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Decentralisation of healthcare reduces inequality and fosters innovation

  • The Barcelona Institute of Economics (IEB) analyses how decentralising policies affect the quality and the development of public health services in the latest edition of the IEB Report


Decentralisation of healthcare system significantly reduces inequalities in the provision of service between communities. This is one of the main conclusions from the latest IEB Report entitled: “Health Economics: Service Provision in Decentralised Healthcare Systems”, coordinated by IEB Researcher, Judit Vall, which analyses the impact of these decentralised policies on service efficiency, the equality in its provision and economic growth.

In his contribution, Joan Costa, researcher from the London School of Economics, analyses the reasons why decentralisation would help reduce inequality in the provision of healthcare services between communities. He finds that: “Devolution has helped to address regional preferences in healthcare, according to the differing needs of each community”. Costa cites the case of the United Kingdom as an example, where Scotland has carried out innovative policies responding to the intrinsic needs of communities, such as eliminating prescription charges or free long-term care.

It is precisely this ability to adapt healthcare service to regional needs which generates a second impact, such as the promotion of innovation. “Regional health services become laboratories of health policy innovation and diffusion”, explains Costa, and puts as examples the cases of the Basque Country, Navarra, and Catalonia that have implemented new dental care for children and shared coordination between health and social care. “Decentralisation also leads to an emulation effect of successful innovative policies, and subsequently to the spread of such reforms to the rest of the country later on, hence reducing regional inequality”.

The quality of regional governments as a distorting factor
Gilberto Turati, researcher from the Università Cattolica del Sacro Cuore, finds that decentralised healthcare systems may generate reductions in inequality, although the effect may be nuanced. “In Spain, furthering the process of decentralisation from 2002 resulted in a marginal increase in spending inequality for health service between communities; but this was coupled with a decrease in inequality related to service quality, likely because autonomous governments have better knowledge of local needs, thus resources are spent on projects suitable for their citizens”.

However, Turati delinks this reduction of inequality in the provision of service with a total equalisation of outcomes. “Decentralised systems may reveal existence of large differences in the quality of local governments, which can translate into unequal healthcare outcomes”.

Despite acknowledging that “the quality of the autonomous governments matters in the generation of inequalities”, Turati rejects that centralising services would be the solution. “In Italy, functions such as provision of education are handled at the central level and yet there are big differences in outcomes between territories”

Chartered regions, in an advantageous situation
Experts agree that chartered (foral) regions with autonomy not only politically, but also fiscally, considerably improve their health services outcomes. In Spain, it is the chartered regions which present very favourable key indicator statistics.

Researchers Dolores Jiménez (Universidad de Granada) and Pilar García (Erasmus University) indicate how these regions have significantly reduced infant and neonatal mortality with the decentralisation of service. In particular, number of deaths of children under one year of age has fallen by 1.1 per 1,000 live births. “One of the explanations for these results is that these regions have greater autonomy when it comes to increasing health resources, such as the number of doctors available per 100,000 inhabitants”.

In their article, the researchers also emphasize that chartered regions have been pioneers in implementing innovative health measures linked to infant and neonatal mortality, or the extension of coverage to the entire population, including children, immigrants, and people with limited resources.

In conclusion, the coordinator of this IEB Report, Judit Vall, highlights that “there is evidence of improvements in some areas of healthcare provision for the case of decentralisation”, while recognising that there is a need for “more research in order to derive more generalizable conclusions”.