Policy Note 11: Health insurance companies in competition

Demographic change and advances in medical technology are leading to latent pressure for an increase in public spending on healthcare. In an international comparison, Austria has very high expenditure on healthcare, but the result indicators show only mediocre values. These findings point to considerable potential for improving the efficiency of the use of funds.

The healthcare reform of 2013 represents an ambitious project for a fundamental redesign of public healthcare provision. Although the targets set for curbing expenditure growth appear to be achievable, the healthcare reform does not solve the problem of very high coordination costs in the healthcare system. Competition among health insurance funds for insured persons and between service providers for contracts with the health insurance funds could trigger substantial efficiency-enhancing effects.