HiT summary: Austria, 2006 HiT summary Fig. Health care expenditure as a percentage of GDP in Austria, selected countries and EU average, 2004, WHO estimates Sources: European Health for All database, June 2006; Austria: Statistik Austria, February 2006. Health Systems in Transition European Observatory on Health Systems and Policies WHO Regional Office for Europe Scherfigsvej 8 DK-200 Copenhagen Denmark Telephone: +45 39 7 7 7 Fax: +45 39 7 8 8 E-mail: info@obs.euro.who.int www.euro.who.int/observatory European Observatory on Health Systems and Policies Austria Czech Republic France Germany Hungary (2002) EU average Austria 0 5 10 15 Introduction Government and political background Austria is a democratic republic and a federal state which is composed of nine states (Länder). The Länder have their legislative competencies and also participate in legislation at federal level in the Bundesrat (Upper House of Parliament). The Länder are subdivided into political districts (administrative units), which themselves are made up of local communities. As self-governing bodies, local communities have their own sphere of activity and carry out their financial affairs independently. Population Approximately 68% of the 8.1 million inhabitants lived in towns and cities in 2003. Since 1990, the population has grown by an average of 5% per year, which is above the average of the 25 countries which have been Member States of the European Union (EU) since May 2004. From 1990 to 2004, the proportion of those under the age of 15 fell from 17.4% to 16.2% of the population, whereas the proportion of those over 65 years rose from 14.9% to 15.7%. A further increase in the number of elderly people is expected in the coming decades. Mean life expectancy From 1990 to 2004, life expectancy at birth rose from an average of 76 years to 79.5 years and was thus above the EU average and that of the 15 countries that were already EU Member States before May 2004. In the same period, the mean life expectancy of women rose from 79.1 years to 82.2 years; that of men rose from 72.5 to 76.5 years. Main causes of death Since 1990, almost all the indicators of morbidity, mortality and environment and lifestyle-related health risks have improved significantly. From 1990 to 2004, the age-standardized death rate fell from 8.1 to 6.2 per 1000 inhabitants, whereby a 2HiT summary: Austria, 2006 decrease of almost all types of illnesses could be observed. In 2004, it was below the average of the 15 countries that were already EU Member States before May 2004, in particular owing to a low mortality rate for cancer. However, mortality due to suicide and alcohol-related diseases was still disproportionately high in spite of a significant decrease. The recent history of the health care system Since the nationwide introduction of statutory mandatory health and accident insurance in 1887/1888, the proportion of insured people has steadily increased and now includes 97.6% of the population. The health care system has been characterized by significant increases in expenditure since around 1980. Since 1978, the Federal Government and the nine Länder have been concluding limited-period agreements on hospital financing according to Federal Constitution Article 15a. Since 2005, these agreements have also referred to the planning of other areas of health care provision and cross- sector financing approaches. Reform trends Health reforms have primarily dealt with cost- containment (by exploiting potential for more efficiency and increasing cost-sharing) and with structural reforms to improve the planning of capacities, the cooperation of stakeholders and the coordination of financing flows. Revenue has been continuously increased while maintaining the existing forms of financing. In the acute care sector, organizational tasks have been partly privatized. The reimbursement of services and medicines has been more strongly linked to health technology assessment. At the same time, new services (long-term care benefit, psychotherapy, prevention) and new structures for long-term care closer to patients’ homes have been introduced. Contribution revenue has been increased and the contribution rates of some groups of the insured brought into line, but the revenue base has not been fundamentally changed. Quality assurance requirements have been raised and patients’ rights have been strengthened by a charter and patients’ ombudspersons. Health care expenditure and GDP Austria spent 9.6% of its gross domestic product (GDP) on health care in 2004 (Fig. 1), ranking above the EU average and that of the 15 Member States belonging to the EU before May 2004. Overview The Austrian health care system is characterized by the federalist structure of the country, the delegation of competencies to stakeholders in the social insurance system as well as by cross- stakeholder structures at federal and Länder levels which possess competencies in cooperative planning, coordination and financing. There has traditionally been regulated competition between service providers for patients and contracts with the social insurance institutions, but not between the health insurance funds themselves. The sectors of the health care system have customarily been characterized by different stakeholders and regulation and financing mechanisms. However, in recent years there have been increased efforts to introduce decision-making and financing flows which are effective across all sectors. Organizational structure and management Structure of the health care system The Nationalrat (Lower House of Parliament), the Bundesrat (Upper House) and the Federal Ministry of Health and Women are the bodies primarily responsible for legislation in the health care system. The Ministry supervises the nationally active stakeholders in the social insurance system. It is partly supported in the execution of its statutory tasks (e.g. product safety, protection against infections, health 3HiT summary: Austria, 2006 professions) by subordinate authorities such as the Austrian Health Institute and the Federal Office for Safety in the Health Care System (since 2006 the successor to the Federal Office for Medicines). Other ministries are also involved in parts of the health care system. For example, through its role in the financial adjustment process between the Government and the Länder, the Ministry of Finance is involved in decisions on the distribution of value-added tax (VAT) revenue. According to federal framework laws and Länder laws, the nine Länder are responsible for the provision of hospitals and long-term care institutions and for maintaining their infrastructure. These tasks are partly delegated to local authorities. They are also responsible for the public health service, training institutions for non-academic health professions, the award of long-term care benefit and the ambulance service. Länder governments also supervise the regional physicians’ chambers and regional health insurance funds. The 21 social insurance institutions are organized in the Federation of Austrian Social Insurance Institutions together with five other social insurance institutions (for accident and pension insurance). The Federation coordinates, among other things, the administrative activities of the social insurance institutions (for example by means of model statutes). It also has the task of drawing up binding directives and concludes, after the health insurance funds’ approval, general agreements at Länder level with the interest groups of outpatient service providers. Membership of the relevant regional physicians’ chambers is mandatory for all physicians. The chambers are organized in a holding; the Austrian Chamber of Physicians. As self-governing public bodies, the regional physicians’ chambers are responsible for quality assurance and further and continuing education and training, and negotiate general agreements with the Federation for the provision of outpatient care by contracted physicians. The Austrian Pharmacists’ Association is the statutory representative body of pharmacists who work in public pharmacies or in hospitals. It is based on mandatory membership, and as a public body it takes on sovereign tasks. All practising midwives are members of the Austrian Midwives’ Committee. Other health professions are organized in professional associations with voluntary membership, some of which are authorized to conclude collective agreements. Caritas (a catholic welfare organization), Diakonie (a protestant welfare organization), the Red Cross, Volkshilfe and the Austrian Hilfswerk are organized in the Federal Working Group Free Welfare. The Association of Pharmaceutical Companies has 109 members. In 2000, the Austrian Generic Drugs Association was founded. The seven private health insurance funds are organized in the Association of Insurance Companies. There are currently well over 1000 self-help groups in the health and social sectors, some of which are organized in umbrella organizations. Alongside the individual players, cross- stakeholder cooperative committees – and this is characteristic for the Austrian health care system – are increasingly being established at federal and Länder levels in order to better coordinate planning, regulation and financing flows, and to be able to intensify needs orientation and efficiency. Planning, regulation and management The distribution of responsibilities in legislature and implementation between the Federal Government, the Länder, local communities and social insurance is set out in the Federal Constitution Act and is regulated in more detail and in some cases elaborated in implementing laws at Länder level. Since 1956, the General Social Insurance Act has governed social health, accident and pension insurance for employees and acts as a reference law for the social insurance of the self-employed and other occupational groups. The Federal Government has delegated 4HiT summary: Austria, 2006 competencies in the field of implementation to self-governing stakeholders in the social insurance system, particularly for outpatient services, the reimbursement and prescription of medicines and therapeutic aids, rehabilitation and cash benefits. After obtaining the approval of the relevant health insurance funds, the Federation of Social Insurance Institutions concludes general agreements for the provision of outpatient services with the following bodies: the regional physicians’ chambers, the Austrian Pharmacists’ Association, the Austrian Midwives’ Committee, the professional associations of other health workers which are entitled to conclude collective agreements, and the guilds of skilled tradespeople in the health sector. The general agreements regulate service amounts, fees and quality requirements. The regional physicians’ chambers addi- tionally negotiate a capacity plan (“location plan”) with the Federation of Social Insurance Institutions for outpatient care provision by contracted physicians, on the basis of which the health insurance funds selectively award individual contracts to a proportion of physicians in private practice. The remaining physicians in private practice do not have contracts with any health insurance fund. The cost of their services, however, can be partially reimbursed (80% of the fee usually charged by a contracted physician) by the funds upon application by the insured. For services provided by other health profes- sionals, the general agreements are valid for all people practising the respective profession; any fee demands which go beyond the negotiated “market price” have to be paid by the patients themselves. As part of the negotiations on financial adjustment, the Federal Government and the nine Länder governments have concluded a special agreement (according to Federal Constitution Act Article 15a) on the organization and financing of the health care system for every legislative period since 1978. As a binding state treaty, this is published in the Federal Law Gazette. Health reform laws are often the result of these agreements between the Federal Government and the Länder. Until 2004, these agreements primarily affected acute inpatient care, which since 1999 has also included cross-sector planning for psychiatric care and major equipment in the inpatient and outpatient sectors. This was set out in the Austrian Hospitals and Major Equipment Plan for the whole country, representing a binding basis for capacity planning and financing flows at Länder level. According to the 2005 Health Reform, this plan would be replaced from 2006 by the cross-sector Austrian Structural Plan for Health, with a time horizon reaching to 2010; the relevant negotiations, however, have not yet been completed. The new plan not only refers to acute inpatient, psychiatric and high-technology care, but also to the outpatient, day-care and rehabilitation sectors, to interfaces to long-term care and to prevention and health promotion. It is being developed by the Federal Health Agency (the successor to the Structural Fund since 2005), which should additionally draw up nationwide cross-sector quality specifications and reimbursement incentives as well as guidelines for the financial support of shifts in services between inpatient and outpatient care (by means of a so- called reform pool). The Federal Health Agency is managed by the Federal Health Commission (the successor to the Structural Commission since 2005), which is advised by the Federal Health Conference, in which the most important stakeholders in the health sector are represented; the Federal Government holds a majority. The detailed planning and implementation of the Austrian Structural Plan for Health at Länder level is to be carried out by the nine Health Platforms, in which the most important players in the Länder (including patients’ representatives) are represented. They are responsible for the State Health Funds (successors to the State Funds since 2005), in which the budgeted funding of the Federal Government, the Länder, local authorities 5HiT summary: Austria, 2006 and social health insurance funds are pooled. This funding serves to finance acute inpatient care in public hospitals (fund hospitals) as well as the intersectoral reform pools. Patients’ rights are stipulated in numerous laws, and were summarized in the Patients’ Charter agreed upon by the Federal Government and the Länder in 1999. In the meantime, patients’ ombudsmen’s offices have been embodied in regional laws in all the Länder. They provide information and advice, follow up complaints and can award compensation payments if necessary. Decentralization The Austrian health care system is traditionally characterized by decentralized structures as set out in the Federal Constitution, particularly the delegation of competencies to the Länder within the framework of federalism and the delegation of tasks to self-governing bodies in the social insurance system. Interlocking federalism at both legislative and executive levels requires a high level of joint decision-making between the Federal Government and the Länder (and local authorities), whereby there is a clear hierarchy in which the Federal Government takes precedence over the Länder. In recent decades, the Federal Government has increasingly exercised a controlling influence on the public health system. This has led to the creation of mainly cross-stakeholder cooperative bodies and funds at federal and Länder levels. Since 2002, all the Länder (except Vienna) and many private non-profit-making owners have handed over the operation of their hospitals to companies organized according to private law. However, the (majority) owners usually act as a guarantor. These hospital operating companies are now hospital service providers, with the State Health Funds as their clients or purchasers of their services. The Austrian health care system has thus developed almost completely into a supply model which is based on decentralized contracts with service providers. Health care financing and expenditure Main source of financing: statutory health insurance The financing of the health care system is pluralistic in accordance with the Federal Constitution and social insurance laws. The social health insurance system, which is the most important source of financing, provided a total of 45.3% of total health care funding in 2004. In 2004, almost 98% of the population was covered by statutory health insurance, and the majority of the remaining inhabitants receive health care services via regional bodies (recipients of social assistance, asylum seekers, prisoners, etc.). Mandatory insurance is based on membership of an occupational group or place of residence; there is thus no competition between health insurance funds. It applies to almost all employees and the self-employed as well as pensioners, the unemployed and students in employment. Employees on low incomes can opt for voluntary insurance. Some self-employed professionals can choose not to have mandatory social insurance, since 2000. Children, household members who need a high level of care and spouses and partners who are not employed and look after children are co-insured free of charge. Other household members who are not in employment pay a reduced contribution, since 2002. Contributions are not dependent on the state of health or the risk of expenditure of the insured person or her/his dependants, but are proportionate to the person’s earnings – up to a ceiling on insurable earnings. The contribution rates are set annually by the Nationalrat. In 2005, they amounted to between 7.1% and 9.1% of the contribution base depending on the health insurance fund, whereby a respective ceiling on insurable earnings of €3630 and €4235 was set. Employees pay around half of the contribution amount; the other half is paid by their employer. The contributions are collected and administered HiT summary: Austria, 2006 by the health insurance funds themselves. Services are financed according to a pay-as-you- go principle. Since the mid-1980s at the latest, a gap started to develop between contribution revenue and the spending of the health insurance funds. In 2004, the health insurance funds together had a deficit of €253 million. The balances of the regional health insurance funds varied between levels of –6.6% and +0.4% of revenue; the nationally active funds usually have a surplus. Deficits can be balanced via a compensation fund established at the Federation of Austrian Social Insurance Institutions. In recent years, however, repeated reform measures have been necessary in order to compensate for deficits of social health insurance funds. Health care benefits and rationing In case of need, all those insured within the social health insurance system have a legal entitlement to benefits in kind and cash benefits within the framework of the specified range of services. The range of services is broad and includes outpatient medical treatment, dental treatment (without fixed dentures), psychotherapy, physiotherapy, ergotherapy and speech therapy, medicines and therapeutic aids, medical nursing care and rehabilitation as well as hospital treatment and stays at spas. In terms of cash benefits, social health insurance finances sick pay and maternity benefits. Legislative decisions on the social health insurance funds’ obligation to provide services are prepared in the discussions of the Supreme Health Board and the Länder health officers. Recommendations are, however, not binding for political decision-makers. Alongside the statutory obligatory services, health insurance funds also offer additional services or exemptions from cost- sharing according to their statutes. Waiting times for medical treatment are rarely discussed in public and can be viewed as short in comparison to other countries, although there has been no precise evaluation of this. Complementary sources of financing Taxes In 2004, 25% of health expenditure was borne by the Federal Government, the Länder and local authorities; of this, approximately 10% was accounted for by long-term nursing care. Private households In 2004, approximately 25% of health care expenditure was financed privately. Private households bore 13.5% of health care expenditure by means of indirect cost-sharing (services whose costs were fully borne by the insured) and 7.6% by means of direct cost-sharing (co-payments). In addition, 2.4% was financed by private insurance premiums, 1.4% by private non-profit-making organizations and 0.2% by employers (for the services of company physicians). In 2004, 53% of indirect cost-sharing was accounted for by hospitals (mainly as private health insurance) and 30% by dental treatment. Direct cost-sharing has increased in recent years and affects almost every service provided by social health insurance; however, the outpatient clinics fee introduced in 2001 was withdrawn again in 2005 owing to the high costs involved in its implementation and the considerable resistance it had encountered. A large part of direct cost-sharing (47%) in 2004 was accounted for by the services of non-contracted physicians, prescription fees (19%) and therapeutic products (18%). Certain people in need of social protection and the chronically ill are exempted from the prescription fee. In addition, health insurance funds issue their own guidelines on exemptions in other service areas. A total of approximately 900 000 people or about 12% of the Austrian population are exempted from direct cost- sharing. Private health insurance Private health insurance financed approximately 10% of health expenditure in 2004, mainly in 7HiT summary: Austria, 2006 the form of supplementary private insurance policies. The insurance companies’ tariffs are risk-dependent and vary according to the Land in question. Their expenditure was predominantly related (82%) to inpatient care (mainly for more comfortable rooms and hospital per-diem fees), but also for outpatient care by non- contracted physicians (10%). Around a third of the population has private health insurance in addition to social health insurance. Health care expenditure In 2004, Austria spent approximately €23 billion on health care. This corresponded to 9.6% of its GDP (see Fig. 1). Without taking the expenditure for long-term care into consideration, which accounted for approximately 10% of total health care expenditure, the proportion was 8.7%. Owing to the current data revision (in accordance with the System of Health Accounts of the Organisation for Economic Co-operation and Development (OECD)), health care expenditure no longer appears to be below average in comparison with the countries belonging to the EU before May 2004, but rather above average. When the public share of health care expenditure is considered, Austria is in the lower third of all EU countries, with approximately 70%. The proportion would be in the region of 73% if investments in so-called fund hospitals (public hospitals including private non-profit-making hospitals) were counted as public expenditure. Between 1995 and 2004, the proportion of total expenditure on hospitals, medicines and therapeutic aids rose, whereas the proportion of total expenditure on outpatient and nursing care services fell. Health care delivery The public health service, prevention and health promotion The public health service is the responsibility of the Länder, which decentralize most of the relevant tasks to district administrations or to local authorities. It is in charge of health reporting, the prevention of epidemics and protection against infections, the supervisory activities of health inspectors and environmental medicine. In addition, the public health service is responsible for vaccinations (whereby the vaccines are partly financed by the health insurance funds). Within the EU, however, Austria has at 73.5% one of the lowest immunization rates against measles among infants. The measures taken by the public health service include the mother–child pass programme and care provided by school physicians; check- ups for young people and preventive check-ups for adults are financed by social health insurance. The proportion of participants increased to 14% of the adult population between 1990 and 2003. Since 1992, health promotion has partly been an obligatory task of the health insurance system. In 1998, the Healthy Austria Fund was introduced to complement this work. It is financed from VAT revenue and promotes projects in setting- orientated health promotion and education. Outpatient health care People covered by social health insurance have freedom of choice in the outpatient sector between service providers in private practice (predominantly working in single practices), hospital outpatient departments and 836 outpatient clinics (mainly owned by individuals or the social insurance institutions). As a part of the general agreements, a “location plan” is also negotiated at Länder level for outpatient care provision by contracted physicians, on the basis of which the health insurance funds selectively award individual contracts to a proportion of the physicians in private practice. It regulates the number and the geographical distribution of contracted physicians per specialty and is drawn up according to sociodemographic factors and existing hospital capacities in the catchment area. In 2003, 43% of the 19 209 self-employed physicians in private practice had a contractual relationship with one or more health insurance funds. Approximately 57% 8HiT summary: Austria, 2006 3 4 5 6 7 8 9 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Austria Czech Republic France Germany Hungary EU average Fig. 2 Number of hospital beds per 000 inhabitants in acute hospitals in Austria, selected countries and EU average, 990–2004 Source: European Health for All database, January 2006. worked as non-contracted physicians. Among dentists, the ratio was 72%:28%. In 2004, the social insurance institutions financed an average of 5.5 cases with contracted physicians per insured person as benefits in kind, and 1.2 cases with non-contracted physicians by reimbursement of part of the costs. This rate of usage was approximately average for the EU (6.6 outpatient contacts with physicians in 2001). However, this does not include contacts with outpatient clinics or hospital outpatient clinics. During the accounting period (usually three months), the patient may only change from one contracted physician to another with the approval of the health insurance fund. There is no special gatekeeping function for general practitioners. Inpatient health care Inpatient health care is predominantly provided by public hospitals (49% of all hospitals with 68% of all hospital beds in 2003) as well as by hospitals owned by private non- profit-making organizations (19%/16%), social insurance institutions (19%/9%) and private profit-orientated owners (17%/6%). Of these, a total of 139 public or private non-profit-making hospitals (51%/73%) are required to provide care to all patients requiring it and receive public subsidies for investments and running costs (fund hospitals). In the final analysis, 72% of hospital beds provided acute care in 2003. Between 1990 and 2003, the number of acute beds was reduced by 15%; the average figure for the EU, however, was 22% (Fig. 2). In 2003, the ratio of inhabitants to acute beds of 6 beds per 1000 people was clearly above the EU average of 4.2 per 1000 inhabitants. In addition, Austria had by far the highest admission rate (28.8 per 100 inhabitants), whereby a proportion of hospital outpatient cases are included in this figure. The average length of stay, on the other hand, was shorter than the EU average (6.4 compared with 6.9 days), while the 9HiT summary: Austria, 2006 Table Acute hospital utilization and performance in Austria, selected countries and EU average, 2004 (or latest available year) Beds per 000 inhabitants Admissions per 00 inhabitants Average length of stay (in days) Occupancy rate (%) Austria 6.0a 28.8a 6.4a 76.2a Czech Republic 6.2 20.8 8.2 74.8 France 3.8a 16.6a 6.1a 84.0a Germany 6.4 20.4 8.7 75.5 Hungary 5.9 23.5 6.5 76.6 EU average 4.2 17.5a 6.9a 77.5a Source: European Health for All database, January 2006. Note: a 2003. utilization of bed capacity was slightly higher (76.2% compared with 77.5%) (Table 1). Long-term care Depending on the group of the insured in question (or if there is a work-related cause), medical rehabilitation is financed by social health insurance, pension insurance or work-accident insurance. Until now, it has largely been provided in hospitals and institutional settings and partly in the insurance institutions’ own facilities. As far as the care of the mentally ill is concerned, the number of hospital and institutional beds has been significantly reduced since 1980; others have been integrated into general hospitals and the average length of stay considerably reduced to 18 days (2003). The extension of facilities and services (providing residential and work-related support and day structure) close to the homes and lives of patients varies between the Länder and since 1999 has been an integral part of the nationwide psychiatry concept in the Hospitals and Major Equipment Plan. In 1993, the Federal Long-Term Care Benefit Act and the nine largely identical Länder-level long-term care benefit acts were introduced, providing for long-term care benefit to which there is a legally enforceable entitlement if there is a need for care which will presumably last for at least six months. Its award is independent of the claimant’s income and assets and the reason for their need for care. It is granted to all age groups in seven stages depending on the need for care (between €148 and €1562 per month in 2005). Long-term care benefit is financed from general tax revenue. In 2003, 4.5% of the population received long-term care benefit, 85% from the federal government budget and 15% from Länder budgets. In order to further develop long-term care in a nationally uniform way, the Federal Government and the Länder conclude an agreement according to Federal Constitution Article 15a for every legislative period. This deals with quality specifications and capacity planning for homes as well as mobile services and day clinics. Health personnel and training The number of employees in the health care sector is growing much faster than that of other service sectors. In 2004, the density of practising physicians was 3.5 per 1000 inhabitants and thus average for the EU (3.5). Compared to 1980, the number of practising physicians (Fig. 3) and dentists (0.5 in 2003) has increased at double the rate. The number of specialists has grown in particular, doubling between 1990 and 2003. The number of psychotherapists (0.65 in 2004) has increased fivefold compared to 1992. The number of nurses also doubled between 1980 and 2003 to 6 per 1000 inhabitants. However, it was still clearly below the EU average of 7.3 in 2003. The 0HiT summary: Austria, 2006 Fig. 3 Number of physicians per 000 inhabitants in Austria, selected countries and EU average, 980–2004 Source: European Health for All database, January 2006. density of health personnel varies considerably according to the Land in question. Pharmaceuticals Since 2006, medicines are licensed by the PharmMed Austria division of the Federal Office for Safety in the Health Care System (whereby certain time deadlines have had to be adhered to since 2004). The Federation of Austrian Social Insurance Institutions decides on the reimbursement of the costs of authorized pharmaceuticals, in which it is advised by the cross-stakeholder Medicines Evaluation Commission. Its decisions are scrutinized (upon application) by the Independent Medicines Commission. Since 2004, every medicine is assigned to one of four “boxes”, for which different rules apply for reimbursement and price regulations: all newly licensed medicines are assigned to the red box for a limited period; they are subject to authorization by supervising physicians and quantity controls by the health insurance funds. Subsequently, they are classified as medicines with an important additional therapeutic benefit (yellow box) with similar regulations, as medicines which can be freely prescribed (green box) or as medicines whose costs are not reimbursed, or are only reimbursed in exceptional cases (no box). The prices are set according to the average EU price (red box), or are subject to quantity discounts and price grades (yellow box) or percentage price reductions as well as promotional measures for generic drugs (green box). The Federal Government sets degressive mark-ups for wholesalers and pharmacies. Retail pharmacies are highly regulated and are within the area of responsibility of the Federal Government. In 2003, 2221 pharmacies were licensed to dispense medicines to the public. Of these, 52% were public pharmacies, 1% were branches 0 1 2 3 4 19 80 19 81 19 82 19 83 19 84 19 85 19 86 19 87 19 88 19 89 19 90 19 91 19 92 19 93 19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 Austria Czech Republic France Germany Hungary EU average EU Member States before 1 May 2004 EU Member States joining EU on 1 May 2004 HiT summary: Austria, 2006 of these pharmacies and 45% were in-house pharmacies in physicians’ offices with a right to dispense drugs (particularly in rural areas). More than 50 hospital pharmacies are responsible for supplying medicines in hospitals. The disproportionate rise in expenditure on medicines (from 1990) particularly affected health insurance funds (especially for patented medicines subject to the authorization of supervisory physicians), but also private households. The growth in expenditure slowed to 4% in 2004 and was thus within the agreed target range. Compared to other countries, only a small proportion of generic drugs are prescribed (less than 10%). The initiative “Medicines & Reason” (Arznei & Vernunft), which was jointly established by the social insurance institutions and the pharmaceuticals industry, and since 2003 has also included the Austrian Chamber of Physicians and the Pharmacists’ Association, is to set binding evidence-based guidelines for the prescription, dispensing and use of medicines. Health technology assessment and eHealth Evidence-based health technology assessments are carried out by the Federation of Austrian Social Insurance Institutions (or the Medicines Evaluation Commission) for the admission of medicines to reimbursement categories and for authorization by head physicians in individual cases. They are also carried out by the Austrian Health Institute and the Institute for the Assessment of the Consequences of Technology. Since 1997, major equipment planning has been integrated into hospitals planning and carried out on a cross-sector basis. Between 1998 and 2003, the number of major equipment units rose by around a quarter to 495 in acute hospitals and by more than a third to 181 in the outpatient and rehabilitation sectors. The density of such equipment is partly above the OECD average, in part slightly below. Since 2006, the “e-card” has replaced paper vouchers of social health insurance funds (and for the time being is valid only in the outpatient sector). Employees with social health insurance pay an annual user fee of €10 via their employer. In the agreement according to Federal Constitution Article 15a for 2005–2008, the contracting parties decided to introduce electronic health files and e-prescriptions. Financial resource allocation Third-party budget setting and the allocation of resources There are a multitude of financing flows and forms of financing, reflecting the plurality of financing and service provision. They differ according to the sector in question and are usually bound up with joint planning and steering competencies. The use of resources in the outpatient sector is mainly controlled via general agreements and by selective agreements with contracted physicians. Doctors’ prescriptions are checked (and partly approved) by supervisory physicians employed by the health insurance funds. In the inpatient sector, budgets are set for funding from public sources in accordance with the negotiations on financial adjustment, and are linked to VAT revenue. The Federal Government sets a part of this aside for transplants, structural measures and special planning activities, while the remainder flows into State Health Funds at Länder level where public funding is pooled with budgeted funding from the social health insurance system. According to the 2005 health reform, the “cooperation area” or “reform pool” is also to be set up in the State Health Funds. This should enable funding for the shifts in services planned in the Austrian Structural Plan for Health to be made available to other (mostly outpatient) sectors, as well as for integrated forms of care provision. A total of 1% (by 2008 up to 2%) of the money in the funds is to be brought into the reform pool. 2HiT summary: Austria, 2006 Payment of hospitals The Länder (and local authorities) are not only responsible for investment and maintenance costs, but also contribute towards the running costs of public hospitals in accordance with federal and Länder hospitals laws. Public hospitals are owned by public or private non-profit-making bodies, are listed in the hospitals plans at Länder level, are subject to public law and are financed from State Health Funds (these replaced the State Funds in 2005). In 2004, the total cost of public hospitals amounted to €8.5 billion. Approximately 10% of this came from private sources (7% from private supplementary insurance and 3% from direct or indirect cost-sharing by private households) and 50% from the State Health Funds. The funds are mainly financed by budgeting funding from the social health insurance system (around 80%), supplemented by budgeted funding from the Federal Government (7.1%), the Länder (1.9%) and local authorities (1.3%). This is raised from VAT revenue in accordance with the financial adjustment negotiations between the Federal Government and the Länder. Around half of the costs are financed by the hospital owners (Länder and private non-profit-making organizations). This funding mainly flows directly to public hospitals. Since 1997, the Federal Government has had the possibility of withholding funding for hospitals, particularly if the Länder do not implement planning and quality specifications. This amount translates into approximately 2% of the total costs of public hospitals. Until now, this sanctioning mechanism has not been used. The reimbursement of the inpatient services of public hospitals has been carried out on the basis of a modified diagnosis-related groups (DRGs) payment system since 1997. The Austrian DRG model consists of a core component of nationally uniform procedure- and diagnosis-orientated case groups and a fund control area which takes the special characteristics of hospitals into account and differs according to the Land in question. The DRG system is updated annually and included a total of 883 procedure- and diagnosis- orientated case groups in 2005. A length of stay is assigned to each DRG; if this is exceeded or the stay is shorter, points are added or subtracted degressively from the DRG flat rate. Given the financial situation in the acute inpatient sector with partial budget setting, the procedure- and diagnosis-orientated reimbursement system with points per DRG has led to a reduction of lengths of stay and an increase in technical efficiency, but also to an increase in admissions. In public hospitals, the inpatient area accounted for 88% of costs and hospital outpatient clinics for 12% in 2004. The services of the latter are currently being reimbursed with special flat rates per case; in future they are to be integrated into the DRG system in order to promote a shift of inpatient services into the outpatient sector. Private profit-orientated hospitals are financed by direct payments from private households and from private supplementary insurance. In addition, 45 of the 47 establishments currently have contracts with individual social health insurance institutions, whose capped funding is pooled in the Private Hospitals Financing Fund founded since 2002, and paid out according to criteria of the Austrian DRG model. Payment of physicians Outpatient medical and dental services are financed from contributions to social health insurance. The services of non-contracted physicians and dentists are reimbursed up to a level of 80% of the fee which a contracted physician would charge for the same service; all other fees are paid directly by private households or by private supplementary insurance. The fees of non-contracted physicians are usually significantly higher than the fees negotiated for contracted physicians. The payment of physicians in private practice is set so that operating costs and investments for the practice can be amortized. Health insurance funds conclude individual contracts selectively with a proportion of physicians and dentists in private practice (43% and 72% respectively in 2005). These contracts 3HiT summary: Austria, 2006 are largely determined by the general agreements. According to these, contracted physicians receive a mixture of payments per patient for basic services and per individual service for items which go beyond the scope of basic services. The distribution of these payment elements varies according to specialty, Land and partly owing to the type of health insurance fund. In some Länder there are limitations on service amounts with degressive payments for physicians’ services. Health care reforms From 1978, health reforms mostly had the aim of stabilizing expenditure growth and modernizing the structures of the health care system. Furthermore, the range of services is to be even more geared to the needs of the population and quality and patient orientation are to be improved. Since the mid-1990s, ensuring the financial feasibility of the health care system has been increasingly and more explicitly formulated as a key objective. Specific national health goals were formulated in the 2005 health reform. The consolidation of public finances became increasingly significant from 1980 onwards, particularly owing to rising expenditure in the public health system, a slowing down of economic growth and as a result of the EU stability requirements for the introduction of the euro. The introduction of budget setting for health insurance funding for hospitals in 1997 directly linked annual expenditure to the development of contribution revenue. Budgets are also set for the payments from the Federal Government, the Länder and local authorities, although the Länder and local authorities as the owners of public hospitals increasingly provide additional funding. Further cost-containment measures included the introduction of procedure- and diagnosis- based reimbursement in the inpatient sector (1997), the repeated increase of co-payments, and selective contracting with physicians in private practice. In the pharmaceuticals sector, recent years have seen price regulations, a lowering of the degressive mark-ups for wholesalers and pharmacies, quantity discounts for health insurance funds and measures to increase the low levels of generic drugs prescribed and reduce the number of refundable medicines. In 2005, the categories for reimbursement and pricing were fundamentally revised. To ensure sufficient financing, cost-sharing by private households, the funding from Länder and local authorities as well as contributions and ceilings on insurable earnings in social health insurance were increased, particularly the (reduced) contribution for pensioners (2003, 2005). The contributions of wage and salary earners were aligned in 2003. The 1997 structural reforms were accompanied by a reorganization of financing flows and decision-making flows. Transforming the hospitals financing fund into a structural fund at federal level and nine Länder funds was intended to provide better integration of inpatient and outpatient service provision at Länder level and interface management was to raise the potential for greater efficiency. In addition, major equipment planning (1997) and psychiatry planning (1999) were integrated into (acute) hospital planning, made binding and extended to include the outpatient sector. The 2005 health reform created organizational opportunities for cross-sector planning, quality assurance and financial incentives. In the currently valid agreement according to Federal Constitution Article 15a (2005–2008) the Federal Government’s competency for planning and regulation is fundamentally strengthened and extended to all areas of care. The Austrian Structural Plan for Health, the nationwide quality specifications and the “reform pool” are of great significance in this context. The social health insurance institutions’ ability to exercise an influence on cross-sector planning at Länder level was increased by the introduction of the Health Platforms, which govern the State Health Funds. An increase in mergers, specialization and rationalization measures is expected to ensue from the organizational privatizations of public hospitals since 2002. 4HiT summary: Austria, 2006 The Health Reform Act 2005 is a compre- hensive federal law to ensure the quality of health services, to focus fragmented quality assurance activities and to realize nationwide specifications for the provision of services in all sectors and for all health professions. Specifically for physicians in private practice, the Austrian Chamber of Physicians established an organization to develop binding standards for quality assurance and quality management in medicine. Conclusions In the past 25 years, the stakeholders in the Austrian health care system have succeeded – characteristically by means of cooperative agreements and planning – in ensuring almost universal health care provision with an extensive catalogue of services, in spite of considerable increases in expenditure and continuing cost- containment measures. Waiting times for medical treatment are rarely discussed in public and have to be viewed as short in comparison to other countries, although there has been no precise evaluation of this. However, the structure of offers is characterized by inequalities between the Länder and also between urban and rural areas. Altogether, life expectancy and most of the documented health indicators have improved markedly since the early 1990s. The level of satisfaction of the population with the health care system continues to be high in an international comparison. Cost-containment measures have contributed to a consolidation of the growth in health expenditure, but have not been able to avoid an increase in expenditure above the level of economic growth. They have also not been able to prevent deficits in the health insurance funds and to spare the Federal Government the task of raising contribution revenue and thus non-wage labour costs. In spite of a reduction in acute beds, Austria has an above-average level of inpatient capacity in comparison to other EU countries. The exceedingly high admission rates are partly owing to the procedure and diagnosis-based inpatient reimbursement system and to a lack of incentives to shift services to outpatient settings. Sectoral fragmentation, which also creates the bias towards hospitals, is a long-standing weakness of the Austrian health care system. In spite of numerous efforts, it has until now not been possible to allow funding to follow the services provided across the sectoral borders caused by administrative and financial factors, and to structure the supply chain in a needs- orientated way. The planning, structures and funds introduced since 2005 permit for the first time the cross-sectoral control of capacities and financing flows as well as incentives for improved interface management and integrated forms of care. However, the degree to which these measures have been implemented is still unclear. Further health policy challenges exist in the expected increase of the number of elderly people, a partial increase in demand, and the integration of technological innovations into the range of services of publicly financed health care. Future reforms should pursue the following priorities: first, to ensure a financial basis in order to be able to continue to guarantee the needs- orientated utilization of health services and to finance it according to individuals’ ability to pay; second, the productivity of health care workers in the public health system should be further improved; and third, it should be ensured that the increased use of funding really leads to health- relevant benefits. This can only be guaranteed if investment decisions are increasingly based on technology assessment methods and if quality assurance determines health care practices. 5HiT summary: Austria, 2006 HiT summary Austria Health Systems in Transition European Observatory on Health Systems and Policies The Health Systems in Transition (HiT) profile on Austria was compiled by Maria M. Hofmarcher (Institute for Advanced Studies, Vienna) and Herta M. Rack (Federal Ministry of Health and Women, with the collaboration of Gerald Röhrling (IHS, Vienna). Gerald Röhrling not only researched and compiled data tirelessly; he also made an important contribution to Chapter 4 on the health care delivery system. This HiT was edited by Annette Riesberg (Technical University Berlin) and the research director was Reinhard Busse (European Observatory on Health Systems and Policies, Technical University Berlin). The compilation of the HiT Austria 2006 was advised by a committee whose members we would like to thank for their helpful clarifications and constructive support. The European Observatory on Health Systems and Policies wishes to thank Armin Fidler (World Bank) for reviewing the report and providing valuable suggestions. The HiT Austria 2006 was first published in German and was translated into English by Mike Delaney and edited by Annette Riesberg and Maria M. Hofmarcher. The publication process of the HiT was coordinated by Giovanna Ceroni with the support of Nicole Satterley (copy-editing), and Shirley and Johannes Frederiksen (layout). Administrative support for preparing the HiT was undertaken by Pieter Herroelen. The HiT refers to reforms and data available as at February 2006. The European Observatory on Health Systems and Policies is a partnership between the World Health Organization Regional Office for Europe, the governments of Belgium, Finland, Greece, Norway, Slovenia, Spain and Sweden, the Veneto Region of Italy, the European Investment Bank, the Open Society Institute, the World Bank, CRP-Santé Luxembourg, the London School of Economics and Political Science, and the London School of Hygiene & Tropical Medicine. This partnership supports and promotes evidence-based health policy through a comprehensive and in-depth analysis of health systems in Europe.
Health Systems in Transition Vol. 8 No. 3 2006
Austria Health system review
on Health Systems and Policies
European
Maria M Hofmarcher • Herta M Rack
Editor: Annette Riesberg
The European Observatory on Health Systems and Policies is a partnership between the World Health Organization Regional Office for Europe, the Governments of Belgium, Finland, Greece, Norway, Slovenia, Spain and Sweden, the Veneto Region of Italy, the European Investment Bank, the Open Society Institute, the World Bank, CRP-Santé Luxembourg, the London School of Economics and Political Science, and the London School of Hygiene & Tropical Medicine.
2006
Health Systems in Transition
Written by Maria M. Hofmarcher, Institute for Advanced Studies, Vienna, Austria
Herta M. Rack, Federal Ministry of Health and Women, Vienna, Austria
With the collaboration of Gerald Röhrling, Institute for Advanced Studies, Vienna, Austria
Edited by Annette Riesberg, Department of Health Care Management, Technical University Berlin, Germany
Austria: Health System Review
© World Health Organization 2006, on behalf of the European Observatory on Health Systems and Policies All rights reserved. The European Observatory on Health Systems and Policies welcomes requests for permission to reproduce or translate its publications, in part or in full.
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The views expressed by authors or editors do not necessarily represent the decisions or the stated policies of the European Observatory on Health Systems and Policies or any of its partners.
The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the European Observatory on Health Systems and Policies or any of its partners concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Where the designation “country or area” appears in the headings of tables, it covers countries, territories, cities, or areas. Dotted lines on maps represent approximate border lines for which there may not yet be full agreement.
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Keywords: DELIVERY OF HEALTH CARE
EVALUATION STUDIES
FINANCING, HEALTH
HEALTH CARE REFORM
HEALTH SYSTEM PLANS – organization and administration
AUSTRIA
ISSN 1817-6127 Vol. 8 No. 3
Suggested citation: Hofmarcher M M, Rack H-M. Austria: Health system review. Health Systems in Transition, 2006; 8(3):1–247.
Printed and bound in the United Kingdom by TJ International, Padstow, Cornwall.
http://www.euro.who.int/PubRequest
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Contents
Preface ............................................................................................................ v Acknowledgements ...................................................................................... vii List of tables and figures ............................................................................... ix List of tables ....................................................................................... ix List of figures ...................................................................................... xi List of abbreviations and glossary .............................................................. xiii Executive summary .................................................................................... xvii 1. Introduction and historical background ..................................................... 1 1.1 Introductory overview .................................................................... 1 1.2 Historical background .................................................................. 12 2. Organizational structure and management ............................................... 31 2.1 Organizational structure of the health care system ...................... 32 2.2 Planning, regulation and management ......................................... 48 2.3 Decentralization of the health care system .................................. 64 3. Health care financing and expenditure ..................................................... 71 3.1 Main system of finance and coverage .......................................... 73 3.2 Health care benefits and rationing ............................................... 81 3.3 Complementary sources of finance .............................................. 87 3.4 Health care expenditure ............................................................... 97 4. Health care delivery system ................................................................... 107 4.1 Public health services ................................................................ 107 4.2 Prevention and health promotion ............................................... 111 4.3 Outpatient health care ................................................................ 118 4.4 Inpatient health care ................................................................... 126 4.5 Outpatient and inpatient long-term care .................................... 136 4.6 The integration of service provision .......................................... 143 4.7 Human resources and training ................................................... 145 4.8 Pharmaceuticals ......................................................................... 158 4.9 Health technology assessment and eHealth ............................... 164
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5. Financial resource allocation ................................................................. 171 5.1 Third-party budget-setting and the allocation of resources ....... 171 5.2 Payment of hospitals .................................................................. 177 5.3 Payment of physicians ............................................................... 186 6. Health care reforms ................................................................................ 195 6.1 Aims and objectives ................................................................... 197 6.2 Content of health reforms .......................................................... 203 7. Conclusions ............................................................................................ 215 8. Health care legislation ............................................................................ 225 8.1 Ongoing amendments 1978–2005 ............................................. 225 8.2 Laws and amendments, 1978–2005 ........................................... 226 9. Appendices ............................................................................................. 233 9.1 References ................................................................................. 233 9.2 HiT methodology and production process ................................. 245
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Preface
The Health Systems in Transition (HiT) profiles are country-based reports that provide an analytical description of a health system and of reform initiatives in progress or under development. The HiTs are a key element
of the work of the European Observatory on Health Systems and Policies. HiTs seek to provide relevant comparative information to support policy-makers and analysts in the development of health systems in Europe.
The HiT profiles are building blocks that can be used:
to learn in detail about different approaches to the organization, financing and delivery of health services;
to describe the process, content and implementation of health reform programmes; to highlight challenges and areas that require more in-depth analysis; and
to provide a tool for the dissemination of information on health systems and the exchange of experiences of reform strategies between policy-makers and analysts in different countries.
The HiT profiles are produced by country experts in collaboration with the Observatory’s research directors and staff. In order to facilitate comparisons between countries, the profiles are based on a template, which is revised periodically. The template provides the detailed guidelines and specific questions, definitions and examples needed to compile a HiT. This guidance is intended to be flexible to allow authors to take account of their national context.
Compiling the HiT profiles poses a number of methodological problems. In many countries, there is relatively little information available on the health system and the impact of reforms. Due to the lack of a uniform data sources, quantitative data on health services are based on a number of different Sources,
•
•
•
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including the Health for All database, Organisation for Economic Co-operation and Development (OECD) Health Data and data from the World Bank. Data collection methods and definitions sometimes vary, but typically are consistent within each separate series.
The HiT profiles provide a source of descriptive information on health systems. They can be used to inform policy-makers about experiences in other countries that may be relevant to their own national situation. They can also be used to inform comparative analysis of health systems. This series is an ongoing initiative: material is updated at regular intervals. Comments and suggestions for the further development and improvement of the HiT profiles are most welcome and can be sent to info@obs.euro.who.int. HiTs, HiT summaries and a glossary of terms used in the HiTs are available on the Observatory’s web site at www.euro.who.int/observatory.
http://www.euro.who.int/observatory
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Acknowledgements
The Health Systems in Transition profile on Austria was compiled by Maria M. Hofmarcher (Institute for Advanced Studies (IHS), Vienna) and Herta M. Rack (Federal Ministry of Health and Women, BMGF,
Vienna) with the collaboration of Gerald Röhrling (IHS, Vienna). Gerald Röhrling not only researched and compiled data tirelessly; he also made an important contribution to Chapter 4 on the health care delivery system. This HiT was edited by Annette Riesberg (Technical University Berlin) and the research director was Reinhard Busse (European Observatory on Health Systems and Policies, Technical University Berlin).
The basis for this report was the HiT Austria 2001 (1), which was written by Maria M. Hofmarcher and Herta M. Rack and edited by Anna Dixon (from the then European Observatory on Health Care Systems). The research director for the HiT Austria 2001 was Elias Mossialos.
The compilation of the HiT Austria 2006 was advised by a committee whose members we would like to thank for their helpful clarifications and constructive support. The members of the advisory committee were (in alphabetical order): Gabriela Altenberger (Federal Ministry of Education, Science and Culture, BMBWK), Magdalena Aurrouas (BMGF, Dept. III/A/1), Eleonore Bachinger (City Council of Vienna/Health Reporting), Eva-Maria Baumer (Regional Health Insurance Fund Vienna), Hermine Dannerbauer (Statistics Austria), Karin Doppler (BMBWK), Ilse Enge (Federal Ministry of Social Security, Generations and Consumer Protection, BMSG, Dept. IV/1), Ursula Fronaschütz (BMGF, Dept. IV/A/5), Odo Feenstra (Office of the Styrian Länder Government), Vera Gacs (Statistics Austria), Jeannette Klimont (Statistics Austria), Ilse Kosch (Coordination Office of the Länder), Cornelia Lamm (Statistics Austria), Inge Leeb-Klaus (BMGF, Dept. IV/A/5), Sascha Müller (Federation of Austrian Social Security Institutions, HVSV), Nicola Oberzaucher (Europäisches
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Zentrum), Gabriela Offner (Federal Ministry of Finance, BMF, Dept. II/5), Nina Pfeffer (HVSV), Karin Pfeiffer (BMSG, Dept. IV/4), Günter Porsch (BMGF, Dept. I/B/10), Josef Probst (HVSV), Waltraud Richter (Statistics Austria), Ingrid Rosian-Schikuta (Austrian Federal Institute for Health, ÖBIG), Ulrike Schermann-Richter (BMGF, Dept. IV/A/3), Gabriele Schmied (Europäisches Zentrum), Andreas Stoppacher (HVSV), Thomas Worel (BMGF, Dept. IV/A/4) and Siegfried Wötzlmayr (BMGF, Dept. I/B/10).
The European Observatory on Health Systems and Policies wishes to thank Armin Fidler (World Bank) for reviewing the report and providing valuable suggestions.
The current series of Health Systems in Transition profiles has been prepared by the research directors and staff of the European Observatory on Health Systems and Policies. The European Observatory on Health Systems and Policies is a partnership between the World Health Organization Regional Office for Europe, the governments of Belgium, Finland, Greece, Norway, Slovenia, Spain and Sweden, the Veneto Region of Italy, the European Investment Bank, the Open Society Institute, the World Bank, CRP-Santé Luxembourg, the London School of Economics and Political Science, and the London School of Hygiene & Tropical Medicine.
The Observatory team working on the Health Systems in Transition profiles is led by Josep Figueras, Director, and Elias Mossialos, Co-Director, and by Reinhard Busse, Martin McKee and Richard Saltman, Heads of the Research Hubs. Technical coordination is led by Susanne Grosse-Tebbe.
The HiT Austria 2006 was first published in German and was translated into English by Mike Delaney and edited by Annette Riesberg and Maria M. Hofmarcher. The publication process of the HiT was coordinated by Giovanna Ceroni with the support of Nicole Satterley (copy-editing), and Shirley and Johannes Frederiksen (layout). Administrative support for preparing the HiT was undertaken by Pieter Herroelen.
Special thanks are extended to the European Health for All database, from which data on health services were extracted; to the OECD for the data on health services in western Europe; and to the World Bank for the data on health expenditure in central and eastern European countries. Thanks are also due to national statistical offices that have provided data.
The HiT refers to reforms and data available as at February 2006.
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List of tables and figures
Tables
Table 1.1 Economic indicators, 2000-2007 6
Table 1.2 Forecast development of real GDP, annual percentage change, 2005–2007 7
Table 1.3 Development of health care expenditure in the period 1960–2000 8
Table 1.4 Population and health status, 1990 and 2004 9
Table 1.5 Selected indicators of morbidity, mortality and lifestyle, 1990 and 2004 9
Table 1.6 Leading causes of death (ICD-10), age-standardized per 100 000 inhabitants, 1970–2004 11
Table 1.7 Number of health insurance funds, 1925 19
Table 1.8 The General Social Security Act (ASVG), 1955 24
Table 1.9 Development of social insurance, 1889–2005 28
Table 2.1 Decision-making competencies and public financing according to service areas in the health care system, 2005 68
Table 2.2 Public–private mix of financing and delivery, in % of total health expenditure, 2003 69
Table 3.1 Financing sources as a percentage of total health expenditure, 1995 to 2004 72
Table 3,2 Social health insurance funds and their membership, 2003 74
Table 3.3 Contribution rates in the social insurance system, 2005 76
Table 3.4 Health welfare institutions for civil servants by Land, 2005 79
Table 3.5 Expenditure of social health insurance, nominal, in million €, 1970–2003 83
Table 3.6 Structure of nominal private health expenditure in million € and as a percentage of private health expenditure, 1995–2004 90
Table 3.7 Indirect cost-sharing according to service areas, 1995–2004 91
Table 3.8 Direct cost-sharing according to services areas, 1995–2004 92
Table 3.9 Introduction and withdrawal of direct cost-sharing measures, 1956–2006 93
Table 3.10 Regulations for direct cost-sharing according to sector, 2005 95
Table 3.11 Benefits from private health insurance, 2004 97
Table 3.12 Development of health expenditure, 1970–2004 99
Table 3.13 Structure of health care expenditure as a percentage of total health expenditure, 1995–2004 104
Table 4.1 Preventive check-ups, 1990–2003 115
Table 4.2 Practising specialists according to specialty groups, 1990 and 2003 120
Table 4.3 Development of some key figures in outpatient care provision, 1970–2004 121
Table 4.4 Parameters of outpatient and inpatient care, 2003 126
Table 4.5 Inpatient stays per 100 000 inhabitants according to main diagnoses, 1970–2003 129
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Table 4.6 Hospital care, 1980–2003 130
Table 4.7 Ownership and types of hospitals and beds, 2003 131
Table 4.8 Number of hospital beds by hospital type, 2003 132
Table 4.9 Development of the number of hospitals and beds, 1990–2003 133
Table 4.10 Inpatient utilization and performance in acute hospitals in the WHO European Region, 2004 or latest available year 135
Table 4.11 Rates of long-term care benefit, 2005 139
Table 4.12 Number and care stages of federal long-term care benefit recipients, 1995–2003 141
Table 4.13 Employees in the health care system and in the economy as a whole, 1995–2004 146
Table 4.14 Selected occupational groups in the health care system, 1970–2003 (head count) 147
Table 4.15 Number of health care professionals in the European Union per 1000 inhabitants, 2004 or last available year (personnel including those still in training) 151
Table 4.16 Pharmaceuticals market, 1998–2003 158
Table 4.17 Expenditure on medicines by sources of financing, 1990–2003 160
Table 4.18 Prescriptions at the expense of health insurance funds, 1993–2003 163
Table 4.19 Major medical equipment, 1998 and 2003 166
Table 5.1 Public hospitals – sources of funding, 1997–2004 173
Table 5.2 Development of final costs in public hospitals (nominal), 1997–2004 177
Table 5.3 Characteristics of the performance-orientated hospital financing system, 2005 179
Table 5.4 Medical service item groups and principal diagnosis-related groups as a basis of performance-orientated flat rates per case, 1998, 2000 and 2005 180
Table 5.5 Data in diagnoses and services reports 182
Table 5.6 Distribution of budgeted funding according to individual Länder, 2004 183
Table 5.7 Investments and ratio of beds to inhabitants according to Länder, 1993 and 2003 185
Table 5.8 Development of costs in the acute inpatient care according to Länder, 1993 and 2003 185
Table 5.9 Structure and development of the turnovers of general practitioners and specialists (ASVG funds), 2003 191
Table 5.10 Development of the turnovers of general practitioners and specialists (ASVG funds) 192
Table 6.1 Main focuses of health care reforms, 1977–2005 198
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Figures
Fig. 1.1 Map of Austria 2
Fig. 1.2 Self-assessed health status (“very good”) according to levels of education and gender, 1991 and 1999, in %, age-standardized 13
Fig. 1.3 Self-assessed health status (“poor and very poor”) according to levels of education and gender, 1991 and 1999, in %, age-standardized 13
Fig. 2.1 Organizational structure and lines of accountability in the health care system, 2005 32
Fig. 3.1 Development of direct cost-sharing, in e per capita at GDP prices 2000, 1995–2004 93
Fig. 3.2 The development of health care expenditure as a percentage of GDP in Austria, selected countries and EU averages, 1980–2004 100
Fig. 3.3 Total expenditure on health as a % of GDP in the WHO European Region, 2004, WHO estimates 101
Fig. 3.4 Health care expenditure in US$ PPP in the WHO European Region, 2004, WHO estimates 102
Fig. 3.5 Health care expenditure from public sources as a percentage of total health care expenditure in the WHO European Region, 2004, WHO estimates 103
Fig. 3.6 Public health care expenditure according to age groups, in € per capita, 2003 105
Fig. 4.1 Immunization rates for measles in the WHO European Region, 2004 (or latest available year) 110
Fig. 4.2 Outpatient contacts per person in the WHO European Region, 2004 or latest available year (in parentheses) 123
Fig. 4.3 Hospital beds per 1000 inhabitants in acute hospitals in western Europe, 1990 and 2004 or latest available year (in parentheses) 134
Fig. 4.4 Expenditure of the social insurance system on rehabilitation, 1996–2003, index 1996=100 139
Fig. 4.5 Age distribution of federal and Länder long-term care benefit recipients, 2003 142
Fig. 4.6 Number of physicians per 1000 inhasbitants in Austria, selected countries and EU averages, 1980–2004 148
Fig. 4.7 Number of nurses per 1000 inhabitants in Austria, selected countries and EU averages, 1980–2004 149
Fig. 4.8 Number of physicians and nurses per 1000 inhabitants in western Europe, 2004 or latest available year (in parentheses) 150
Fig. 4.9 Market and price regulation of medicines, 2005 161
Fig. 5.1 The flow of funds in the health care system, 2005 174
Fig. 5.2 Structure of fees for contracted physicians in private practice according to specialties (ASVG funds), 2003 189
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List of abbreviations and glossary
Abbreviation Austrian term English term AAGR Durchschnittliche jährliche
Wachstumsrate Average annual growth rate
AGES Agentur für Gesundheit und Ernährungssicherheit
Agency for Health and Food Safety
AIDS Erworbenes Immunschwächesyndrom Acquired immune deficiency syndrome
ASVG Allgemeines Sozialversicherungsgesetz General Social Security Act
BGBl Bundesgesetzblatt Federal Law Gazette
B-KAG Bundeskrankenanstaltengesetz Federal Hospitals Act
B-KUVG Beamten-Kranken- und Unfallversicherungsgesetz
Act on Civil Servants’ Health and Accident Insurance
BMBWK Bundesministerium für Bildung, Wissenschaft und Kultur
Federal Ministry of Education, Science and Culture
BMF Bundesministerium für Finanzen Federal Ministry of Finance
BMGF Bundesministerium für Gesundheit und Frauen
Federal Ministry of Health and Women
BMSG Bundesministerium für Soziale Sicherung Generationen und Konsumentenschutz
Federal Ministry of Social Security, Generations and Consumer Protection
BMWA Bundesministerium für Wirtschaft und Arbeit
Federal Ministry of Economics and Labour
BR Bundesrat Federal Council (Upper House of Parliament)
BSVG Bauern-Sozialversicherungsgesetz Act on Social Insurance for Farmers
B-VG Bundesverfassungsgesetz Austrian Federal Constitution
BZÖ Bündnis Zukunft Österreich Alliance Future Austria
CINDI Landesweite Integrierte Interventionsprogramme für Nicht- übertragbare Erkrankungen
Countrywide Integrated Noncommunicable Disease Intervention Programme
CT Computertomografie Computed tomography
Dept. Abteilung Department
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DIMDI Deutsches Institut für Medizinische Dokumentation und Information
German Institute for Medical Documentation and Information
DMFT Index Index geschädigter, fehlender oder gefüllter Zähne
Decayed Missing and Filled Teeth Index
DRG Diagnose-orientierte (Fall-)Gruppe Diagnosis-related group
EEA Europäische Wirtschaftsregion European Economic Area
ELGA Elektronische Gesundheitsakte Electronic health file
ESA Europäisches System (Integrierter) Nationaler Volkswirtschaftlicher Gesamtrechnungen
European System of (Integrated) National Accounts
EU Europäische Union European Union
Fig. Abbildung Figure
FOPI Forum der Forschenden Pharmazeutischen Industrie
Forum of the Researching Pharmaceutical Industry
FPÖ Freiheitliche Partei Österreichs Freedom Party of Austria
GDP Bruttoinlandsprodukt Gross domestic product
GGP Großgeräteplan Austrian Major Equipment Plan
GSVG Gewerbliches Sozialversicherungsgesetz
Act on Social Insurance for the Self- employed
GuKG Gesundheits- und Krankenpflegegesetz Nursing Act
HDG Hauptdiagnosengruppe Main diagnosis group
HEK Heilmittel-Evaluierungskommission Medicines Evaluation Commission
HiT Gesundheitssysteme im Wandel Profil Health Systems in Transition Profile
HTA Gesundheitstechnologiebewertung Health technology assessment
HVSV Hauptverband der österreichen Sozialversicherungsträger
Federation of Austrian Social Insurance Institutions
ICD Internationale Klassifikation der Krankheiten
International Classification of Diseases
IHS Institut für Höhere Studien Institute for Advanced Studies
ITA Institut für Technologiefolgen- Abschätzung
Institute for Technology Impact Assessment
IVF In-vitro-Fertilisation In vitro fertilization
KAKuG Bundeskrankenanstaltengesetz Federal Hospitals Act
KFA Krankenfürsorgeanstalten health welfare institutions
KRAZAF Krankenanstalten- Zusammenarbeitsfonds
Hospitals Cooperation Fund
LDF leistungsorientierte Diagnosefallgruppe Performance-orientated (procedure or diagnosis orientated) case group
LKAG Landes-Krankenanstaltengesetz Land Hospitals Act
LKF Leistungsorientiertes Krankenanstalten- Finanzierungssystem
Performance-orientated hospital financing system (Austrian DRG model)
LP Legislaturperiode Legislative period
MBDS Basisdatensatz Minimum Basic Data Set
MEL Medizinische Einzelleistung Single medical procedure
MRI Magnetresonanztomografie Magnetic resonance imaging
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No. Nummer Number
NR Nationalrat National Council (Lower House of Parliament)
ÖAW Österreichische Akademie der Wissenschaften
Austrian Academy of Sciences
ÖBIG Österreichisches Bundesinstitut für Gesundheit
Austrian Federal Institute for Health
OECD Organisation für Wirtschaftliche Zusammenarbeit und Entwicklung
Organisation for Economic Co- operation and Development
OEGV Österreichischer Generikaverband Generic Drugs Association
ÖGD Öffentlicher Gesundheitsdienst Public health service
ÖKAP Österreichischer Krankenanstaltenplan Austrian hospitals plan
ÖSG Österreichischer Strukturplan Gesundheit
Austrian Structural Plan for Health
ÖVP Österreichische Volkspartei Austrian People’s Party
PHARMIG Vereinigung Pharmazeutischer Unternehmen
Austrian Association of Pharmaceutical Companies
PPG Peering Point Gesellschaft Peering Point Association
PRIKRAF Privatkrankenanstalten-Finanzierungs- Fonds
Private Hospitals Financing Fund
SDR (Alters)standardisierte Sterberate (Age-)standardized death rate
SIGIS Service- und Informationsstelle für Gesundheitsinitiativen und Selbsthilfegruppen
Service and Information Centre for Health Initiatives and Self-help Groups
SPÖ Sozialdemokratische Partei Österreichs Social Democratic Party of Austria
TBC Tuberkulose Tuberculosis
THE gesamte Gesundheitsausgaben Total health expenditure
UHK Unabhängige Heilmittelkommission Independent Medicines Commission
VVO Verband der Versicherungsunternehmen
Association of Austrian Insurance Companies
WHO Weltgesundheitsorganisation World Health Organization
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Executive summary
Introductory overview
Austria is a democratic republic and a federal state which is composed of nine Länder. The Länder have their legislative competencies and also participate in legislation at a federal level in the Bundesrat (upper house
of parliament). They are divided into political districts, which in turn are made up of local communities or boroughs. Since 1990, almost all the indicators of the health status of the population have improved significantly. Life expectancy at birth of Austrians rose from an average of 76.0–79.5 years (2004) and was thus above the average of the countries which were EU Member States before May 2004 and all EU Member States. Since the nationwide introduction of mandatory social health and accident insurance in 1887/1888, the proportion of those covered by health insurance has been continuously extended and now includes 98% of the 8.1 million inhabitants.
Organizational structure and management
The Austrian health care system is characterized by the federalist structure of the country, the delegation of competencies to self-governing stakeholders in the social insurance system as well as by cross-stakeholder structures at federal and Länder level which possess competencies in cooperative planning, coordination and financing. According to the Federal Constitution, almost all areas of the health care system are primarily the regulatory responsibility of the federal government. The most important exception is the hospital sector. In this area, the federal government is only responsible for enacting basic law; legislation on implementation and enforcement is the responsibility of the nine Länder. In the outpatient sector, but also in the rehabilitation sector and in the field of medicines, health care is organized by negotiations between
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the 21 health insurance funds and the Federation of Austrian Social Insurance Institutions on the one hand and the chambers of physicians and pharmacists (which are organized as public-law bodies) and the statutory professional associations of midwives or other health professions on the other. The various sectors of the health care system have traditionally been characterized by different stakeholders and regulation- and financing mechanisms. However, in recent years there have been increased efforts to introduce decision-making and financing flows which are effective across all sectors.
Since 2002, all the Länder (except Vienna) as well as some of the private non-profit owners have privatized their hospitals, mainly in the form of organizational privatizations. The various private operating companies have one thing in common: they are responsible for the management of hospitals, whereas the Länder or local authorities as (majority) owners usually act as a guarantor. The Austrian health care system has developed almost completely into a model which is mainly based on decentralized contracts with all service providers.
Health care financing and expenditure
The financing of the health care system is pluralistic in accordance with the constitution and social insurance laws. The social health insurance system, which is the most important source of financing, provided a total of 45.3% of total health care expenditure in 2004. Mandatory insurance is based on membership of an occupational group or place of residence; thus there is no competition between health insurance funds. In 2004, the health insurance funds together had a deficit of €253 million.
In case of need, all those insured within the social health insurance system have a legal entitlement to benefits in kind and cash benefits within the legal framework of the specified range of benefits. There is a wide range of benefits. Alongside statutory obligatory benefits, the health insurance funds also provide various levels of voluntary benefits according to their statutes, such as in the field of prevention, for example, but particularly in relation to exemption from co-payments.
25% of total health care expenditure is financed by the federal government, the Länder and local authorities. 10% of this share was accounted for by tax financed long-term care cash benefits. The latter have been paid out to people in need of long-term care since 1993.
In 2004, around 25% of health care expenditure was financed privately. Private households bore 13.5% of health care expenditure by means of indirect cost-sharing (services whose costs were fully borne by the insured) and 7.6% by
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means of direct cost sharing (co-payments). In addition, 2.4% was financed by private insurance premiums, 1.4% by private non-profit organizations and 0.2% by employers (for the services of company physicians). 53% of indirect cost- sharing was accounted for by hospitals (mainly as private health insurance) and 30% by dental treatment. Direct cost sharing was increased in recent years and affects almost every service provided by social health insurance; however, the outpatient clinics fee introduced in 2001 was withdrawn again in 2005 due to the high costs involved in its implementation and the considerable resistance it had encountered. A large part of direct cost-sharing (47%) in 2004 was accounted for by the services of non-contracted physicians, prescription fees (19%) and therapeutic products (18%). Certain people in need of social protection and the chronically ill are exempted from the prescription fee. In addition, health insurance funds issue their own guidelines on exemptions in other service areas. A total of around 900 000 persons or about 12% of the Austrian population is exempted from direct cost-sharing.
In 2004, Austria spent around €23 billion on health care. This corresponded to 9.6% of its gross domestic product. Without taking the expenditure for long- term care into consideration, which accounts for around 10% of total health care expenditure, the proportion was 8.7%. The current revised data shows significantly higher health care expenditure than with the previous method of calculation, which for 2003 had only indicated a level of 7.5% of GDP and US$ 2257 per capita in purchasing power parities (versus US$ 2951). Seen from this perspective, Austrian health care expenditure no longer appears under-average in comparison with the EU Member States before May 2004, but over-average. Austria ranks in the lower third of EU countries when viewing the public share of total health care expenditure, with a figure of around 70% (68% according to the old health expenditure calculation method).
Health care delivery system
The public health service is the responsibility of the Länder, which delegate most of the relevant tasks to district administrative or local authorities. The public health service is particularly responsible for health reporting, protection against infection, the supervisory activities of health inspectors, environmental medicine, the mother and child preventive programme and the school physicians’ service. Preventive check-ups for young people and adults are financed by the social health insurance system. In 1998, the Healthy Austria Fund was introduced, which finances health promotion initiatives from VAT revenue. Since 2005, health promotion and prevention are also defined as a subtask of the health platforms which manage the Länder health funds and which are intended to steer health care provision and financing across sectors.
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Those covered by health insurance can freely choose between service providers in the outpatient sector, of whom the majority work in individual practices. In addition, outpatient clinics and hospital outpatient departments offer outpatient care. In 2003, only 43% of the 19 209 self-employed physicians in private practice had a contractual relationship with one or more health insurance funds. Around 58% worked as non-contracted physicians. Insured persons who consult non-contracted physicians are reimbursed with four fifths of the fee which the health insurance funds would pay to contracted physicians.
In 2004, the density of practising physicians was 3.5 per 1000 inhabitants and thus average for the EU (3.5). Compared to 1980, the number of practising physicians and dentists (0.5 in 2003) has risen at an over-average rate, with the figures for both professions actually doubling. There is a considerable variation in the density of physicians between the Länder. The number of nursing staff also doubled between 1980 and 2003 to 6 per 1000 inhabitants. However, it was still clearly below (by 17%) the EU average of 7.3 in 2003.
Hospitals which are listed in the hospitals plan of a Land are subject to public law (“fund hospitals”) and have a statutory requirement to provide care and to admit patients. They are entitled to legally prescribed subsidies from public sources for investments, maintenance and running costs. In 2003, the ratio of beds to inhabitants of 6.0 beds per 1000 persons was clearly above the EU average of 4.2 per 1000 inhabitants. In addition, Austria had by far the highest admission rate: 28.4 per 100 inhabitants. The average length of stay in 2003 was shorter than that of the EU average (6.4 days compared to 6.9 days); the utilization of bed capacity at 76.2% was marginally below (77.5%)
With the passing of the 1993 Federal Long-Term Care Act, Austria reacted comparatively early to the approaching demographic challenges. Long-term care provision in Austria is financed almost exclusively from the federal government’s budget and is paid to individuals as a money transfer in seven stages depending on their needs. Like acute inpatient care, long-term care too is a sector where federal cooperation instruments are used, specifically to ensure the uniformity of entitlement criteria and quality standards of long-term care institutions.
Since 2006, pharmaceuticals are licensed by the PharmMed Austria division of the Federal Office for Safety in Health Care in the Austrian Agency for Health and Food Safety. The Federation of Austrian Social Insurance Institutions decides on the reimbursement of the costs of licensed medicines by social health insurance funds. It receives advice on this issue from the Medicines Evaluation Commission. Since 2004, decision-making on pharmaceutical reimbursement is performed according to a box system.
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Financial resource allocation
There are a multitude of financing flows and forms of financing in the Austrian health care system, reflecting the plurality of financing and service provision. Public and non-profit hospitals, which are licensed to provide acute inpatient care in the hospitals plan of the respective Land (“fund hospitals”), have a mandate to provide care to all inhabitants. In return, they have a right to subsidies to the reimbursement of operating costs. The expenditure on these hospitals reached around €8.5 billion in 2004. Of this, 40% was financed by social health insurance funds, 7.4% by private insurance (for “special class” accommodation), and 3% by private households by means of co-payments and out-of-pocket payments. The total costs were also financed by budgeted funding from the federal government (7.1%), the Länder (1.9%) and local authorities (1.3%). In addition, 40% was borne by the owners of public hospitals, i.e. from the Länder governments or private non-profit organizations. The reimbursement of inpatient services in public hospitals has been carried out on the basis of the performance-orientated hospital financing (LKF) since 1997. This consists of a core component of nationally uniform diagnosis related case groups (LDFs) and a fund control area which takes the special characteristics of hospitals into account and differs according to the Land in question.
Outpatient physician treatment is financed by (mandatory) insurance contributions, the premiums from private supplementary insurance and co- payments of private households. The payment of physicians in private practice is, in principle, set so that operating costs and investments for the practice can be amortized. The physicians’ chambers at Länder level negotiate annual general agreements with the Federation of Austrian Social Insurance Institutions on the provision of contracted physician services. This has to be approved by the individual health insurance funds. The general agreements particularly include payment regulations, agreements on service volumes, and a capacity plan (“location plan”). On this basis, individual contracts are awarded to part of the physicians in private practice in accordance with the location plan. Contracted physicians receive a mixture of per capita payments for basic services and fee for service payment for services which go beyond the scope of basic services. The distribution of these payment elements varies according to specialty, Land and partly due to the type of health insurance fund. In part, agreements on volume limitations for physicians’ services are combined with degressive payment scales. In principle, the utilization of resources in the outpatient sector is subject to monitoring by the supervisory physicians (“head physicians”) employed by the health insurance funds.
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Health reforms
Health reforms have primarily dealt with cost containment (by exploiting potential for more efficiency and raising cost sharing) and with structural reforms to improve the planning of capacities, the cooperation of stakeholders and the coordination of financing flows.
In the acute hospital care sector organizational privatizations were performed which was essentially completed by 2002. The reimbursement of services and medicines by social health insurance has been more strongly linked to health technology assessment, but only a small number of benefits have been excluded. At the same time, new benefits have been introduced, such as federal long- term care benefit, psychotherapy, preventive services, and new structures for community-based long-term care.
Contribution revenue has been increased and the contribution rates of some groups of the insured brought into line, but the revenue base has not been fundamentally changed. Quality assurance requirements have been raised and patients’ rights have been strengthened by a charter and patients’ ombudspersons.
Conclusions
In the past 25 years, the stakeholders in the Austrian health care system have succeeded – characteristically by means of cooperative agreements and planning – in ensuring almost universal health care provision with a comprehensive benefit catalogue, in spite of considerable increases in expenditure and continuing cost containment measures.
Waiting times for medical treatment are rarely discussed in public and can be viewed as short in comparison to other countries, although there has been no precise evaluation of this. However, the supply structure is characterized by inequalities between the Länder and also between urban and rural areas. Altogether, life expectancy and most of the documented health indicators have improved markedly in the past 15 years. The level of satisfaction of the population with the health care system continues to be high in an international comparison.
Sectoral fragmentation, which also creates the bias towards hospital care, is a long standing weakness of the Austrian health care system. In spite of numerous efforts, it has until now not been possible – in the sense of allocative efficiency – to allow funding to follow the services provided across sectoral borders. Nor has it been possible to structure the supply chain in a more needs-orientated way across these administrative and financial barriers at the sectoral borders, especially between outpatient and inpatient care or acute and long-term care.
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The planning, structures and funds introduced since 2005 permit for the first time the cross-sectoral steering of capacities and financing flows. They also provide for incentives for improved interface management and integrated forms of care. However, the degree to which these measures have been implemented is still unclear.
Future reforms should pursue the following priorities: firstly, to ensure a financial basis in order to be able to continue to guarantee the provision of health care based on the principle of need and to finance it according to individuals’ ability to pay. Secondly, the productivity of the employees and facilities in the health system should be increased. Thirdly, it should be ensured that increases in funding really lead to health-relevant benefits. This can only be guaranteed if investment decisions are increasingly based on technology assessment methods and if quality assurance determines health care practices.
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1 Introduction and historical background
1.1 Introductory overview
Austria is a federal republic in central Europe (Fig. �.�). Since �995, Austria has been a member of the European Union (EU) and subsequently became a member of the European Monetary Union
(eurozone). The euro has been legal tender in Austria since � January 200�, and since � January 2002 euro banknotes and coins have been in circulation.
Austria is a democratic republic and a federal state which is composed of the autonomous Länder (states) of: Burgenland, Carinthia, Lower Austria, Upper Austria, Salzburg, Styria, Tyrol, Vienna and Vorarlberg. Each Land (except Vienna) is divided into political districts (administrative units), which in turn are made up of local communities or boroughs. The federal capital and the seat of the Federal Government’s supreme bodies is Vienna. At Länder level, federal laws are implemented by the state governor (indirect federal administration) unless there are separate federal agencies responsible for this task (direct federal administration). In indirect federal administration matters the state governor is bound by the instructions issued by the Federal Government as well as individual ministers.
Political background
Federal legislative power is in the hands of the Nationalrat (National Council, lower house of Parliament) and the Bundesrat (Federal Council, upper house of Parliament). The seat of the Nationalrat is the federal capital Vienna. The Nationalrat has �83 members and is elected for a 4-year period. The Bundesrat is the chamber of the nine Länder for federal legislation. Its members are elected by the individual parliaments of the Länder for the duration of the respective
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Germany
Switzerland
Liechtenstein
Italy Slovenia
Czech Republic
S lo
va ki
a H
u n
g ar
y
Croatia
Danube
Innsbruck
Salzburg
Klagenfurt
Graz
Linz
Vienna
0 50 100 km 0 50 100 mi
Fig. 1.1 Map of Austria
Source: The World Factbook, 2005.
state parliament’s legislative period, whereby the number of members delegated per state is based on the ratio of its inhabitants to the number of inhabitants of the most populated state. Each state, however, is entitled to be represented by at least three members. The Bundesrat therefore does not have a fixed number of members that remains the same over time. Like the members of the Nationalrat, the members of the Bundesrat have a free mandate.
The legislative power of the Länder is exercised by the Länder parliaments. The election procedures, standing orders and the status of the members in the Länder parliaments are similar to those in the Nationalrat. The Federal Government is entitled to appeal against the decisions of the Länder parliaments if it considers that federal interests are endangered. However, if the state parliament repeats its original resolution unchanged (Beharrungsbeschluss), the appeal cannot hinder the passing of the resolution.
According to the Federal Constitution, the local communities are regional authorities which have a right to autonomy. That means that they carry out their financial affairs independently and have their own sphere of activity.
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The legislative period of the Nationalrat is 4 years. It can, however, be shortened if the parliament votes for its own dissolution before the legislative period ends, or if the Federal President orders it on the basis of a proposal by the Federal Government, or when a demand by the Nationalrat for the Federal President’s dismissal is rejected in a referendum.
For the preparation of and detailed consultations on issues, committees are appointed whose members are elected from among the members of the Nationalrat. The following have to be appointed:
a central committee (through this body, the Nationalrat takes part in the executive role of the );
a permanent subcommittee to be elected by the central committee (this is responsible among other things for giving its approval to the enactment of emergency decrees by the Federal President);
an immunity committee (this advises on requests by authorities to lift the immunity of members of the Nationalrat for the purpose of prosecution);
a committee for consultations on the reports of the Audit Office.
In addition, there are a number of special committees of the Nationalrat, such as Federationas the constitutional committee, the finance and budget committee, the justice committee, the health committee, the social committee, the education committee and others, which are established as permanent committees for the duration of the legislative period.
At the beginning of each legislative period, the Nationalrat is obliged to appoint permanent committees with fixed areas of responsibility.
With the exception of government bills, which are mostly directly assigned to a committee, the plenary session of the Nationalrat receives an insight into the bill which has been introduced in a “first reading”. If a resolution is passed to proceed with the bill, it is then assigned to the committee which is entrusted with this subject matter. This then presents the results of its consultations to the plenary session in a “second reading”, and a resolution on the final text can subsequently be adopted. Within the framework of the “third reading”, an agreement is finally reached on the rejection or approval of the bill.
The Bundesrat can appeal (giving its reasons) against laws adopted by the Nationalrat. If the Nationalrat then sustains its original resolution, the appeal can no longer hinder the passing of the law and it is carried through.
The economic and social partnership is an informal body where employers and employees cooperate in the preparation and implementation of economic and social policy measures. The most important instrument of the economic and social partnership is the Parity Commission for wage and price issues, which was created on the basis of a voluntary agreement and is not based on
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statutory regulations. The Parity Commission’s members are: the Austrian Trade Union Federation, the Federal Chamber of Labour, the Austrian Economic Chamber, the conference of the presidents of the chambers of agriculture and representatives from the relevant ministries. It is chaired by the Federal Chancellor. The social partnership plays a leading role in the design of social policy. Membership in the chambers is mandatory. The chambers are financed through membership fees, and their executives are elected by the members. All the interest groups involved usually try to reach a consensus on controversial policy issues. At the level of government social policy, the social partners are involved in all decisions. Their representatives take part in political negotiations and hold important positions within the Public Employment Service and/or in the social insurance sector. The social partners provide expert opinions on all draft legislation.
Articles �0 to �5 of the Austrian Federal Constitution define the responsibility of the Federal Government and/or the Länder to issue legislation and implement laws. Within this system of distribution of responsibility, four main groups can be differentiated.
Matters for which legislation and implementation are the responsibility of the Federal Government, that is to say, only the Federal Government can adopt legislation in the respective field and implement these regulations. Among these issues are federal government finances, the monetary, credit, stock exchange and banking systems, the civil and criminal law systems, motor vehicles, issues involving commerce and industry, military issues, the social insurance system and the health care systems (without hospitals). The area of responsibility covered by the “health care system” includes all medical health professions but also, for instance, the Epidemics Act or measures to combat the spread of acquired immune deficiency syndrome (AIDS Act).
Matters in which the Federal Government is responsible for legislation, and the Länder for implementation. These include citizenship issues, the housing sector, redevelopment and traffic police.
Matters in which the Federal Government is responsible for principal legislation, but where the Länder enact laws for their implementation. This type of competency arrangement is applied among others to the social assistance scheme and land reform, to welfare for mothers, infants and youths, sanatoriums and long-term care institutions and the health spa system.
Matters in which the Länder are independently responsible for both legislation and its implementation. This includes issues regarding civil and structural engineering, tourism, the ambulance service, cinemas and other
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event organizers, nursery schools and day homes, fire prevention authorities and funeral services.
The Constitutional Law on Finance of �948 and the Financial Equalization Act which was adopted on the basis of the former are also of particular significance for the assignment of responsibility. They set out whether a certain tax, fee or contribution may be levied by the Federal Government or by the Länder (local communities), and which of these regional authorities receives – in part or in full – the yield from the relevant tax (income tax, trade tax, land tax, wealth tax, value-added tax and others).
At both legislative and executive levels, Austrian federalism can be characterized as an extreme variation of interlocking federalism (2). Within this system there is a clear hierarchy in which the Federal Government takes precedence over the Länder. From this perspective, the Austrian federal state rather resembles a centralized state with elements of decentralization. The institutional and organizational interlacing of the levels of the Federal Government and the Länder demands a high degree of cooperation, which is observed with the aid of formal instruments. The development of the health care system and health reforms after �945 are thus the result of negotiations between the regional authorities with the aid of these instruments (see Section �.2 on historical background).
Economic development
Economic growth in Austria has been weak since the start of the new millennium. In 200�, annual real growth in Austria (0.8%) was clearly below the average for the �2 countries of the eurozone (�.7%). In the two subsequent years, however, there was a stronger increase in gross domestic product (GDP) than in the eurozone, particularly in 2003. After an increase of 2.4% in 2004 and a decrease in 2005, real economic growth will only accelerate again in 2006 to a rate of 2.3% (Table �.�). The economic growth forecast in Austria for 2005 and 2006 is slightly above that of the eurozone. Economic growth is estimated at 2.2% for 2007 in Austria as well as the eurozone. In comparison to the United States, however, Europe is clearly lagging behind in economic terms (Table �.2).
After total employment exceeded 3 million people in Austria for the first time in �999, a further increase in the number of employees is expected until 2007 after a temporary fall in 200�–2002. The unemployment rate (EUROSTAT calculations), at around 5%, is the third lowest in the EU1 behind Ireland and
1 In this document, “EU countries” are the 25 countries which were EU Member States after � May 2004. They comprise the �5 countries that were already EU Member States before May 2004 and the �0 countries which joined the EU on � May 2004.
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Luxembourg, but is rising continuously. An improvement of the situation in the Austrian employment market can only be expected after 2006. An increase of �.4% is forecast in labour productivity for the coming years. As the most important sources of funding for the health care system, wages and salaries are expected to rise by over 3% from 2005 onwards, a higher increase than in the previous years. However, this increase is smaller when related to individual workers, as the forecasts are based on further growth in employment levels.
Table 1.1 Economic indicators, 2000–2007
2000 2001 2002 2003 2004 2005a 2006a 2007a
Real gross domestic product (at 2000 prices), € billion 210.4 212.1 214.2 217.2 222.5 226.8 232.0 237.0
– Change in % – 0.8 1.0 1.4 2.4 1.9 2.3 2.2
Nominal gross domestic product, at market prices, € billion 210.4 215.9 220.7 227.0 237.0 246.1 256.2 265.7
– Change in % – 2.6 2.2 2.8 4.4 3.8 4.1 3.7
Consumer price index
(basis: 1986=100) 138 141 144 146 149 152 155 157
– Change in % – 2.7 1.8 1.3 2.1 2.3 1.8 1.6
Dependent active employees in 1000 3 054 3 067 3 052 3 057 3 079 3 110 3 138 3 160
– Change in % – 0.4 -0.5 0.2 0.7 1.0 0.9 0.7
Wages and salaries according to national accounts, at current prices, € billion 107.2 109.3 111.2 113.7 116.6 120.5 125.1 129.4
– Change in % – 1.9 1.8 2.2 2.5 3.4 3.8 3.4
Wages and salaries per active employee in 1000 35.1 35.6 36.5 37.2 37.9 38.7 39.9 40.9
– Change in % – 1.5 2.3 2.0 1.8 2.3 2.9 2.7
Unemployment rate (national definition), in % 5.8 6.1 6.9 7.0 7.1 7.3 7.2 7.3
– Absolute differentials – 0.2 0.8 0.1 0.1 0.2 -0.1 0.1
Unemployment rate (EUROSTAT definition), in % 3.7 3.6 4.2 4.3 4.8 5.2 5.3 5.3
– Absolute differentials – -0.1 0.6 0.1 0.5 0.4 0.1 0.0
Labour productivity per employee 6.9 6.9 7.0 7.1 7.2 7.3 7.4 7.5
– Change in % – 0.4 1.5 1.2 1.7 0.9 1.4 1.4
Source: Institute for Advanced Studies, 2005 (3).
Note: a Forecast values.
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Table 1.2 Forecast development of real GDP, annual percentage change, 2005–2007
Sources: Eurozone and USA: OECD, 2005 (4); Austria: Institute for Advanced Studies, 2005 (3).
Note: a 12 Member States of the European Monetary Union.
2005 2006 2007 Austria 1.9 2.3 2.2
Eurozonea 1.4 2.1 2.2
United States 3.6 3.5 3.3
In order to ensure participation in the European Economic and Monetary Union, Austria’s fiscal deficit (net financial requirement) was reduced to slightly below 2% (�997) of GDP with the aid of budget consolidation measures adopted in �996 and �997 – these mainly affected the public health and welfare system (see Chapter 6 on health care reforms). After a budget surplus of 0.3% in 200�, the fiscal deficit again rose above �% in 2003 and will rise to 2% in 2005 according to forecasts at the time of writing (5).
The development of the health care system is strongly dependent on the development of the economy as a whole. The health sector is growing faster than GDP, not only in Austria, but in almost all developed countries. Table �.3 shows the development of the individual components of GDP in the last four decades. This enables us to examine how growth in health expenditure has developed in comparison to GDP (without the health care sector). The highest
Table 1.3 Development of health care expenditurea in the period 1960–2000
1960 1970 1980 1990 2000 Per capita GDP at 1995 prices 7 025 11 557 16 295 20 139 24 589
– Growth in % – 64.5 41.0 23.6 22.1
Per capita health care expenditure at 1995 prices 300 610 1 242 1 431 1 903
– Growth in % – 103.3 103.6 15.2 33.0
Per capita GDP minus health care expenditure at 1995 prices 6 725 10 947 15 053 18 708 22 687
– Growth in % – 62.8 37.5 24.3 21.3
Health expenditure as % of GDP 4.3 5.3 7.6 7.1 7.7
– Growth in health care expenditure as % of GDP growth – 6.8 13.3 4.9 10.6
Sources: OECD Health Data, 2005 (7); Statistics Austria (8); Hofmarcher et al., 2004 (6).
Notes: GDP: Gross domestic product; a health care expenditure according to the European System of National Accounts 1995.
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increases in health expenditure can be observed in the �960s and �970s: per- capita spending on health doubled in each decade. In the �980s, which were characterized by economic crises and spending cuts, expenditure rose by only a moderate �5% before growth doubled again in the �990s.
Very little of the GDP growth obtained between �960 and �970 (6.8%) and between �970 and �980 (4.9%) was used for the health care system (Table �.3). Between �990 and 2000, however, growth in health expenditure as a proportion of GDP growth was higher and amounted to more than double that of the �980s (6). This was partially due to the slowing down of economic growth.
Population and health status
Table �.4 shows some basic (aggregate) population figures and indicators about the aggregate health status of Austrians. In 2003, the Austrian population was 8.�� million, of whom 65.8% lived in urban areas in 2002. The population growth rate in Austria is above the EU average (3.�%) at a rate of 5.0% since �990. In 2003, the total fertility rate (�.42) in Austria was just below the EU average of �.45. The proportion of the population over 65 rose by 0.8% to �5.7% in the period �990–2004, whereby a particular increase in the proportion of the male population over 65 can be observed. The dependency ratio2 was 47.4% in 2002 and is forecast to rise to 69.4% by 2030.
Since the mid-�990s, the health behaviour of Austrians has improved in almost all areas. Not only dental health has developed favourably; the amounts of vegetables and fruit eaten has also increased. However, the consumption of fats has also risen slightly. In addition, the proportion of smokers has increased by �.5 percentage points from 27.5% (�990) to 29.0% (2000). Total cigarette consumption, however, is falling.
The incidence of work-related diseases almost halved between �990 and 2004; the prevalence of work accidents and mortality due to accidents at work is also significantly lower in the period observed. This is also the case for the prevalence of traffic accidents and mortality due to transport accidents, which in 2004 were only about half of the level reached in �990 (Table �.5).
Table �.6 shows the most significant causes of death in Austria, ranked according to the frequency of (age-standardized) mortality of the international classification of diseases (ICD-�0) main diagnoses in 2003. Diseases of the circulatory system (particularly ischaemic heart diseases and cerebrovascular diseases such as strokes and cerebral thrombosis) were still among the leading
2 The dependency ratio used by the United Nations relates the number of those aged under �5, plus the number of those aged 65 and older, to the number of those aged between �5 and 65.
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Table 1.4 Population and health status, 1990 and 2004
1990 2004 Index 1990=100 Total Men Women Total Men Women Total Men Women
Population, in 1 000 7 729 3 711 4 018 8 175 3 939 4 205 105 106 104
% under 15 years 17.4 18.7 16.3 16.2 17.1 15.4 93 91 94
% over 65 years 14.9 10.8 18.8 15.7 12.7 18.6 105 118 99
Birth rate (live births per 1 000 inhabitants) 11.7 12.5 10.9 9.7 10.2 9.1 83 82 83
Total fertility rate (children per woman) – – 1.5 – – 1.4 – – 97
Average fertility age (in years) – – 27.2 – – 28.8a – – 106
Infant mortality per 1 000 live births 7.8 – – 4.5 – – 57 – –
Crude death rate per 100 000 inhabitants 10.7 10.3 11.1 9.1 8.7 9.4 85 84 85
Age-standardized death rate per 1 000 inhabitants 8.1 10.7 6.4 6.2 7.9 4.9 77 74 76
Life expectancy at birth 76.0 72.5 79.1 79.5 76.5 82.2 105 106 104
Source: European Health for All database, January 2006 (9).
Note: a 2003.
Table 1.5 Selected indicators of morbidity, mortality and lifestyle, 1990 and 2004
1990 2004 Index 1990=100 Decayed, missing or filled teeth at the age of 12 (DMFT-12 Index) 4.2 1.0a 24
Consumption of fat per person per day (in grams) 155 158a 102
Average amount of fruit and vegetables consumed per person and day (in kg) 207 225a 109
% of regular daily smokers, above the age of 15 27.5c 29.0b 105
Number of cigarettes smoked per person per year 1 788 1 260b 70
– SDR, selected smoking-related causes, per 100 000 315 222 70
Consumption of pure alcohol, litres per capita 11.8 10.5d 89
– SDR, selected alcohol-related causes, per 100 000 123 70 57
Persons killed or injured in road traffic accidents, per 100 000 803 712d 89
– SDR, transport accidents, per 100 000 18 10 56
New cases of occupational diseases, per 100 000 43 26 60
Persons injured due to work-related accidents, per 100 000 2 680 1 668 62
Deaths due to work-related accidents, per 100 000 2.6 1.3d 63
Source: European Health for All database, January 2006 (9).
Notes: SDR: Age-Standardized death rate; a 2002; b 2000; c 1991; d 2003.
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Health systems in transition Austria
causes of death in Austria. It is worth pointing out, however, that the age- standardized mortality figure of this group of diseases has more than halved in the last three decades. A similarly marked decrease in mortality can also be established in the case of external causes of morbidity and mortality (particularly traffic accidents and self-inflicted injury), diseases of the respiratory tract and diseases of the digestive system. An even greater reduction (around two thirds) can be observed in the group of illnesses of the urogenital system and of certain infectious and parasitic diseases. The highest rise in mortality between �970 and 2003 can be observed in mental illnesses and behavioural disorders, diseases of the nervous system and of the eyes and the eye appendix. These illnesses have primarily begun to have an impact since the start of the �990s. The only other principal diagnosis group which shows an increasing mortality rate is that of endocrine and metabolic diseases and nutritional disorders. This group is dominated (84%) by diabetes mellitus, for which the mortality rate has doubled since �970 (though this figure is higher partly due to changes in documentation).
Between �980 and 2004, the fall in age-standardized mortality was higher in Austria (by 39%) than the average for the EU (28%). The difference in the decrease of age-standardized mortality due to cancer was particularly noticeable. Whereas the number of cancer deaths in Austria between �980 and 2004 fell by 20% from 2�3 to �70 per �00 000 inhabitants, the EU average decreased significantly less (by 8%) (9).
Self-assessed health varies by gender and level of education. A special survey on self-reported health was performed as part of the Austrian microcensus on two occasions, in �99� and �999. The participants of the survey assessed their health on a five-point scale. Men and women with university degrees felt significantly better than people with a lower level of education: with regard to women, the proportion of those who considered their health to be very good was (age-standardized)3 almost 8% higher for university graduates than for those who had only completed mandatory schooling or an apprenticeship. In the case of men, the difference was over �0% (Fig. �.2).
In the time period observed (�99� and �999), the difference between the educational-level groups seemed to decrease a little, although the feeling of well-being increases in total: there are comparatively more healthy people who have completed mandatory schooling, an apprenticeship or attended vocational secondary schools, but little change in the number of very healthy graduates or those who have passed the school-leaving examination. Fewer people with a low level of education indicated that they feel very unhealthy or unhealthy,
3 In order to avoid distortion due to different education levels and age structures, all figures were standardized on the basis of the age structure of the Austrian population in �999.
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AustriaHealth systems in transition
Table 1.6 Leading causes of death (ICD-10), age-standardizeda per 100 000 inhabitants, 1970–2004
1970 1980 1990 2000 2001 2002 2003 2004 1970 =
100
Diseases of the circulatory system (I00–I99) 559.2 515.2 389.5 315.3 297.8 289.1 270.7 248.3 44
– Ischaemic heart diseases (I20–I25) 206.5 152.9 153.4 132.2 125.2 130.8 124.0 115.8 56
– Cerebrovascular diseases (I60–I69) 176.2 150.3 98.9 67.8 61.9 62.3 56.2 42.8 24
Malignant neoplasms (C00–C97) 228.3 213.1 199.9 174.2 169.1 170.8 172.7 170.8 75
– of the trachea, bronchi, lungs (C33–C34) 34.6 35.6 34.5 32.7 31.5 33.4 31.9 32.2 93
– of the breast (C50) 26.5 29.3 32.4 27.6 25.9 26.0 26.2 24.6 93
– of the cervix (C53) 6.6 6.4 4.1 2.5 2.3 3.3 2.9 2.9 44
External causes (V00–Y99) 103.5 85.7 63.6 47.6 44.9 46.1 44.5 42.5 41
– Suicide and self-inflicted injury (X60–X84) 24.8 25.1 21.7 17.5 16.3 17.0 15.8 15.2 61
– Transport accidents (V01–V99) – 25.3 18.4 11.0 10.9 11.0 11.0 9.8 39
– Motor vehicle accidents (V02–V04, V09, V12–V14, V20–V79, V82–V87, V89) 33.3 23.6 16.7 10.0 9.7 10.1 10.2 9.1 27
Diseases of the respiratory system (J00–J99) 99.0 50.4 38.6 32.9 30.9 32.5 40.3 34.7 35
– Bronchitis, emphysema, asthma (J40–J46) 28.8 17.7 18.5 9.3 8.5 20.9 25.5 21.7 75
Diseases of the digestive system (K00–K93) 69.5 61.0 44.3 33.3 31.9 33.9 33.9 30.8 44
– Chronic liver diseases and cirrhosis (K70,K73,K74,K76) 27.7 29.2 26.0 19.7 18.9 17.7 18.3 17.8 64
Endocrine and metabolic diseases, nutritional disorders, disorders involving immune mechanisms (E00–E90) 20.0 13.8 21.0 12.8 13.0 20.3 29.9 36.5 183
– Diabetes mellitus (E10–E14) 16.7 12.1 18.7 11.4 11.6 16.8 25.0 29.7 178
Mental and behavioural disorders, diseases of the nervous system and the sensory organs, diseases of the eyes and the eye appendix (F00–H95) 16.4 13.2 15.8 14.3 15.1 23.2 26.4 22.4 137
Diseases of the genitourinary system (N00–N99) 26.1 16.0 8.9 6.8 7.6 8.0 8.5 9.1 35
Certain infectious and parasitic diseases (A00–A99, B00–B99) 14.8 7.2 3.6 2.5 2.3 4.7 5.5 5.1 34
All causes of death 1 206.2 1 015.7 810.5 658.5 632.6 649.6 652.3 620.1 51
Sources: European Health for All database, January 2006 (9); IHS HealthEcon calculations, 2006 (http://www.ihs.ac.at).
Note: a Age-standardized mortality reflects the crude death rate in Austria, adjusted for the age structure of the population of the European Union.
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Health systems in transition Austria
while the proportion of those who feel very unhealthy or unhealthy in individual groups with higher levels of education increases somewhat. In view of the very high levels of participation in education, this still signifies that the number of the very healthy, for example graduates, has risen, but the “elite effect” of education on health has not further increased. The average perceived well-being of the population across all educational groups is therefore rising. Irrespective of the level of education, for example, an almost equally high proportion of men indicated a very good state of health in both years (�99�: 24.9% compared to �999: 25.2%), but a markedly lower proportion indicated a very poor or a poor state of health (�99�: 6.�% compared to �999: 5.2%). On average, women who assessed their health as very good increased while those whose assessment was that their health was (very) poor decreased (Fig. �.3). In summary, the gap between the – self-assessed – better health of men and poorer health of women has decreased (10).
Viewed in an international context, these findings are very positive for Austria: there is evidence that the health gap between socioeconomic groups has actually increased in some European countries in the last decades (11,12).
1.2 Historical background
Social security before the introduction of social insurance
Since the late middle ages the so-called Ausgedinge, a flat rate income paid when they retired and transferred ownership of their holdings, had been the most important form of security for free farmers in rural areas against the risk of inability to work. For skilled tradesmen in the towns, however, there was no Ausgedinge. Skilled urban tradesmen had the choice of either carrying out their trades for the whole of their lives or moving into one of the numerous houses for the poor or hospitals in the towns. Those who had money could buy themselves into a citizens’ hospital (Bürgerspital), for example via a life annuity contract (15). A further possibility was to pay into a guild shop maintained by master craftsmen and qualified workers. After guild-based organizations had almost completely collapsed, savings banks and private insurance associations developed, as well as a number of private welfare and charity associations. Various occupational groups had their own pension and insurance institutions; in Vienna there was a special “action and catering institution”. The savings bank system had its origin in the idea of the formation of financial reserves for
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Fig. 1.2 Self-assessed health status (“very good”) according to levels of education and gender, 1991 and 1999, in %, age-standardized
Sources: Statistics Austria, 1991 (13); Statistics Austria, 1999 (14); IHS HealthEcon calculations, 2005 (http://www.ihs.ac.at).
0
10
20
30
40
Compulsory schooling,
apprenticeship
Vocational secondary
school
Post-secondary education
University Total
H ea
lth st
at us
Men 1991 Men 1999 Women 1991 Women 1999
Fig. 1.3 Self-assessed health status (“poor and very poor”) according to levels of education and gender, 1991 and 1999, in %, age-standardized
Sources: Statistics Austria, 1991 (13); Statistics Austria, 1999 (14); IHS HealthEcon calculations, 2005 (http://www.ihs.ac.at).
0
2
4
6
8
Compulsory schooling,
apprenticeship
Vocational secondary school
Post-secondary education
University Total
H ea
lth st
at us
Men 1991 Men 1999 Women 1991 Women 1999
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Health systems in transition Austria
times of hardship, having free access to the deposits made, and the fact that the concept had universal appeal (16).
The mining law cooperatives are the oldest form of welfare organization and appeared from the late middle ages onwards as welfare associations for miners (miners’ health insurance and pension scheme). State legislation then stipulated that risk sharing pools were to be based on joint contributions by employers and employees. Nevertheless, payments by employers tended to be seen as welfare rather than partnership. The General Mining Act of 23 May �854 brought a reform of the miners associations’ insurance funds (Bruderladen) which had run into considerable difficulties, but there was still no legal obligation for employers to make contributions. In �885, employers’ contribution payments only amounted to an average of around 26% of the total assets of the Bruderladen. The Trade Regulation of �859 brought about the creation of factory and cooperative funds. For self-employed tradesmen, master craftsmen’s health insurance funds were introduced in the second half of the �9th century, without mandatory membership.
The development of the health care system in Austria is closely connected to the establishment of a welfare state within the territory of the Austro-Hungarian Monarchy from �867 onwards. The �867 Associations Act facilitated the formation of association-based funds. In this way, the general workers’ health and invalidity relief fund was founded in �868. In �873, the association of the general workers’ health and invalidity relief funds was founded (17). As early as �872, at the Berlin Conference on workers’ issues, the Prussian and Austrian bureaucrats present voiced their support for mandatory health and examination funds financed by contributions from employees and employers. However, Bismarck’s social reforms were rejected by liberals and Austrian employers, but also by left-wing liberal social policy experts and social democrats (17). A high point in workers’ protection regulations at the time was the amendment to trade regulations in �885. The most important provisions were: the introduction of a standard eleven-hour working day, regulations regarding breaks, free Sundays and holidays as well as additional regulations governing youth labour and women. Workers’ protection was viewed as a necessary and even a priority element of social policy.
The Association of Austro-Hungarian Workers, Health and Invalidity Relief Organizations, formed in �876, was one of the first associations of health insurance funds. Its founding members were �6 funds from Atzgersdorf, Gloggnitz, Graz, Hainburg, Inzersdorf, Klagenfurt, Linz, Mauthausen, Neunkirchen, Steyr, Ternitz, Wels, Vienna, Brno, Reichenberg (Silesia) and Budapest (only by agreement). This development was based on mutual agreements between the workers’ insurance funds (membership periods in other funds were mutually recognized), which made it easier for workers to
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move between individual companies. Without this, entitlements would have been lost, or waiting periods would have had to be accepted when taking on new employment (18).
Imperial Sanitary Act and Supreme Health Board
The legal roots of the Austrian public health service (see Section 4.� on public health services) lie in the Imperial Sanitary Act of �870 (19), which is still valid today and established the essential tasks to be fulfilled in the fields of sanitary supervision and epidemic hygiene. As early as the time of Empress Maria Theresia (�740–�780) there was a supreme health authority (Court Sanitary Delegation), in which all the members had equal voting rights and which was directly answerable to the Empress. In the crown countries there were Sanitary Commissions which were subordinate to the health authorities. In the course of the development of Austria into a constitutional state, which began in �848, ministries led by answerable ministers took the place of the former central authorities with their system of decisions based on equal voting rights. The tasks of the Court Sanitary Delegation were integrated into the Ministry for the Interior while the Sanitary Commissions were placed under the control of the Länder governments. A resolution passed in �852 established District Offices as the lowest sovereign authorities. The Local Communities Act of �862 declared that the deployment of the sanitary police was the responsibility of the local communities. The three-pillared structure of state administration which still exists today was thus created (20).
The introduction of the Federal Constitution of �929 in the year �945 altered the distribution of powers which had been set out for the public health service by the Imperial Sanitary Act. Through the division of the state’s sphere of activity into two parts, the implementation of federal government agendas was limited and, with the exception of purely local matters, delegated to the Länder (20). Legislation and its implementation in the health care system was from then on the responsibility of the Federal Government, with the exception of mortuaries and funerals, municipal public health services and the ambulance service, for which the legislation and its implementation became the responsibility of the Länder (see the introductory overview, Section �.�). In the hospitals sector, the competency of the Federal Government is restricted to basic legislation and to sanitary supervision. The Imperial Sanitary Act stipulates that authorities should make their decisions only after consultations with experts. This is the material basis for the establishment of the Länder health boards and the Supreme Health Board.
The founding of the Supreme Health Board (see Section 2.� on organizational structure of the health care system) dates back to the Imperial Sanitary Act
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of �870. In spring �869, a working meeting of 40 specialists from the crown countries of the monarchy was called. It was made up of scientists, experts on hospitals, medical journalists, specialists in forensic medicine and Länder sanitary experts. It was chaired by Karl von Rokitansky, who is considered to be the founding father of the Supreme Health Board. The aim of the meeting was to organize the public health service and to prepare fundamental legal provisions (19). The basis for the discussions was a questionnaire which was distributed throughout the monarchy and provided information about the provision of medical care in the local communities, districts and Länder. The committee, which was composed of experts from various fields of medical science, had the task of advising the responsible minister on issues relating to the health of the population.
The introduction of social insurance
In �887/�888, the industrial accident and health insurance scheme for workers was introduced following the model of Bismarck’s social policy programme. The scheme would become the foundation of today’s social security system. These measures were first considered as early as �882 and led to a new, previously unknown path being taken in Austrian legislation: the introduction of statutory mandatory insurance. Social health insurance provided for free medical treatment, medicines and appropriate sick pay, while work accident insurance provided for injured persons’ and survivors’ benefits. Workers themselves funded two thirds of the costs of the system (mandatory insurance), while the other third was financed by employers. The social and health insurance scheme was administered by self-governing bodies, and did not receive any government subsidies. In �889, a law on miners’ associations (Bruderladen) was adopted which established health insurance and pension insurance schemes for workers in the mining industry. This law also fulfilled the demand for the separate management of the financial accounting of the two insurance branches. A further measure ensured that members were allowed to have their shares of the reserves of the previous fund transferred to the new fund when moving from one miners’ association to another one (21).
One of the reasons for the introduction and the necessity of social insurance was the poor state of health of conscripts and the social situation of wage earners (17: 344). The �887 Workers’ Accident Insurance Act (Imperial Law Gazette �/�888) created for the first time a statutory insurance institution. This insurance institution was structured territorially and was run by a board of management under state supervision. In spite of the recognition in principle of the institution’s autonomy, the state’s bureaucracy continued to exercise considerable influence (15: footnote 75). In the same year, the Workers’ Health Insurance Act of 30
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March �888 was proclaimed. The organization of health insurance funds was in accordance with German law until the end of the First World War.
Until the First World War, these achievements were largely maintained and indeed were extended by the introduction of work accident insurance for railway workers. The Active Service Act, which was valid during the First World War, suspended employee protection provisions, but some progress was achieved in the field of social insurance (an increase in sick pay and the extension of sickness benefit, as well as the abolition of workers’ contributions to work accident insurance).
In the second half of the �9th century, private white-collar workers (private officials) – owing to the increasing number of large companies with bureaucratic organizations – started to constitute a separate social group. In two petitions to the Imperial Parliament, the introduction of mandatory pension, invalidity and surviving dependant’s insurance was demanded, and in �906 the Act regarding Pension Insurance for Private White-collar Workers and some Public Employees received the Emperor’s official approval. It did not include either a payment guarantee on the part of the state or government subsidies. Notable aspects of this law are the principles of mandatory insurance and unlimited independent registration. Those liable for mandatory insurance were divided into six salary groups, and contributions were paid as fixed premiums of varying amounts according to the salary groups. In the lower four salary groups, the liability to pay contributions was divided between employer and employee in a ratio of two thirds to one third; in groups 5 and 6 it was halved.
The �906 Pension Insurance for White-collar Workers Act was subject to numerous challenges. The lack of clarity of the term “white-collar worker” was particularly criticized owing to the fact that there was no clear listing of job features, and also because of the insufficient level of the minimum pensions. In the �9�4 amendment to the Pension Insurance Act for White-collar Workers, the principle of independent registration was largely abandoned. In addition, a demonstrative list of job features was adopted to establish or liability for mandatory insurance or to exclude it.
In �9�8 there were a total of more than 600 health, pension and work accident insurance institutions in the territory of modern Austria alone. Hundreds of these were health insurance funds for blue-collar workers, white-collar workers, and workers in agriculture, commerce and trade, etc. This fragmentation was also reflected in a range of umbrella organizations which were organized according to professions, regions or other criteria (language groups, political persuasion). In comparison to today’s organizations, they only assumed a small number of common tasks (18).
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Social insurance and the First Republic, 1918–1933
The collapse of the Austro-Hungarian Monarchy and the rise of the social democratic movement led to an extension of the social security system. This included the introduction of unemployment insurance in �920, and the extension of health insurance to all people with employment contracts, service contracts or waged work, and the inclusion of family members. Following the example of (workers’) insurance provisions, the �920 Unemployment Insurance Act stipulated that contributions would be divided into three parts, with the employer, the employee and the state each paying a third. In addition, unlike earlier unemployment welfare, this law limited the normal duration of support to �2 (or a maximum of 20 or 30) weeks. The �926 White-collar Workers Insurance Act regulated health, work accident and pension insurance for white-collar workers in the private sector. This law introduced the concept of division according to professions: the previous special laws for individual insurance branches were replaced by a structure arranged according to professions, with the simultaneous integration of all insurance branches. Insurance law for white-collar workers thus took the pioneering step towards occupational social insurance (for skilled workers this was only enacted by the 9th amendment to the General Social Security Act (ASVG) of �962).
A year later, the Blue-collar Workers Insurance Act was revised (regarding health, industrial accident and accident invalidity insurance), and the Farm Labourers Insurance Act (�928) was passed. Mandatory insurance as defined by the Blue-collar Workers Insurance Act extended to all employees, with the exception of those in agriculture and forestry and private and public white-collar workers. In addition, unemployment insurance was entirely excluded from this law. However, owing to the difficult economic situation, the Blue-collar Workers Insurance Act could not come into effect immediately. Its enactment was left to a decree which was to be issued when: (a) the number of those receiving unemployment benefit or emergency assistance fell below a yearly average of �00 000; and (b) when there was a recognizable improvement of the general economic situation, so that the additional burden on the economy and public administration caused by the implementation of the Blue-collar Workers Insurance Act would be compensated for. Owing to the worsening economic situation, the fulfilment of this so-called “prosperity proviso” soon seemed improbable, and in �929 the enactment of the Blue-collar Workers Insurance Act was linked to an easing of the burden on the economy through reforms in the public tax system; owing to the financial plight of the Länder and the Federal Government, this also proved unviable. In the longer term, only the section on “elderly welfare pensions” (long-term receipt of pensions for people over 60, at around two thirds of the level of unemployment benefit) remained the only
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practical improvement in connection with the Blue-collar Workers Insurance Act. Whereas only 7% of the population had health insurance in �907, this figure had risen to 60% in �930 (17: 35�).
In �925, there were still �86 health insurance institutions – apart from the agricultural health insurance institutions and the health insurance departments of the miners’ welfare associations – of which �4 did not issue (or no longer issued) formal insurance certificates. The statistics of the Ministry of Social Affairs recorded �72 health insurance institutions at the time (22) (Table �.7).
Table 1.7 Number of health insurance funds, 1925
Source: Federation of Austrian Social Insurance Institutions (18).
District health insurance
funds
Company health
insurance funds
Cooperative health
insurance funds
Association- based health
insurance funds
All health insurance
funds
Active Existing Active Existing Active Existing Active Existing Active Existing
Vienna 2 2 3 8 34 34 9 9 48 53
Lower Austria 16 18 11 11 8 9 1 1 36 39
Upper Austria 3 3 1 2 2 2 4 4 10 11
Salzburg 1 1 1 3 1 1 1 1 4 6
Styria 18 18 10 10 1 1 4 4 33 33
Carinthia 10 10 3 3 1 1 1 1 15 15
Tyrol 10 11 2 3 2 2 7 8 21 24
Vorarlberg 4 4 – – – – – – 4 4
Burgenland 1 1 – – – – – – 1 1
Austria 65 68 31 40 49 50 27 28 172 186
Social insurance and the corporative state (“Ständestaat”)
After the end of the First World War, laws were created for the respective occupational groups for all categories of insurance, including unemployment insurance. The self-employed were not included, or only to a marginal degree. The influence of the social-corporative principle became evident for the first time in the �920s, with the creation of a health insurance institution for state and federal employees (23). Until �933, the election of insurance representatives had taken place by direct vote. The corporative state abolished these elections and from that time on the appointment of insurance representatives was carried out by the statutory representative bodies (17: 23ff). The self-governmental administration of the social insurance institutions continued as before. In �933, the miners’ welfare associations were dissolved and their insurance reserves were transferred to the Miners’ Insurance Fund established at the Workers’ Accident Insurance Institution in Graz.
20
Health systems in transition Austria
The effects of the world economic crisis reached their peak in the years �932/�933. Owing to high unemployment and falls in real wage levels, the collapse in economic performance had a severe effect on the revenue of the social insurance system. An attempt to solve the financing problems was made by introducing the Social Insurance for the Self-employed Act (GVSG), and also via the introduction of mandatory health insurance contributions for the recipients of pensions. Furthermore, there were massive cuts in expenditure. This included the reduction of sick pay and the limitation of family insurance. In addition, the possibility to provide voluntary benefits was brought to an end and the salaries of the social insurance institutions’ employees were reduced. The aim was to contain increases in spending via administrative measures and benefit cuts (17: 270).
In �935, the GSVG was introduced. This law effectively marked the completion of the development of the social insurance system (14). At an organizational level, numerous drastic measures were taken, such as combining the white- and blue-collar workers’ health insurance funds into an Imperial Association (Section 3 of the GSVG) and joint ventures (Section 4 of the GSVG). The joint ventures were an organizational novelty. Their task was to ensure the availability of nursing care, medical treatment and the provision of medicines and medical aids (17: 269). The territorial work accident insurance institutions were abolished. The Blue-collar Workers’ Insurance Institution assumed responsibility for welfare for elderly blue-collar workers. Together with various special insurance institutions, the White-collar Workers’ Insurance Institution retained responsibility for the entire white-collar workers’ insurance system (24).
Social insurance and National Socialism
On � January �939, the following German laws came into force in Austria: the Imperial Insurance Regulations of �9��, the White-collar Workers Insurance Act of �924, the Imperial Miners’ Act of �926 and the Employment Agency Act of �927. It was expressly declared that mandatory health insurance for pensioners from the white-collar workers’ and the miners’ insurance schemes, which did not exist in German imperial law, was to be continued. A decree established that the blue-collar workers’ pension insurance scheme in Austria should be applied in accordance with the principles of imperial law. The organization of health insurance according to occupational groups was abolished during national socialism, and the white- and blue-collar workers’ (regional) health insurance funds were merged (25). Their self-governing structures were
2�
AustriaHealth systems in transition
abolished. According to the “leadership principle”, a leader was appointed for each body; he was supported by an advisory council and bore sole responsibility for management (17). Basically, only the organizational structure of the health insurance institutions remained intact (15). In health insurance, some provisions (which went beyond those of the imperial insurance regulations) on benefits and on insurance coverage were maintained. For example, a longer period of entitlement to sick pay was provided for in the legislation. Equal sharing of the raising of funding was also maintained. Austrian health policy was pervaded by a desire to avoid hereditary disorders. This was expressed in laws which facilitated sterilization for “the prevention of sick offspring” and provided for a ban on marriage in the case of certain diseases (17: 293).
War policy initially had no negative effect on social insurance. For example, the reduction of pensions and child benefits introduced by an emergency decree in �932 were reversed, and health insurance was introduced in the invalidity and pension insurance schemes (17: 293). Conversely, Austrian work accident legislation influenced German legislature, which led to mandatory work accident insurance being taken on in Germany in �942. Legal protection for expectant and nursing mothers was also extended in Austria. Both the group of individuals included in social insurance and the level of benefits were maintained, or extended in the case of health insurance for pensioners. These improvements were characterized as “bribery policy” (18: 297), which is confirmed by current historical research that has identified them as measures to integrate national socialism into domestic policy (26).
In spite of the efforts to pick up the thread of the achievements of the First Republic, the social policy developments between �933 and �945 did have effects on social policy in the Second Republic. This primarily includes the consensus that “social policy developments are dependent on economic possibilities at the respective time. This ‘policy of objectivity’ is a part of the social policy positions of all stakeholders who play a role in decision-making in the second republic” (17: 304).
After the end of the Second World War, German legislation remained dominant until the coming into effect of the ASVG in �956. However, the Social Insurance Transition Act of �947 (Federal Law Gazette No. �42/�947) constituted an important step on the way to “making social insurance law Austrian again” and to restoring its self-governmental structure (15). The holding of direct elections was not reintroduced. The most important piece of post-war legislation in Austrian social insurance was the General Social Security Act of 9 September �955 (Federal Law Gazette No. �89/�955).
22
Health systems in transition Austria
Social Insurance Transition Act 1947
After the end of the Second World War and the restoration of the Republic of Austria, the Social Insurance Transition Act of �2 June �947 laid a new organizational basis for social insurance. The most important measure was the reintroduction of self-governance as well as the establishment of the Federation of Austrian Social Security Institutions (HVSV) (15), which united health insurance, work accident insurance and pension insurance under one roof. The aim was the establishment of a “people’s insurance”. Whereas around two thirds of the population were insured in �946, this figure had risen to 96% in �980 (17). This increased coverage was, for example, achieved by the introduction of the Act on Health Insurance for Farmers in �965 and the Civil Servants’ Health Insurance Act in �967. Unrestricted access to hospital care, preventive check-ups, examinations for young people and rehabilitation were introduced as new services.
The General Social Security Act 1956
The ASVG, which came into force on � January �956, replaced the previously valid laws in the field of social security. It integrated health, work accident and pension insurance for blue- and white-collar workers in industry, mining, commerce and trade, transport, agriculture and forestry, and also regulated health insurance for pensioners. For some special areas of insurance, social insurance laws outside the scope of the ASVG continued to be valid (Table �.8).
Contrary to the originally planned, staged introduction of the ASVG, the Federal Ministry of Social Administration had decided to present a draft bill which would regulate the entire field of social insurance legislation. This was approached on the basis of the following principles (27).
The regulation of general social insurance for blue- and white collar workers and groups of self-employed individuals who had the same status in social insurance law. Not included in the