This nomenclature is not revised on a regular basis. The following one (introduced in 2012) reported the corresponding national tariffs based on a full costing approach. The new nomenclature, introduced in 2017, eliminated services that were obsolete, and included new ones and added services that, due to technological advancements, are now safely deliverable in outpatients settings. The most relevant additions were medically assisted reproduction, genetic counselling and interventions with high technological content (e.g. hadrotherapy). However, tariffs to be paid to (public and private) providers for these services have yet to be published.
As for outpatient care, the new nomenclature for prosthetic assistance services, introduced in 2017, replaced the nomenclature that was in place since 1999; however, tariffs are still being defined. The SSN guarantees the provision of prostheses, orthoses and technological aids to persons recognized as disabled or awaiting recognition of disability. The main changes introduced in 2017 by the Italian Government (Consiglio dei Ministri, 2017) include: expanding the list of new recipients (i.e. people suffering from some rare diseases and those assisted in integrated home care); adding new devices (e.g. digital technology hearing aids); stressing the importance of quality (the descriptions of the aids include innovative components and construction quality criteria); and less bureaucracy (simplified language in identifying aids and streamlined supply procedures).
Tariffs for services provided by intermediate care facilities (e.g. community hospitals, hospices and rehabilitation centres) are still to be defined in agreement with central government, regions and the Permanent Commission for Tariffs (Presidenza del Consiglio dei Ministri, 2020). Currently, regional tariffs are applied (for example, in Veneto, an all-inclusive daily tariff of €145 is paid to virtually any provider) (Regione Veneto, 2019).
Paying for long-term care and residential or semi-residential services, where health care and rehabilitation are provided, is based on cost sharing between the patient and the municipality of residence with important variations across regions and even municipalities. For long-term care there is a universal cash benefit scheme (of €522 per month in 2021) for disabled people, called the Indennità di accompagnamento, along with regional funds (with large differences) and municipality contributions. The level of cost sharing is generally determined by patient income. The health share is fully covered by regional or local health care authorities and is defined on a daily basis (see also section 5.8). The Italian NRRP commits the country to establishing a national long-term universal scheme that re-composes all the fragmented sources of funding for social care.
The remuneration of community pharmacies (for medicines reimbursed by the SSN) is based on proportional margins in relation to the selling price. According to the latest legislation (Law 122/2010), margins for wholesalers and pharmacists are equal to 3.00% and 30.35%, respectively. Moreover, since 1997, there has been a progressive discount ranging from 3.75% to 19.00% according to the drug price bracket. There is also a further discount on the final price of the medicine, which has been equal to 2.25% since 2012 (Law 135/2012).
Law 122/2010 also provided for a radical reform of the remuneration of pharmacies, establishing that it should be based on a fixed amount in addition to a reduced percentage of the drug’s reference price. An agreement between the AIFA and pharmacies associations was stipulated in October 2012 but not approved by the national government, and the deadline for the introduction of the new remuneration system has been postponed several times. At the time of writing, almost a decade later, there is no permanent agreement in place.
An additional remuneration for pharmacists, equal to €50 million for the year 2021 and €150 million for 2022, was introduced on an experimental basis, starting from 1 September 2021 (Legislative Decree 41/2021). The new remuneration system should progressively enhance the professional role of pharmacists, based on the services provided to citizens and only partially linked to medicine prices. Indeed, the decree has introduced an extra fixed remuneration of €0.08 for each medicine package (€0.12 for generics).
GPs (or medici di medicina generale) and family paediatricians (pediatri di libera scelta) are independent professionals with a special contract with the SSN to provide basic health care for adults and children under 14 years of age, respectively. Their remuneration is mainly based on capitation. The maximum number of patients on each doctor’s list is 1500 for GPs and 800 for paediatricians, but many doctors exceed these numbers. Fee-for-service remuneration also applies for some services (e.g. home visits).
Remuneration of GPs is divided into the following (ACN, 2022):
Currently, the annual mean gross salary of GPs is about €105 000 (approximately €4600 net per month), 197% higher than the average monthly salary in Italy. Of course, salary is higher for GPs with more patients on their lists.
The remuneration of paediatricians is structured in the same way. The per patient amount is €86.31. An additional fee (€17.93) is paid for each child under the age of 6 because of the additional workload related to early childhood programmes (neonatal and paediatric patient pathways).
All health care professionals working in public facilities are remunerated according to the National Collective Labour Agreement (CCNL) – Health, negotiated between trade unions and the government, and reviewed every three years (the latest refers to the three-year period 2016–2018). The CCNL defines monthly salaries, performance-related payments, extra fees (e.g. for night duty or risk indemnity), annual leave, other permitted leave (e.g. for family reasons), illness, resignation and dismissal. The average gross salary of a physician is about €75 000 per year (approximately €3400 net per month), 119% higher than the average monthly salary in Italy. Annual salary significantly increases according to seniority (from €24 000 during the training period to over €100 000 for chief physicians) (Jobbydoo, 2021).
Physicians working in the public sector are also allowed to practise privately, earning extra income on a fee-for-service basis. The freelance work performed within the hospital of employment (also called intramural or intramoenia activity) is regulated by law and refers to services provided outside normal working hours by using the hospital’s facilities, and receiving payment from patients, with a fee withheld by the hospital. Law 189/2012 promoted intramoenia activity through the creation of ad hoc facilities within public hospitals, the activation of telematic network infrastructure, the setting of adequate tariffs to remunerate professionals and support staff (defined at local level), setting pro-rata costs for depreciation and maintenance of equipment and to ensure the coverage of all direct and indirect costs incurred (Ministero della Salute, 2021d).
Most personnel working in the SSN (administrative staff, nurses, pharmacists, psychologists) are employees paid on a salary basis with contracts similar to those for physicians. Their remuneration tends to be lower than those of medical doctors. For example, nurses’ average gross salary is about €26 400 per year (approximately €1450 net per month). Higher compensation (up to €2300 net per month) applies if they are at the end of their career and/or hold a position of higher responsibility (e.g. nursing coordinator).
Most dentists work in the private sector (i.e. clinics or practices), with variable but generally high profits depending on seniority and job title. For example, a freelance dentist working in a dental practice earns up to €4000 net per month. Conversely, dentists working in the public sector have salaries that are comparable to those of physicians (about €3000 net per month).
Some medical specialists (so-called Sumaisti) have a particular contract with the SSN. They are independent professionals who operate in SSN outpatient facilities and are paid according to the actual number of hours they work.
Doctors and other health professionals working for private organizations have their own contracts. Typically, there is a larger variation in remuneration, with some doctors (especially surgeons) being paid at much higher salaries than in the SSN. A free labour market applies to these personnel; contracts are regulated by agreements between trade unions and industry representatives.
Depending on regional legislation, the General Director of an SSN organization has a temporary private contract that is renewable every three to five years. Average compensation is about €150 000 gross per year plus a pay-for-performance (P4P) element of about 20%. The General Director appoints the medical director, the administrative director and, depending on the region, the director for the integration between social and health care; and, in some regions, the director of health professionals (Direttore Assistenziale) who has the role of coordinating the activities of nurses and other health personnel (excluding medical doctors). They generally earn about €130 000 gross per year plus about 20% P4P.