Eugenio Anessi-Pessina

ACCOUNTING REFORMS: DETERMINANTS OF LOCAL GOVERNMENTS' CHOICES

The introduction of accrual accounting in Italian Local Governments has been mandated in a way that permits, and in fact encourages, a merely formal compliance. Local Governments must produce accrual-based financial statements, but double-entry bookkeeping is not mandatory, nor may traditional budgetary accounting be abandoned. Why, then, should they bother to introduce an integrated system of budgetary and accrual accounting? In this paper, we empirically investigate the determinants of Local Governments choices of accounting innovation. According to our results, rational elements such as complexity, types of activities performed, presence of surpluses, and access to capital markets are seemingly unhelpful in explaining why a Local Government decides to introduce accrual accounting. What counts are institutional and cultural explanations, such as the perceptions of CFOs and the North-South divide.

Diffusion of medical technology: The role of financing

In the last decade the pace of innovation in medical technology has accelerated: hence the need to better identify and understand the real forces behind the adoption and diffusion of medical technology innovations in clinical practice. Among these forces, financial incentives may be expected to play a major role. The purpose of this paper was to assess the influence of financing mechanisms for new medical devices and correlated procedures on their diffusion. The analysis was carried out in the Italian inpatient cardiovascular area and applied to drug eluting stents over the period 2003-07. The papers main hypothesis, that higher levels of reimbursement encourage technology diffusion, was rejected. So was the hypothesis that private hospitals may be more sensitive to tariff levels than public hospitals. A statistically significant difference was found only between hospitals that are funded on a Diagnosis-Related Groups (DRGs) basis and those that are not, with the former showing higher levels of technology diffusion. These results warn policy makers against excessive reliance on specific reimbursement fee changes as a way of steering provider behaviour.

Phasing Out Market Mechanisms in the Italian National Health Service

The Italian National Health Service introduced quad-markets, regionalization, and managerialism in the 1990s. Under quasi-markets, large providers have been separated from purchasers and funded by ‘activity’—the quantity, mix, and possibly appropriateness of services provided. Under regionalization, each of Italys 21 regional governments is able to design its own funding arrangements. The regions have generally been trying to mitigate the effects of quasi-markets and are now increasingly ‘governing’ them. The system is producing some desirable results, including a shift from ordinary to same-day hospitalizations and a reduction in length of stay. Hospital admissions increased initially, but only where the regions encouraged this. Financial effects are more controversial.

Public sector budgeting: a European review of accounting and public management journals

Purpose - – Budgeting is central in public organizations. From a research viewpoint, it is an extremely multifaceted and potentially rich field to investigate and develop. The changing institutional and socio-economic landscape, moreover, requires a profound reassessment of its roles and features in accounting studies. The purpose of this paper is to review the existing European literature on public budgeting, looking at how public administration, public management, and accounting contribute to current budgeting theories and practices and to advance a proposal on how they can individually and jointly contribute in the future. Design/methodology/approach - – The authors collect and analyze all the papers on public budgeting in the European context that were published in all the issues of 15 major accounting and public-management journals since 1980. Findings - – Budgeting has so far played a rather marginal role in European public management and accounting research. Among the existing papers, most focus on the Anglo-Saxon context, look at the intra-organizational aspects of budgeting, emphasize its managerial and allocative functions, either adopt an interpretive theoretical framework or make no explicit reference to theory, and rely on qualitative analyses. Public budgeting lies at the intersections between different disciplines and professions, but this multifacetedness has been largely neglected by the existing literature. These intersections thus offer significant opportunities for future research. Building on the distinction between the intra- and inter-organizational foci of budgeting, between its different functions (i.e. allocative, managerial, external accountability), and between the accounting and the public administration and management perspectives, the authors propose possible future research topics. Originality/value - – Budgeting plays a central role in public organizations and is used to allocate a large share of national incomes. This paper explores the existing literature and puts forward some potentially fruitful avenues for future research.

Management accounting use and financial performance in public health-care organisations: Evidence from the Italian National Health Service

Reforms of the public health-care sector have emphasised the role of management accounting (MA). However, there is little systematic evidence on its use and benefits. To fill this gap, we propose a contingency-based model which addresses three related issues, that is, whether: (i) MA use is influenced by contextual variables and MA design; (ii) top-management satisfaction with MA mediates the relationship between MA design and MA use; and (iii) financial performance is influenced by MA use. A questionnaire was mailed out to all Italian public health-care organisations. Structural equation modelling was performed to validate the research hypotheses. The response rate was 49%. Our findings suggest that: (i) cost-containment strategies encourage more sophisticated MA designs; (ii) MA use is directly and indirectly influenced by contingency, organisational, and behavioural variables; (iii) a weakly significant positive relationship exists between MA use and financial performance. These findings are relevant from the viewpoint of both top managers and policymakers. The former must make sure that MA is not only technically advanced, but also properly understood and appreciated by users. The latter need to be aware that MA may improve performance in ways and along dimensions that may not fully translate into better financial results.

Multiple logics and accounting mutations in the Italian National Health Service

Abstract Traditional public administration (PA) relied on cash- or commitment-based budgets, while NPM advocated accruals accounting. Currently, Continental Europe is witnessing the re-emergence of the PA logic, but the relevant accounting implications have been insufficiently investigated. We focus on the Italian National Health Service. Our findings suggest that accruals accounting will not be repealed. However, accounting mutations will be introduced to increase consistency with the PA logic and budgetary accounting. Accruals accounting numbers will be interpreted and used accordingly. Great attention will be paid to nation-wide consolidated statements for the control of public finances, while faithful representation of individual organisations will be overshadowed.

Biased Budgeting in the Public Sector: Evidence from Italian Local Governments

Abstract The purpose of this paper is to analyse, in terms of presence, determinants and purposes, the misrepresentation of expected revenues during budget formulation and the misrepresentation of actual revenues during budget execution. To this end, we use six-year panel data from Italian municipalities with populations above 15,000. Our results suggest that overestimations of current revenues are more frequent than underestimations, during both budget formulation and budget execution. In terms of determinants, our results highlight the impact on revenue misrepresentation of both political orientation and fiscal stress. Finally, in terms of purposes, we show that revenue underestimation during budget formulation and revenue overestimation during budget execution may contribute to the formation of surpluses. The former, in particular, may allow mayors to create a ‘war chest’ in non-election years, which can then be used to increase net borrowing on the eve of elections.

Quality improvement strategies and tools: A comparative analysis between Italy and the United States:

Italian and American hospitals, in two different periods, have been urged by external circumstances to extensively redesign their quality improvement strategies. This paper, through the use of a survey administered to chief quality officers in both countries, aims to identify commonalities and differences between the two systems and to understand which approaches are effective in improving quality of care. In both countries chief quality officers report quality improvement has become a strategic priority, clinical governance approaches, and tools—such as disease-specific quality improvement projects and clinical pathways—are commonly used, and there is widespread awareness that clinical decision making must be supported by protocols and guidelines. Furthermore, the study clearly outlines the critical importance of adopting a system-wide approach to quality improvement. To this extent Italy seems lagging behind compared to US in fact: (i) responsibilities for different dimensions of quality are spread across different organizational units; (ii) quality improvement strategies do not typically involve administrative staff; and (iii) quality performance measures are not disseminated widely within the organization but are reported primarily to top management. On the other hand, in Italy chief quality officers perceive that the typical hospital organizational structure, which is based on clinical directories, allows better coordination between clinical specialties than in the United States. In both countries, the results of the study show that it is not the single methodology/model that makes the difference but how the different quality improvement strategies and tools interact to each other and how they are coherently embedded with the overall organizational strategy.