Austria: Health System Reforms and Challenges

“Major reforms aimed to address fragmentation of the health system. The main actors – the federal government, state governments and SHI funds– are now brought together in the target-based governance commission, which jointly establishes financial and health targets for 3-5-year periods, codified in so-called “target-based governance agreements”, and monitors progress.

“In 2020, a major reform reduced the number of SHI funds from 21 to 5, through a merger of nine regional and several company insurance funds into one major fund (Österreichische Gesundheitskasse – ÖGK), covering more than 80 % of the insured population, and mergers of the funds for self-employed people and farmers as well as the funds for civil servants and railway workers into now two funds. Although some steps have been taken towards convergence of benefits, differences still remain within the ÖGK and between funds, also because the merger did not change the legal framework for negotiation of contracts between SHI funds and state-level representations of healthcare providers. The reform was also criticised heavily for failing to provide mechanisms for achieving administrative cost savings of EUR 1 billion by 2023, which were announced as a major objective by the government at the time. In a recent report, the Federal Court of Auditors showed that administrative expenditure had in fact increased since the reform, at a rate comparable to a baseline scenario without the mergers (RH, 2022).”

Source: OECD/European Observatory on Health Systems and Policies (2023), Austria: Country Health Profile 2023, State of Health in the EU, OECD Publishing, Paris/European Observatory on Health Systems and Policies, Brussels.

“The health system in Austria is relatively effective in terms of avoiding deaths from causes that are treatable by timely and effective healthcare. However, although mortality from treatable causes was below the EU average in 2020, several EU Member States achieve even lower rates (Figure 13). Ischaemic heart disease, colorectal and breast cancers, and stroke were the main treatable causes of mortality, which could be reduced further through earlier diagnosis and timelier and more effective treatment.

“Preventable mortality in Austria was also lower than the EU average in 2020, but also still markedly higher than in the best-performing countries in the EU. The leading causes of preventable mortality are lung cancer, ischaemic heart disease and alcohol-related diseases, followed in 2020 by COVID-19. Chronic respiratory diseases are also a significant contributor to preventable deaths. The high prevalence of behavioural risk factors, including smoking, alcohol consumption and poor nutrition, contributes to these preventable deaths (see Section 3).”

“There are several challenges that continue to be addressed in the years ahead. The Austrian health system is among the most expensive in the EU. A large and increasing share of government spending is dedicated to health (15.6%), which is expected to increase further over the coming decades as a result of population ageing. At the same time, the Austrian health system is characterized by a complex structure with shared governance between the federal and the regional levels and many responsibilities delegated to self-governing bodies (of social insurance and providers), which ultimately results in fragmentation and inefficiencies. In particular, responsibilities for financing and service provision are split between federal and Länder governments for inpatient care and SHI [Social Health Insurance] for ambulatory (extramural) care. There is also fragmentation between the health care and the long-term care sectors, where an integrated vision is still needed.”

Source: Bachner F, Bobek J, Habimana K, Ladurner J, Lepuschütz L, Ostermann H, Rainer L, Schmidt A E, Zuba M, Quentin W, Winkelmann J. Austria: Health system review. Health Systems in Transition, 2018; 20(3): 1 – 256.

“Efforts have been made for several years to achieve more joint planning, governance, and financing, by bringing together the federal and the Länder level and coordinating these with SHI funds. The establishment of state health funds (Landesgesundheitsfonds, LGF) that pool resources for the financing of hospital care at the Länder level in 2005 has contributed to more coordination in the financing of hospital care. More recently in 2013, the introduction of the B-ZK and nine State Target-Based Governance Commissions (Landes-Zielsteuerungskommissionen), bringing together representatives of the three major public financing agents (federal government, state governments and SHI funds), has improved coordination and governance of the health system (see section 6.1.2). In addition, joint planning of health care (see section 2.5) through structural plans for health care is becoming increasingly important and is starting to overcome its traditional focus on (specialized) hospital care by including also ambulatory (extramural) care planning.

“However, despite the establishment of joint governance and planning mechanisms, the constitutional decision-making powers of the various players have remained essentially unchanged. As a result, coordination continues to be a challenge – not only with regard to the provision of inpatient and ambulatory (extramural) care but also with regard to rehabilitation and long-term care (LTC) (see sections 5.7 and 5.8).”

Austria: Health System Reforms and Challenges - National Policies - World Health Systems Facts

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Page last updated January 21, 2025 by Doug McVay, Editor.