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Italy's Healthcare Sector Badly Needs Deregulation and More Private Spending

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Tags Bureaucracy and RegulationHealthPrice Controls


As of the week of April 1, there have been 11,591 fatalities due to COVID-19 reported in Italy. This is as the number of cases in the country has skyrocketed to 101,739. Of those affected, 29,761 have been hospitalized, 3,732 of whom are in an ICU. These numbers are only expected to climb, as experts fear a rapid rise in cases in southern Italy. This will only continue to cause strain on an already strained healthcare system with filling hospitals and rationing of care, a problem created by Italy’s disastrously planned healthcare system—a system that is to blame for such high casualties, with likely more to come.

Doctors in Italy have been expressing sentiments about this shortage for the entirety of the crisis. One doctor is pleading with the government and Italians to treat more patients at home to ease overcrowding in hospitals and the strain on the inadequate supply of healthcare workers, which have led to doctors and healthcare workers conceding to taking a "utilitarian approach" to treating patients. The Italian College of Anesthesia, Analgesia, Resuscitation and Intensive Care's (SIAARTI) guidelines outline that healthcare workers should not provide care to everyone, but ration it based on survivability, which has led doctors to make the tough choice of trying to treat all their patients or only those whom they are confident can survive, betraying the Hippocratic oath they took.

Most doctors have opted to follow the guidelines. The consequence has been a sharp increase in the number of deaths, particularly among the elderly, who are among those at the most risk of fatality. This has led even morgues to experience overcrowding and shortages in service. As well, a recent study found that 99 percent of these deaths were people with previously existing illness and conditions, likely pointing to the two factors that Italian doctors have been using to decide on "survivability."

Such discrimination and rationing of care is not exclusive to pandemics under Italy’s government-run healthcare system. Because prices are not used as signals for supply and demand, as in a market system, suppliers of healthcare cannot adequately meet demand for healthcare when it increases. Although Italy’s system is meant to be "universal" it fails to actually provide care due to the nature of the system and its underfunding and undersupply: it makes up only 6.8 percent of Italy’s GDP despite Italy’s population being one the most elderly in the world. This shows a clearly large demand, but very low supply to meet it.

Italy also suffers many of the problems that hold back our own healthcare system here in the US, namely government policy that hampers supply, keeping demand high but supply low. Medical devices in Italy must be registered with the government and deemed "necessary" to be built and operated by medical professionals. This is similar to "certificate of need" (CON) laws, which prevent new medical devices and facilities from being built and operated unless a “need” is proven. These laws are ripe for exploitation by political corruption, as medical providers fearing competition can encourage bureaucrats to determine that another facility is not needed if their specific area already has one.

This is a clear example of how government policies force Italy to ration its healthcare not only in crisis, but also during "normal" periods. It firmly places the blame for these likely otherwise avoidable deaths on Italy’s government.

The troubling news is that the US is at risk of facing a similar problem, as many of the same laws limiting supply in Italy exist here, such as the previously mentioned certificate of need laws. COVID-19 cases are expected to rise in the US, as experts predict that even seasonal flu facilities are expected to experience extreme stress from increased demand for services, with cases already at 163,539 (and deaths at 2,680) in the US.

If we are not to face a crisis and fatality rate similar to Italy's, the US must deal with what was responsible for the deaths in Italy: excessive government regulation that artificially keeps healthcare supply low even as demand continues to increase.


Peyton Gouzien

Peyton Gouzien is a Political Science Major with a Concentration in Law and institutions and a Minor in Law and Philosophy at the University of Albany. He has also contributed to the Libertarian Institute and worked at Young Americans for Liberty as a State Chair.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
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