Private healthcare expenditure and unmet medical needs: Assessing regional disparities in Italy

This paper examines the decongestion effect hypothesis by exploring whether higher private healthcare financing is associated with better access to public services, as would be expected if private financing were linked to lower pressure on the public healthcare system. Using data from Italian regions over the period 2017-2022, we consider self-reported unmet needs for specialist visits as an indicator of barriers to access to public services, distinguishing between financial and waiting-time constraints. We estimate a bivariate probit model to analyze the association between regional private healthcare expenditure and unmet specialist visits, controlling for individual socioeconomic characteristics and regional health system features. The findings indicate a positive association, particularly among less affluent individuals. In contrast, higher regional public spending is associated with lower levels of forgone care. Overall, the results do not provide empirical support for the view that greater private financing is linked to better access to public healthcare services. They also raise questions about policy interventions, such as tax incentives for voluntary health insurance, that promote private healthcare financing as a tool to improve the capacity of the public healthcare system to meet patients' needs.