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Austrian Health Academy

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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

The Austrian health system is characterised

  • by the federal structure of the country,
  • by the delegation of competences to the self-governing bodies and
  • by the cross-actor structures at federal and provincial level which are jointly responsible for planning, coordination and financing.

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

  • by the social security law,
  • by the laws on the basis of financial equalisation negotiations, as well as
  • by the agreements pursuant to Art. 15a of the Federal Constitution Act between the Federation and the provinces.

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].

Selected Literature

Gonenc R., Hofmarcher MM and A. Wörgötter. Reforming Austria’s highly regarded but costly health system, OECD Economics Department Working Paper, No. 895, September 2011


Hofmarcher, M. M. (2013). Austria: Health system review. Health Systems in Transition, 15(7), 1–291.


Hofmarcher MM, H. Oxely, E. Rusticelli (2007) Improved Health System Performance through better Care Coordination (together with Howard Oxley and Elena Rusticelli), OECD Working Paper, DELSA/HEA/WD/HWP(2007)/6


KPMG (2017): Through the looking glass: A practical path to improving healthcare through transparency, 133989-G, April


OECD/EU (2016), Health at a Glance: Europe 2016 – State of Health in the EU Cycle, OECD Publishing, Paris.


OECD 2017, State of Health in the EU: Österreich Länderprofil Gesundheit 2017


RH- Rechnungshof: Mittelflüsse im Gesundheitswesen“ (Reihe Bund 2017/10; Sbg 2017/1; Bgld 2017/ 2) 17. März 2017

LSE 2017: Efficiency Review of Austria’s Social Insurance and Healthcare System Volume 1 – International Comparisons and Policy Options, London School of Economics and Political Science (LSE Health). August 2017



  • the establishment of a model region (“responsibility and financing from a single source“).
  • scientifically based demand planning for integrated care.
  • documentation of working hours and payment systems in the model region.
  • to provide targeted information through newsletters and infographics on the health and economic consequences of fragmented control and financing structures.
  • to create models and toolboxes for the financing of integrated care.
  • improvement in supply, capture of financial flows, avoid wastage.
  • consistent consolidation of expenditure-task and financing responsibilities.
  • strategically oriented investments in digitisation and secure data traffic.