Process of medical malpractice risk allocation in the Italian public health systems

This paper is aimed at analysing the key issues of the process of medical malpractice risk allocation in the Italian public health system. We introduce the function of liability insurance and we discuss also the problems related to optimal coverage design. We then turn to the empirical section thanks to a large database which includes all the information contained in 308 tender notices concerning the acquisition of RCT/O coverage by the Italian local public health firms between 2003 and 2006. The analysis of the data collected provides a first assessment of i) the ability of the Italian public sector to find risk coverage on the private insurance market, ii) the dynamics of prices and market power of insurance firms, and iii) the role of insurance brokers. We propose two alternative scenarios which explain the proposed empirical evidence.