Cross-border flows of Italian patients within the European Union - An international trade approach

Italy is by far the major importer of health care services in the European Union. This paper uses concepts taken from international trade theory to analyse flows of Italian patients to other European Union member countries. The paper takes a typology in which international transactions in services are classified according to whether a transaction requires the movement of the consumers, of the producer or of neither and applies it to the trade in health services. The paper concentrates on the demand side of transactions and observes that a key feature in this trade is that the most common transaction involves the movement of the consumer to the location of the provider. An attempt is made to formalize a calculus which patients may be using in deciding whether or not to move for health care. Hoped-for improvements in the quality of care are set against the pecuniary and non-pecuniary costs which must be incurred to obtain these. The quite considerable volume of interregional transactions in health care services which takes place in Italy is examined in a first application of the calculus. This provides a basis for applying it to Italian transactions with other European health care systems. An important determinant of this trade seems to be differences in the reputations, real or imagined, between Italian providers of certain types of care and those in a number of other European Union countries. The paper concludes by examining some factors, including changes in the financing mechanisms, which may in the future influence the volume and nature of the trade in health services between Italy and the rest of the European Union.