Inpatient reimbursement system in Italy: How do tariffs relate to costs?

In 1995 the Italian National Health Service began to fund its hospitals on a per case basis, classified according to a DRGs system. Five out of 21 Italian regions developed a regional DRG tariff system, while the majority adopted the system set at national level. The article presents how tariffs are set by the national government and by the Lombardy Region. Production cost (mainly assessed according to a top-down, gross-costing approach) is only one of the variables used for setting tariffs. Microcosting is not used and, apparently, is not deemed as an appropriate methodology. After 10 years since their introduction national and regional tariffs are still not derived from explicit algorithms.