Government resigns over rejection of national health service reform

In July 2008, a draft reform of Austria’s national health system was cancelled after the social democratic-conservative government coalition had failed to agree on the monitoring rights of a planned social insurance holding agency. In response, the social partners expressed their indignation, as they had jointly drawn up parts of the draft reform to secure the existence of the deficitary national health system in the long term. After this failure, the government resigned on 7 July 2008.

On 6 July 2008, the coalition government of the Austrian Social Democratic Party (Sozialdemokratische Partei Österreichs, SPÖ) and the conservative Austrian People’s Party (Österreichische Volkspartei, ÖVP) abandoned a comprehensive reform of Austria’s health service system, which was due to be presented to the parliament later in the month. The reform aimed to secure the future of the national health service, which is currently in deficit. The draft reform was largely drawn up by the social partners on behalf of the government. The joint social partner draft had been adopted – in a slightly amended version – by the government cabinet on 4 June 2008. The Austrian Chamber of Doctors (Österreichische Ärztekammer, ÖÄK), fearing substantial disadvantages for doctors bound by a service contract with a health insurance agency (Krankenkasse), strongly opposed these reform plans, together with many members of parliament from both governing parties. However, the health service reform eventually collapsed after coalition representatives failed to agree on the overseeing powers of a new health regulatory body.

Reform plan proposals

Social security holding corporation

The current Association of Social Security Providers (Hauptverband der Sozialversicherungsträger, HSV), deemed to be inefficient in streamlining the Austrian health insurance system, should be replaced by a new social security holding agency. Like the HSV, the new independent institution should include social partners and function as the central body administering all aspects of Austria’s social insurance system (AT0311201N). Apart from this, the planned institution was devised to define objectives to be reached by each of the social security providers (Sozialversicherungsträger), to issue guidelines and to grant budgets and large-scale investments. Moreover, it should be equipped with certain monitoring rights with regard to the social security providers.

Funding

Additional government funding of the country’s health insurance system worth €1.5 billion by 2012 should help reduce its burden of debts.

Cost saving and quality assurance measures

For doctors, who have a service contract with one of the sickness insurance agencies and whose services are thus covered by the public health insurance system, a series of measures aiming to save costs and ensure quality in the national health service system should be introduced. These measures included the following aspects:

• ‘Aut idem’ regulation – doctors have to prescribe generic pharmaceuticals instead of a certain (often more expensive) brand of medicine to a patient; moreover, pharmacists have to choose the cheapest medication for the patient;

• doctor’s receipt – doctors have to hand over a receipt to their patients after each medical treatment, outlining the services rendered;

• arbitration board – if negotiations fail between the doctors, represented by ÖÄK, and the sickness insurance agencies over new service contracts (Kassenverträge), a specific arbitration board should be devised to determine the terms of the new service contract. The agencies are entitled to conclude separate contracts with the different groups of medical specialists, instead of an overall contract covering all groups of doctors;

• quality evaluation and cancellation of contract – every five years, each doctor should be subject to an evaluation procedure, with the aim of examining whether the quality criteria – set up by an independent body – are met. In the case of substantial and repeated non-fulfilment of these criteria, the service contract can be cancelled unilaterally by the agency for individual doctors.

ÖÄK response

The ÖÄK, a mandatory representative interest organisation of both employed and self-employed doctors (AT0801039I), has strongly opposed the reform plans; it argues that such a cost saving plan would be likely to endanger the well-proved Austrian health service system. In particular, the chamber has warned of direct political interference with the contents of medical treatment and of surveillance of medical practices by state authorities. In order to avert these reform plans, the chamber organised a number of ‘strike’ days during June 2008, when almost all of about 15,000 medical practices of doctors under a service contract with a health insurance agency, except for dentists’ practices, remained closed.

Government failure

Strikingly, the government withdrew the reform plans – not because of ÖÄK’s protests, which proved unpopular, but for reasons of internal political conflicts. In fact, SPÖ and ÖVP – for party political reasons – eventually failed to agree on the scope of the monitoring and enforcement rights with which the social security providers of the planned social security holding corporation should be equipped. This conflict relates to the fact that each of the various social security providers more or less falls within the sphere of influence of either SPÖ or ÖVP and was partly reluctant to lose their relative autonomy. To bring this conflict to an end, ÖVP suggested introducing the health service reform without implementing the new holding agency; however, SPÖ refused this proposal. Thus, the legislative initiative, including the necessary ad hoc funding of the sickness insurance agencies, failed as a whole. In response, the social partners – particularly the trade unions – expressed their indignation.

As a consequence of this significant political failure, the coalition government resigned on 7 July 2008.

Georg Adam, Department of Industrial Sociology, University of Vienna