WP 2018-06. Executive Summary.The diffusion of the welfare state has produced a widespread involvement of the public sector in financing the supply of private goods for paternalistic reasons. The parallel process of devolution has meant that decisions on expenditure and service organisation have often been assigned to local Governments tiers. In Italy, this has produced 21 separate health care systems responsible for funding, organizing and delivering health care services. The objective of the present paper it to investigate the consequences of fiscal federalism and patients’ mobility on hospital competition using data for the Lombardy Region, which in Italy has adopted a competition model for hospital care, where public and private hospitals coexist and patients can choose their preferred provider. In particular, we examine the effects of fiscal federalism on hospital competition by answering three unexplored research questions:
- -What are the driving forces of patients’ inflows?
- -Which are the strategies used by hospitals to attract patients from other regions?
- -Do public and private hospitals use different strategies to attract patients?
- -Are there opportunistic behaviours adopted towards extra-regional patients?
- -Does the inflow of extra-regional patients affect the quality offered to local residents?