Consolidation of Local Health Authorities and mortality in the Italian NHS

This paper studies the health consequences of administrative centralization in healthcare, focusing on the consolidation of Local Health Authorities (LHAs) within the Italian National Health Service. This type of reform fits within a broader set of cost-containment efforts aimed at reducing administrative expenditures and exploiting economies of scale. In the Italian case, the reform centralized governance and expanded the scale of health administration, creating authorities with substantially larger catchment areas and shifting decision-making to more heterogeneous jurisdictions. Such changes may affect the responsiveness of healthcare provision to local needs, the coordination of service delivery, and access to care. Using an event-study Difference-in-Differences design, we estimate the policy's impact on municipal mortality rates, accounting for heterogeneous treatment effects and co-occurring fiscal adjustment policies. We find a significant increase in mortality starting four years after implementation, with an average treatment effect on the treated of 2.1%. The effects are concentrated in municipalities belonging to absorbed LHAs and in those exposed to mergers involving relatively large pre-reform LHAs and substantial post-merger expansions in catchment areas; they are also unevenly distributed, creating new vulnerable areas. Welfare estimates based on life-years lost indicate that the monetary costs of increased mortality exceed plausible administrative savings by roughly an order of magnitude.