Financing

Financing

Responsibility and financing in one hand

A model region can show ways how care can be expanded in a patient-oriented manner and remains cost-effective. In a model region, the social security system, the provinces and the federal government work together more closely and in a coordinated manner to improve access and care especially for patients with chronic diseases. This improves quality and reduces the inefficiency caused by the mixed financing prevalent in Austria.

Unbalanced and fragmented: The Austrian health care system is financed by several institutions and bodies. The responsibility for expenditure, tasks and financing falls apart. This wastes money, which should be used more sensibly for the urgently needed improvement of care. A model region can show ways in which care can be expanded in a patient-oriented manner and remain cost-effective.

Financial flows of the Austrian health care system

Source: Hofmarcher, Maria M., Health systems in transition

The Austrian health system is characterised

The Federal Constitution stipulates that almost all areas of the health system are primarily the responsibility of the federal government. This does not apply to hospitals. Although the federal government lays down the principles, the federal states are responsible for implementing legislation and enforcement. The social insurance system is essentially responsible for outpatient GP and specialist care, while the Länder are responsible for hospitals (“secondary care“ and “tertiary care“).
At the federal level, the provision and financing of social and health services are regulated

The federal states are obliged to provide sufficient inpatient treatment capacities. They do this within the framework of the federal regulations and in cooperation with the social insurance funds. State health platforms and target control structures are to further develop the health care system across sectors. However, this is not happening sufficiently at present.

In the outpatient sector, but also in the areas of rehabilitation and pharmaceuticals, health insurance institutions or the main association of Austrian social insurance negotiate with the chambers (doctors and pharmacists), the legal representatives of midwives or the professional associations of other health professions. These self-governing structures organise and finance the provision of services independently within the legal framework. Establishment plans regulate the number and local distribution of contract physicians and contract group practices.

All concerns of the public health service are generally coordinated and monitored at federal level (e.g.ensuring and improving the state of health of the population, supraregional crisis management, vaccination). Many of these tasks are delegated to the provinces and municipalities, but also to the social insurance system, within the framework of the indirect federal administration. In Austria there is a positive list of medicinal products, the so-called reimbursement code (EKO), which lists approved, reimbursable and securely available medicinal products.

Complex, non-transparent, expensive

The health care system provides good access to care, but i s very complex [RH 2017, OECD 2017, LSE 2017] and non-transparent [KPMG 2017]. The costs of the health care system in Austria are high [OECD/EU 2016]. Both in absolute figures and as a percentage of GDP, they are above the EU15 average. This makes it all the more important that the number of healthy life years in Austria is still well below the EU average. International and national studies show that the efficiency of the Austrian healthcare system could be improved [Hofmarcher 2013, Gonenc et al 2011]. 

A major cause of the inefficiency of the Austrian health care sys tem is the fragmentation of responsibilities and funding. The multitude of different payment systems in the individual sectors contributes to the imbalances in health care. 

All health policy actors are aware that the effects of fragmentation in responsibilities often affect quality and access for people. Over the past 20 years, for example, models of better interface management have been tried out. Great hopes were placed in “Reform Pool“ projects, but these were often not sustainably developed and underfunded. In the meantime, discharge management has established itself in many hospitals – also as a result of these projects. However, these structures are only partial solutions. 

The 2013 health reform has gone a step further in strengthening cooperation between actors. At the same time, however, a new administrative universe was created that still does not ensure that planning and financing of care is suffienctly coordinated. 

In “Financing – responsibility and financing in one hand“, social insurance and the Länder work more closely and in a coordinated manner together with strong support from the federal government. This must also include nursing care. This can improve access an d better integrate care, especially for the chronical ill. Moreover, international studies show that the integration of administrative levels and responsibilities is cost-reducing and that inefficiency is alleviated. [Hofmarcher et al 2007].