In the midst of our national debate about healthcare reform, people on both sides of the debate seem to pick and choose among the facts and myths about the nationalized healthcare available in a number of other countries. The fact is that every nationalized health care system in the world is battling issues of rapidly rising costs and decreasing access to care. But, these systems also have some very attractive benefits. So, let’s take a look at the pro’s and con’s of the Italian system.

Michael Tanner, the director of health and welfare studies at the Cato Institute, is the coauthor of Healthy Competition: What’s Holding Back Health Care and How to Free It and the author of this series:

While France may have the highest rated health care system in the world, Italy is second according to the WHO. The Italian health care system is a decentralized version of the British NHS. Despite the high rankings by the WHO, Italians are dissatisfied with the quality of their care. Italians believe more patient choice will improve quality, but “given the general dysfunction of the Italian political system, and the entrenched opposition of special interest groups, substantial reform is not likely anytime soon.”

Cost: Health care spending rose by 68% between 1995 and 2003.

Funding: Funding is based on a regressive payroll tax. The tax starts at 10.6% of income for the first €20,660 and drops to 4.6% of income between €20,51 and €77,480. The rest of the funding comes from federal and regional general taxation (i.e.: income and value-added taxes). The regions are responsible for health care provision. The Ministry of Health funds these regions according to a formula based on weighted capitation and past spending. Then the regions allocate these funds to Local Health Authorities (LHA).

Private Insurance: Private health insurance in Italy is uncommon, but is occasionally offered by employers. It is not possible to opt out of the National Health Insurance system and insurance premiums are not tax deductible. Many Italians do pay for private health care. It is estimated that about 35% of Italians use at least some private health services, but the public sector certainly dominates the private in terms if its relative importance.

Physician Compensation: Physicians are paid via capitation. Hopsitals are paid via DRGs.

Physician Choice: Italians have limited choice of their physician but more than in the UK or in Spain. They must register with a general practitioner (GP) in their LHA. For any specialist services, patients must get a referral from their GP.

Copayment/Deductibles: Inpatient and primary care are free. For tests, diagnostic procedures and prescription drugs, copayments are as high as 30%. However, 40% of the population (e.g.: the elderly, pregnant women, kids) are exempt from these copayments.

Technology: There is a shortage of medical technology in Italy. The U.S. has twice as may MRI units per million than Italy and 25% more CT scanners.

Waiting Times: Waiting times are fairly long for diagnostic tests. The average wait for a mammogram is 70 days, for endoscopy 74 days. Tanner notes that: “Ironically, the best-equipped hospitals in northern Italy have even longer waiting lists since they draw patients from the poorer southern regions as well.”