14th Annual Meeting of the OECD Network on Fiscal Relations Across Levels of Government, 19-20 November 2018

1. THE IMPACT OF DECENTRALISATION ON THE
PERFORMANCE OF HEALTH CARE SYSTEMS:
INSIGHTS FROM NEW ANALYSES
Luca Lorenzoni and Alberto Marino
14th Annual Meeting of the Network on Fiscal Relations Across Levels of
Government, 19-20 November 2018

2. • To explore the impact of varying degrees of cross-country
administrative decentralisation on key health dimensions:
Aim of the analysis
Life
expectancy
Health
spending
Hospital
costs
Which policies increase value for money
in health care (Lorenzoni et al., 2018)
Understanding variations in hospital
costs (Lorenzoni and Marino, 2017)
Decentralisation component added to two
recent analyses:

3. • Index of decentralisation extracted from:
– OECD Survey on Health Systems Characteristics (2008)
– Joint survey of the Fiscal Network and Joint Network of SBO (2018)
• Degree of decentralisation (0-6) in the decision making process across 13
policies or service areas, based on the following classification:
• For the hospital costs analysis, countries were then classified, based on 2008
and 2018 responses, as either “low”, “high and decreasing” or “high and
increasing” decentralisation
Indicator of decentralisation
0 = Only central 3 = Both central and local 6 = Only local

4. Health spending, life expectancy and decentralisation
-0.5
-0.4
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
0.4
0.5
-1.5
-1
-0.5
0
0.5
1
1.5
0 1 2 3 4 5 6
Expenditure (left axis) Life expectancy (right axis)
Effect on expenditure Effect on life expectancy
Degree of decentralisation (6 = highest)
• A higher degree of decentralisation
reduces public health spending and
increases life expectancy
• “Excessive” decentralisation reverses
this effect, with significantly reduced
life expectancy and increased health
spending
• Results are fairly robust to the
introduction of decentralisation,
although there are concerns for
overfitting

5. 53%
lower
costs on
average
High
decreasing
Hospital costs
Mixed
effect
across
conditions
High
increasing
Compared
to low
decentralis
ation
Compared
to low
decentralis
ation
Higher
costs
across
conditions
High
increasing
Compared
to high and
decreasing
• The impact of decentralisation on hospital
cost is broadly consistent with findings from
health spending analysis
• Coefficients for other controls do not vary
significantly as decentralisation is
introduced
• Since the index is based on two data points
and a limited number of OECD countries
with data, some explanatory power is lost on
the hierarchical structure of the model

6. • Luca Lorenzoni (luca.lorenzoni@oecd.org)
• Alberto Marino (alberto.marino@oecd.org)
Thank you!