Budgeting and performance management in the Italian National Health System (INHS) : Assessment and constructive criticism

Purpose – The aim of the paper is to trace the history and development of performance measurement and management systems in the Italian National Health System (INHS), to identify their key characteristics, and to provide a critical assessment of their implementation. Design/methodology/approach – A combination of literature review, action‐research and fieldwork conducted over a ten‐year period in several Italian health care organizations. Findings – Performance management has grown considerably in the INHS over the last 15 years. Explanations for this growth include normative, coercive and mimetic isomorphism, the introduction of quasi‐markets, the adoption of DRGs, an increased focus on clinical governance and innovative practices in human resource management. Research limitations/implications – The paper shows how performance management has been implemented in the INHS and why it can still be considered a “work in progress”. Practical implications – The introduction of performance management systems has stimulated greater accountability and promoted a more cost conscious culture in healthcare organizations. Nevertheless, there are many problems that remain to be solved if performance management arrangements are to deliver the desired improvements in performance. Originality/value – The paper advocates the need for reduced isolationism and increased international comparison with concomitant evaluative effort.