Giacomo Pignataro

Determinants of adaptation costs in procurement: an empirical estimation on Italian public works contracts

It is widely agreed that rules governing public procurement should be designed to achieve value for money. However, in the public works sector, ‘… the good being procured is usually complex and hard to be exactly specified ex ante, … [and] alterations to the original project might be needed after the contract is awarded. This may result in considerable discrepancies between the lowest winning bid and the actual costs that are incurred by the buyer’ (Bajari et al., 2006). There is now a wide body of literature focusing on cost escalation during the execution of contracts and their estimates reveal that it can be often quite large. This article is aimed at offering an empirical test of the determinants of adaptation costs in the public works procurement. Using a detailed data set on Italian public works contracts, we run an empirical analysis, grounded on the main conclusions reached in the literature, to test for the main drivers of adaptation costs.

The Political Economy of Rehabilitation: The case of the Benedettini Monastery

This chapter is aimed at exploring some aspects related to the issue of conservation, using as a case study the conservation of the Benedettini Monastery in Catania. Starting from this case, we will try to draw attention to general issues of political economy, such as the identification of the actors involved in decisions about conservation, the ways in which conservation can be carried out and the role of the consumers/users. Four questions will be addressed: (i) What should be conserved? (ii) Why do we conserve? (iii) Who should conserve? (iv) How should conservation be carried out?

The effects of reimbursement mechanisms on medical technology diffusion in the hospital sector in the Italian NHS

OBJECTIVES The aim of this study was to investigate how the differences across the regional reimbursement mechanisms and in particular the use of the DRGs impact on the level in the high technology equipment diffusion. METHODS Based on hospital sector data at a regional level we build up indicators to measure the regional diffusion of high technological medical equipment in the period 1997-2007. These indicators are regressed on regional healthcare characteristics to investigate the relationship between the different reimbursement systems offered by Italian regions and the level of high technological medical equipment. RESULTS Our results suggest that the per-case payment system is generally associated with a lower level of regional technology endowment per million of inhabitants, especially for the complex and expensive medical equipment. CONCLUSIONS Our findings cast some doubts that an effective regulation of reimbursement mechanisms cannot limit the excessive diffusion of medical equipment that is a relevant driver of the increase in expenditure.

Measuring the efficient management of public works contracts: A non-parametric approach

The efficiency of execution of public works contracts is usually defined in terms of the capacity to complete works within the costs and the time agreed on in the contract. Therefore, it has been traditionally measured considering either costs overruns or delays. Our purpose is to consider both measures simultaneously, so as to develop a measure of overall efficiency of public works contracts execution. We compute this measure, through a benchmark procedure, using a non-parametric approach (DEA - Data Envelopment Analysis). The analysis is carried out employing a detailed data set of Italian public contracts for roads and highways, in the period 2000- 2005.

Selezione dei fornitori e incentivi alla rinegoziazione in contratti incompleti: rilevanza empirica nel settore dei lavori pubblici

The literature on public procurement pays great attention to the rules underlying tendering procedures as well as on the specification of the type of contract to be awarded. Less attention has been paid to the incompleteness of the contract; this issue is relevant in the public work sector because it offers room for the contract renegotiation and, therefore, for the increase of the final price. This paper offers empirical evidence of the potential effects of different tendering procedures (i.e. negotiation vs auction) on the contract renegotiation in the public work sector. The results show that, in presence of incomplete contracts, an excessive emphasis on the tendering rules, in absence of an efficient system of sanctions and incentives, can induce firms to behave strategically: they will offer very low bids to be awarded the contract, looking for renegotiating during the contract implementation.

Readmission and Hospital Quality under Prospective Payment System

Nowadays different healthcare policies in OECD countries seem to consider hospital readmissions somehow “quality dependent”. Nonetheless, the theoretical literature on the incentives provided by payment systems tend to disregard this aspect, which indeed might be relevant in driving providers’ behaviour. In this paper we study the incentives for hospitals to provide quality and cost-reducing effort under different payment regimes, either a global budgeting or a prospective payment system, considering explicitly the role played by financial incentives directly linked to readmissions. As far as the specific results about quality are concerned, we find that prospective payment systems do not necessarily perform better than retrospective systems if the reimbursement to hospitals is not adjusted to take into account specific outcome-based indicators of quality, such as readmissions. More specifically, if patients readmitted are fully paid to hospitals, moving from a retrospective to a prospective payment systems might even induce a reduction on quality and, in turn, an increase in readmission probability. However, if the prospective payment system is adjusted for internalizing this counter-incentive, by a different payment for patients readmitted, it could be able to foster a higher treatment quality through the competition channel.

Linking the Price of Cancer Drug Treatments to Their Clinical Value

Background and ObjectiveAppropriate pricing of medications is one of the ultimate goals for decision makers, but reliable data on the risk/benefit ratio are often lacking when a Marketing Authorization Application is submitted. Here we propose a method to consistently evaluate price adequacy, which we applied to six anticancer medications approved in Italy in recent years.MethodsWe obtained ratios of cost per survival per day (cost/survival/day) by dividing the total costs of evaluated medications for the median survival gain in days. Each cost/survival/day corresponds to a crude score, with 0 assigned to a cost/survival/day ≥€586. The maximum price considered as adequate was €91 cost/survival/day (score 75) while a score of 100 corresponded to a cost/survival/day ≤€11, based on the thresholds set by the British National Health System (NHS) and the “willingness-to-pay” of the Italian NHS. Crude scores were then adjusted using correction factors for efficacy, safety, quality of life, and prevalence of disease.ResultsNone of the analyzed medications (abiraterone, afatinib, aflibercept, bevacizumab, dabrafenib, and ipilimumab) achieved a final score of 75, corresponding to adequate pricing. The final score for afatinib was the highest with 55 points. Prices of all the other drugs resulted in being inadequate, with negative final scores for bevacizumab, dabrafenib, and ipilimumab.ConclusionsThis method may be considered a tool for the evaluation of appropriateness of price proposed at negotiation and could represent a reliable resource for decision-making. Furthermore, this analysis suggests that most recently approved cancer drugs in Italy do not fulfill price adequacy.

Mediterranean symposium in thoracic surgery: opening lectures

Giacomo p ignataro, rector of the u niversity of Catania It is with great pleasure that I accepted to introduce this important symposium on lung metastasectomy. There are several reasons that I would like to address in this short introduction. In the era of global financial crisis in all Europe, including the universities, our response is to guarantee that the investments done are widely used to empower our next generation of researchers and, above all, to implement the benefits of patients in the healthcare system. Furthermore, the link between universities and medical companies will be of a paramount importance, in order to organize important meetings like this one, that could serve as a flywheel to invest in research projects. Academia in medicine is the balance between excellence in clinical service, education and research. If the mission of academic medical centers remains confused with the activities in support of the mission, academic medicine is in danger of perpetuating an inefficient system and ultimately a confusing set of goals.

Decentralization and Public Works Procurement in Italy

This paper focuses on the relationship between efficiency of infrastructure provision and the institutional characteristics of procurers. We study this relationship for the Italian public work procurement system characterized by a very large number of procurers mainly of small size. The efficiency is assessed as the capacity to execute the public work within the time and costs agreed in the contract. The empirical analysis is based on data drawn from a large sample of Italian public works for roads and highways and it is carried out with nonparametric frontier approaches. The determinants of efficiency are also investigated to assess whether the institutional characteristics of the contracting authority affect the efficient execution of the contracts. Our estimates show that local governments appear to be systematically less efficient in managing the execution process and, moreover, efficiency is decreasing in their size.

Is competition able to counteract the inefficiency of corruption? The case of Italian public works

The aim of this paper is to provide an empirical test of the role of competition in procurement in reducing the effects of corruption. For this purpose, the paper examines whether competition is able to constrain the waste effects of corruption on the efficiency of execution of public works, building on the results provided by Finocchiaro Castro et al. (2014). For this purpose, a two-stage analysis is carried out. In the first stage, a non-parametric approach (Data Envelopment Analysis - DEA) investigates the relative efficiency of each public work execution; in the second stage, the determinant factors of the variability of efficiency scores are investigated. Our results show that increasing competition reinforces the negative effects of environmental corruption on public works execution.