Healthcare industry

If an inpatient stay in hospital is necessary for the treatment of an illness, costs are incurred, e.g. for the medical examination and treatment of the patient, the necessary remedies, care, accommodation or meals.

In Austria, healthcare is provided through compulsory insurance based on the social insurance model. Social insurance is mainly financed by insurance contributions. The federal government regulates the hospital system in principle, while the federal states are responsible for implementation. The Austrian healthcare system is financed by social insurance contributions, tax-financed public funds and private co-payments in the form of direct and indirect cost sharing (e.g. "daily allowance", patients' contribution to the cost of meals, prescription fees, co-payments, private health insurance).

Private hospitals receive funding from the Private Hospitals Financing Fund(PRIKRAF) for services for which there is an obligation to pay social insurance contributions in accordance with the rules of performance-oriented hospital financing (LKF model). The PRIKRAF, in turn, is financed by funds from domestic social insurance providers for inpatient and day-care services and nursing cost subsidies for treatment in a PRIKRAF hospital, by reimbursement amounts from foreign insurance providers and by investment income.

Private hospitals are primarily financed by payments from private health insurance companies, which they receive on the basis of direct settlement contracts for the treatment of privately insured or additionally insured persons, as well as from direct payments from non-privately insured patients. In addition, they receive social insurance cost contributions for persons who are subject to compulsory social insurance. These contributions are processed via the Private Hospitals Financing Fund (PRIKRAF).

The social security contributions that private hospitals receive for their services are significantly lower than those received by public hospitals for the same services. In 2022, the Austrian social security system paid an average contribution of between EUR 0.72 and EUR 0.76 per LKF point for inpatient care at all fund-financed hospitals across Austria. In 2022, the social insurance system provided a funding contribution of EUR 0.455 per LKF point for services provided by PRIKRAF clinics. Public hospitals receive an average of EUR 0.72 to 0.76 per LKF point from Social Security (a total of EUR 1.97 in public funds). PRIKRAF clinics currently receive EUR 0.45.*

In terms of the final inpatient costs per stay billed via the respective fund, PRIKRAF is around 70% below the average value of the provincial funds. There is also unequal treatment of services in the area of PRIKRAF compared to services financed by provincial funds in that co-insured patients' shares must be offset in accordance with Section 447f ASVG for private hospitals, but not for public hospitals. The financing of the different groups of hospital operators (public non-profit, private non-profit and private) is characterized by very different structural framework conditions, as, among other things, the LKF point values vary greatly and thus investment financing and financing gaps in the operational area are also addressed differently. Gaps in financing are closed in the area of public non-profit hospitals by means of disposal financing including loan authorizations. In the case of private hospitals, income from other areas must generally be used.**