Vertical Equity in Healthcare Financing: A Progressivity Analysis for the Italian Regions

The aim of this paper is to measure for the first time in Italy the progressivity of healthcare financing systems at the regional level by using the Kakwani index (KI), the most widely used summary measure of progressivity in the healthcare financing literature.

KIs were reported by region and by health financing sources for the year 2015.

There were significant vertical inequities in healthcare financing at both national and regional level. OOP (out-of-pocket) payments and value added tax were slightly regressive; income taxation on firms and households was progressive.

After the introduction of fiscal federalism during the 90s, the healthcare financing system became regressive. A regional divide emerged: Overall regressivity is higher in the south and lower in the north, partly compensated by the interregional equalization mechanism, based on the redistribution of VAT from northern to southern regions. In times of policy interventions aiming at recovering the economy during the COVID-19 pandemic, it is important to monitor equity in healthcare financing.