Austria: #18 in the 2020 World Index of Healthcare Innovation

Introduction

Austria ranks 18th in the World Index of Healthcare Innovation, with an overall score of 46.59. Austria performed best on Choice (#9, 43.36), thanks to its strength in offering affordable options for coverage and care. Austria ranked 12th in Science & Technology (score: 40.90), thanks to its near-universal system of electronic health records.

On the flip side, Austria was average in Quality (#16, 58.57) and poor in Fiscal Sustainability (#23, 43.52), owing to its significant growth in public health care spending obligations.

Background

Austria, like many countries in central Europe, has a private health insurance-oriented health care system based on “Bismarckian” principles, so-called because the first of these systems was built in Germany by chancellor Otto von Bismarck in 1883. The Austro-Hungarian Empire followed suit in 1887. Many other countries descended from the Austro-Hungarian Empire, including Hungary, the Czech Republic, and Slovakia, also owe their lineage to the Bismarckian model.

Today, health care in Austria is governed both at the federal level and at the state (Länder) level. Austria has 18 private insurers, known as “sickness funds,” including at least one in each of the nine Länder.

Maximum drug prices are capped by the federal government, but direct negotiation of drug prices is done by the health insurers’ trade association, the Main Association of Austrian Social Security Institutions (Hauptverband der österreichischen Sozialversicherungsträger, or HVB). For drugs that are not reimbursed by insurance, pricing is unregulated until a specific drug exceeds €750,000 in revenue in Austria. The utilization of generic drugs is low in Austria, because pharmacies are not allowed to substitute generic drugs for branded ones if the doctor prescribes the branded version.

Quality

Much like the rest of western Europe, Austria’s life expectancy is among the highest in the world at 81.5 years. Even so, its Quality ranking of #16 is mixed. While Austria has handled its response to the pandemic well, its ranking in measures of preventable disease (#17) is driven by lower scores in acute care survival, hospital admission rates, and cancer survival rates. Austria ranks above average in patient-centered care (#11), while its infrastructure scores lower (#17), with a high number of primary care doctors per capita contrasting with a low number of nurses per capita.

Choice

Of all the categories, Austria is strongest for Choice at #9. While Austria ranks in the middle of the Index on health insurance affordability and provider choice, it scores highly for access to new therapies (#5). Its access to new therapies is especially high given the country’s use of external reference pricing to limit the cost of drugs as well as Austria’s relatively smaller market.

Science & Technology

Though not the former medical innovation powerhouse it was during the Habsburg Empire, Austria nevertheless holds its own, ranking #12 overall for Science and Technology. The Science and Technology ranking includes #11 for medical innovation, #16 for scientific innovation, and #11 for health digitization. Even so, Austria has not had any Nobel laureates in chemistry or medicine/physiology in the last 20 years, either by nationality or within Austrian institutions.

Fiscal Sustainability

Austria ranks #23 overall for fiscal sustainability. In particular, Austria struggles to control its public health spending per capita (#26). On the bright side, Austria’s overall fiscal situation as well as its growth in public health spending are manageable, with a debt-to GDP ratio of 57% (#18) and public health spending at 7.7% of GDP (#14).