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Failure to improve care outside hospitals

Partner Institute: 
Institute for Advanced Studies (IHS), Vienna
Survey no: 
Eichwalder, Stefan and Maria M. Hofmarcher
Health Policy Issues: 
System Organisation/ Integration, Political Context, Access
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? yes no no no no no no
Featured in half-yearly report: Health Policy Developments 11


In attempts to improve ambulatory care a proposal was made to create another pillar for care delivery outside hospitals: Ambulatory care centres aimed at making care more patient-centered and at introducing more flexibility in management and contracting. This proposal was turned down within one week as opposition in particular from doctors was fierce. Now a working group consisting of all stakeholders seeks to resume the discussion and is expected to come up with new proposal at the end of 2009.

Purpose of health policy or idea

The proposal for the creation of ambulatory care centres mainly aimed at

  • establishing a new pillar for specialist outpatient care
  • improving allocation efficiency by ensuring quality treatment at lowest possible costs
  • enhancing the integration of service delivery

 Currently the delivery of outpatient care in Austria is organized in three pillars:  

  • Contracted physicians who are self-employed and mainly work in solo-practices.
  • Outpatient clinics ("Ambulatorien") which are either run by the social health insurance and private individuals and
  • Hospital outpatient departments ("Spitalsambulanzen"),

About 40 percent of privately practising doctors have a contract with one or more sickness funds. Contracts are issued on the basis of a "location plan" ("Stellenplan") which is administered on the regional level by the physicians' chamber and the health insurance funds. While some oversight from central bodies about the specificity of these plans is ensured, selective contracting largely evolved on the basis of regional preferences. As a result the density of contracted doctors also varies across regions even though to a lesser degree when compared with the variation in the density of all privately practicing physicians. Contracted doctors are financed with a mixed scheme which comprises a lump-sum and fee-for-service fees. The composition of the fees per case also varies across regions.  

In 2002 about 840 outpatient care clinics delivered services. Around 16 percent are owned and managed by social insurance. The majority of these integrated providers were dental outpatient clinics (64 percent), see Hofmarcher, Rack 2006. In some areas outpatient clinics are a threat to contracted physicians working in solo-practice. In the late 70ies an appeal was made to the Supreme Court to restrict market entry for outpatient clinics. This led to a verdict and since then outpatient clinics can only be created on the basis of a consensual agreement between the chamber of doctors and the federation of social health insurance. Before that only an authorization by the provincial governments was necessary. Social health insurance pays for the service in outpatient clinics largely by a flat fee per case treated.

Hosptial outpatient departments are important interfaces between ambulatory care and hospital care. Contrary to outpatient clinics they often complement service delivery of contracted doctors. While efforts have been made in recent years to shift patients to contracted doctors, activity of hospital outpatient department grows robustly. This may reflect discomfort about rather short and inconvinient opening hours of practising doctors but also a high level of patient satisfaction with better integrated care on the level of hospitals. Social health insurance pays a flat fee per case treated in outpatient departments; cost in excess to this fee are borne by hospital owners.

In 2001 legislation was implemented to permit the creation of "joint practices" and "group practices" in response to claims to improve delivery of primary care. Agreements for the establishment of group practices have to be concluded individually in all nine Länder between the physicians' chamber and sickness funds. Currently there are about 188 doctors employed in group practices in 7 Länder, mainly in Vienna (65) and Upper Austria (86). (1). This corresponds only to a share of about 2 percent of all contracted doctors.

According to current laws the only possible corporate structure for group practices is an open corporation, whose associates can only be authorised physicians and dentists. Other physicians cannot be employed. While a group practice concludes a joint contract with a sickness fund, contracts in joint practices are issued individually to each participating physician. Normally they just share facilities and equipment.

Ambulatory care centres as promoted by that idea are a subtype of an outpatient clinic.  According to §2 KAKuG (Federal Hopsital Act) outpatient clinics are hospitals and thus regulatory responsibility is in the hands of Federal States who ratify individual Hospital Acts.  It was envisaged that only health care professionals, especially medical specialists, in a contractual relationship with the social health insurance can become shareholders of ambulatory care centres. The draft proposal also foresaw the possibility of integrating or replacing already existing hospital outpatient departments in ambulatory care centres. As opposed to group and joint practices all kinds of health care professionals can be employed in ambulatory care centres.

figure 1: outpatient and inpatient expenditures in Austria; figure 2: admission rate and length of stay in emergency hospitals

Figure 1: outpatient and inpatient expenditures in Austria; figure 2: admission rate and length of stay in emergency hospitals

Main points

Main objectives

The proposal for the creation of ambulatory care centres mainly aimed at

  • establishing a new pillar for specialist outpatient care
  • improving allocation efficiency by ensuring quality treatment at lowest possible costs
  • enhancing the integration of service delivery

Groups affected

Patients, sickness funds, physicians

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Characteristics of this policy

Degree of Innovation traditional rather innovative innovative
Degree of Controversy consensual highly controversial highly controversial
Structural or Systemic Impact marginal rather fundamental fundamental
Public Visibility very low very high very high
Transferability strongly system-dependent system-dependent system-neutral

The proposed model of ambulatory care delivery would have been rather innovative in the Austrian context. Controversy about the draft proposal reflects that. If implemented successfully this proposal would have probably changed the landscape of specialist ambulatory care fundamentally.

First, hospital outpatient care and ambulatory specialist care outside hospitals could have been merged. This probably would have helped to improve care delivery at crossing points. Thus, both quality care delivery and efficiency might have been lifted as many stakeholders and experts believe that inefficiency prevails because of administrative fragmentation at this crossing point.

Second, ambulatory care centres may have been able to employ health professionals including doctors. By now this is hardly possible in the Austrian context. This implies that these organisations would have competed with existing forms of private practices mainly run by a solo self-employed physician.

Third, quality care delivery at the level of this fourth pillar would have become more observable as providers would have been requested to adhere to nationally provided quality standards. This could have led to spill-overs for other care settings, e.g. private practising doctors making self-employed solo-practitioners more accountable for the quality of care delivery. In turn this would require them to invest in achieving these standards.

Political and economic background

In the context of negotiations about fiscal equilization between the Federal and State level the centre-left government - in office since November 2006 - made a proposal to improve primary care delivery by promoting Ambulatory Care Centres. This proposal met fierce oppositon in particular from doctors. This initative was thought to form part of a general agreement between government levels which normally is effective for four years. The current agreement will expire in 2012 and because of strong opposition the idea of the creation of ambulatory care centres was turned down.

Health care delivery in Austria is fragmented and compared to other European countries hospital activity is high. For example, the ratio of inhabitants to beds in Austria in 2003 was clearly higher than the European Union average (6,1 beds per 1000 people, EU-average: 4.2 per 1000 people in 2005). Reforms in inpatient care since 1997, e.g. the introduction of the Austrian DRG system or outsourcing led to a reduction of the average length of stay but simultaneously to an increase in admission rates (see figure 2). While hospital care is mainly in the responsibility of Federal States, primary care is regulated through selective contracting by individual sickness funds on the basis regional location plans. In addition, primary care is mainly rendered in solo-practices and there is variation in the density of doctors (Hofmarcher, Rack 2006). This has led to concerns about poor efficiency of allocation of resources. 

In recent reforms State Health funds ("Landesgesundheitsfonds") were introduced to "… enhance planning, control and financing competence" (Hofmarcher 2004). This has led to the creation of a financial pool on federal state level ("Reformpool") to promote better integration of care delivery between ambulatory care and hospital care. While there are a variety of projects in place, evidence is weak that care delivery at transition points has improved and that efficiency was enhanced (Egger 2007). The introduction of DRG-based hospital financing and ongoing outsourcing of hospital management has helped to improve performance on the level of public hospitals (Hofmarcher, 2005, Fidler et al. 2007). However, the separation between ownership and payer has not been fully achieved leaving scope and quality of hospital care largely in the hands of local politicians. At the same time ambulatory care provision - largely under the stewardship of regional sickness funds and chambers of doctors - is been organized and delivered in parallel with hospital care provision. 

The set up of ambulatory care centres was thought to enhance cooperation between sickness funds and regional State Health Funds. In the Austrian context these entities could have helped to make care delivery more responsive at lower cost. Furthermore, quality care could have been ensured by better access to health care through extended opening hours in outpatient care, by the integration of different health professionals (one-stop-shops), and by a better flow of information across providers (Oliver 2007). Better integrated care delivery may also generate economies of scale by better utilisation of equipment and (medical and non-medical) personnel. Finally better integrated ambulatory care may be more appropriate to address emerging care needs for chronically ill people in light of epidemiological changes from acute to chronic diseases.

In sum, ambulatory care centres as envisaged by this idea could have helped to reduce the number of acute care beds in hospitals without compromising the quality of health care delivery.

Complies with

Agreement according to Article 15a of the Federal Constitution

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? yes no no no no no no

Origins of health policy idea

Ambulatory care centres

In the context of negotiations about a general agreement on securing health sector financing in fall 2007 a new pillar for the provision of ambulatory care was introduced. Ambulatory care centres are considered as being a special type of an outpatient clinic. According to §2 KAKuG (Federal Hospital Act) outpatient clinics are hospitals and thus regulatory responsibility lies in the hands of Federal States.

Ambulatory care centres may be established, if

  • Need for such an organization is approved by the regional health platform (for more on health platforms see survey 4(2004))
  • Health insurance is willing to contract an ambulatory care centre.

In this context national guidelines, including guidelines to ensure quality  and provisions from the nation-wide supply plan (Österreichischer Strukturplan Gesundheit - ÖSG) must be considered. Further, all kinds of health professionals may be employed. Except for joint-stock companies all corporate structures are possible including the establishment of a limited liability company. Health professionals other than physicians and health facility owners, e.g. hospitals may become associates of an ambulatory care centre.

Initiators of idea/main actors

  • Government
  • Providers
  • Political Parties

Approach of idea

The approach of the idea is described as:
new: Partly international experience with similar forms of ambulatory care (Germany: Polyclinics (Medizinische Versorgungszentren), UK: treatment centres)

Stakeholder positions

In October 2007 the chamber of physicians brought the draft proposal to public attention. Withdrawal was required as physicians claimed that ambulatory care centres would lead to:

  • a nationalization of health care and a state-run system similar to that of the German Democratic Republic
  • an end of free choice of medical practitioner
  • a dismantling of doctors in their on practice and to
  • an expropriation of doctors' offices.

Doctors threatened to go on strike and/or to keep their practices closed for one day in November. They further claimed to get involved in the development of a new proposal concerning ambulatory care centres.  

There was hardly a chance for other stakeholders or opposition parties to comment on the proposal because it was removed from the draft agreement within one week.

As a result  the two-page proposal on ambulatory care centres was melted down to one paragraph in the current agreement (Vereinbarung gemäss Art. 15a B-VG 2008-2012). This paragraph stipulates that until the end of 2009 a working group consisting of all stakeholders involved are required to develop a proposal how ambulatory care can be improved to provide patient-centred care which is efficient. In addition the then proposal needs to address existing gaps in care delivery and shall make suggestions how these gaps could possibly be closed by new organizational models.

Actors and positions

Description of actors and their positions
Minister of Healthvery supportivevery supportive strongly opposed
Physicians' chambervery supportivestrongly opposed strongly opposed
Political Parties
FP (freedom party)very supportivestrongly opposed strongly opposed

Influences in policy making and legislation

A working group will present models of ambulatory care in 2009.

Legislative outcome


Actors and influence

Description of actors and their influence

Minister of Healthvery strongstrong none
Physicians' chambervery strongvery strong none
Political Parties
FP (freedom party)very strongneutral none
Minister of HealthFPÖ (freedom party)Physicians' chamber

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Expected outcome

While a more patient-centred approach to ambulatory care provision is much overdue in the Austrian context, the failure of this policy proposal to successfully emerge into legislation is not surprising.

  • First, it appears that it was not well prepared. Policy makers probably underestimated resistance to this from doctors.
  • Second, time permitted for discussing this proposal was likely too short.
  • Third, it seems that the proposal lacked effective support from other important stakeholder, e.g. health insurance. In particular, this proposal sought to leverage regional workforce planning, e.g. the regional location plans to "silently" become part of nation-wide capacity planning. This would have implied less autonomy on behalf individual sickness funds by taking away some of their negotiation power with doctors. However, capacity planning in ambulatory care is now integrated in the  current general agreement between government unit about nation-wide health planning.


Sources of Information

(1) Personal information, Chamber of Physicians


Bodenheimer, T. et al. (2002), "Improving primary care for patients with chronic illness", Journal of the American Medical Association, Vol. 288(15), pp. 1775-1779.

Egger, A., (2007) Wenig Aktion in the Töpfen, Clinicum 11/07

Fuchs V. "The supply of Surgeons and the Demand for Operations". Journal of Human Resources 13, 1978

Hofmarcher M M. "Austrian Health Reform 2005: Agreement reached". Health Policy Monitor, April 2004. Available at

Hofmarcher M M, Rack H-M. "Health system review. Health Systems
in Transition". 2006; 8(3):1-247.

Fidler, A., R. Haslinger, MM Hofmarcher, M Jesse, T. Palu: Is The Incorporation of Public Hospitals The "Silver Bullet" To Address Overcapacity, Managerial Bottlenecks And Resource Constraints in the EU. Examples from Austria and Estonia, Health Policy 81 (2007) 328-33

Hofmarcher, MM. "Gesundheitspolitik seit 2000: Konsolidierung gelungen - Umbau tot?". In Talos, E. (Hg.) Schwarz-Blau, Eine Bilanz des "Neu-Regierens", LIT Verlag GmbH, Wien 2006

Hofmarcher MM, Ch. Lietz, A. Schnabl. Inefficiency in Austrian inpatient care: An attempt to identify ailing providers based on DEA results. Central European Journal of Operations Research, Vol 13, Issue 4, December 2005.

Oliver, A. (2007a) "The Veterans Health Administration: An American Success Story?" The Milbank Quarterly, Vo. 85, No.1, 2007 pp.5 -35.

Author/s and/or contributors to this survey

Eichwalder, Stefan and Maria M. Hofmarcher

 Review provided by:

Clemens Auer, Director General, Ministry of Health

Suggested citation for this online article

Eichwalder, Stefan and Maria M. Hofmarcher. "Failure to improve care outside hospitals". Health Policy Monitor, April 2008. Available at