Public Funding and Development of Health Systems: Theory and Evidence from the Italian Health Service

This study investigates the relationship between public healthcare funding and healthcare infrastructure development in a universalistic (Beveridge-type) healthcare system. Focusing on Italy over the period 2000–2023, the analysis compares the public and accredited private healthcare sectors by examining annual changes in the number of hospitals and available beds, used as indicators of healthcare infrastructure capacity. A robust Seemingly Unrelated Regression (SUR) model is employed, together with a dummy variable capturing the effects of the COVID-19 pandemic. Given the observational nature of the data, the empirical analysis is intended to identify statistical associations rather than establish causal effects. The findings indicate that increases in public funding are positively associated with changes in the number of public hospitals, whereas no statistically significant relationship emerges between public funding and changes in the number of accredited private hospitals. These results suggest that public funding is more closely associated with healthcare infrastructure development in the public sector than in the accredited private sector. Furthermore, the COVID-19 pandemic is significantly associated with changes in public healthcare infrastructure, reflecting the exceptional pressures placed on healthcare systems during the emergency period. Although the estimated relationships should be interpreted as descriptive associations rather than causal effects, the findings provide evidence that public healthcare funding is systematically related to key indicators of healthcare infrastructure development within the Italian National Health Service. Overall, the results highlight the importance of examining not only the amount of public resources allocated to healthcare but also the mechanisms through which those resources are distributed and utilized. Strengthening monitoring and evaluation mechanisms may therefore contribute to improving the effectiveness, transparency, and accountability of public resource allocation across healthcare providers.