This study investigates the impact of fiscal decentralization on health management at the municipal level, particularly during health emergencies. Using Bolivian municipalities as a case study, the research employs a quasi-experimental design incorporating instrumental variable (IV) models and Spatial Durbin Error Model (SDEM) regressions to analyze the effects of fiscal autonomy on health outcomes. The main finding is that increased fiscal autonomy significantly enhances health management, as evidenced by a higher detection rate of covid cases. This improvement is linked to better resource management and increased health expenditure in municipalities with greater fiscal autonomy. Additionally, the study reveals positive spillover effects on neighboring municipalities. These results underscore the importance of decentralization and fiscal autonomy in improving the ability of local governments to respond to health crises. This research provides valuable insights for policymakers aiming to design more effective decentralization policies that enhance public health management.