Excess Capacity and Planning: Kain tortures Abel

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Abstract

Planning in Austria is based on volumes and activity of hospitals and since recently extends to other care sectors. Balancing supply proves difficult owing to fragmented responsibilities in health care. The impact of intensified planning activities on hospital cost growth appears limited in recent years. The effectiveness of supply planning needs to be enhanced by fitting in cost and quality data. More fundamentally, capacity will only become balanced when governance problems are being tackled.

Purpose of health policy or idea

Capacity planning in Austria aims at regulating a balanced supply of quality health and social care services across health care settings and over time. Since the early 1990ies planning of hospital beds on the level of the central government became the most important instrument to streamline hospital capacity, aiming at ensuring financial sustainability and quality through regulating the supply of services in a more systematic way. In the course of the years, planning methods were re-fined. On the basis of the 2005 health reform legislation (Hofmarcher 2004) the current tool (Österreichischer Strukturplan Gesundheit - OSG 2008) valid from 2008  through 2010 has moved towards planning based on service volumes and activity. In addition to the focus on volumes, the OSG 2008 extends planning activities to practically all health and social care settings for the first time. In particular it encompasses:

• Acute hospital care
• Ambulatory care (single headed offices, outpatient clinics, outpatient care in acute care hospitals)
• Rehabilitation (inpatient and outpatient)
• Long-term care (focusing on cross-over-points for patients)

For the time being the Austrian OSG 2008 is a framework plan for the acute care hospital sector (from which volume data are consistently available since 1997) and concentrates on:

• 32 supply regions which are combined in 4 supply zones
• Reference values for the number of inpatient stays per specialty according to DRG groups (Leistungsorientierte Diagnose-Fallgruppen - LDF), obtained through a geographical information system allowing for an interval to deviate +/- 25 percent from this reference limit
• Stipulation of minimum frequencies of service volumes on the basis of LDF  and proximity to providers

The OSG 2008 further elaborates supply of:

• Ambulatory care using 2006/2007 as reference years
• Rehabilitation and long-term care but without binding volume regulations
• Major equipment, e.g. MRI etc. to prescribe the maximum number of high-tech machinery in both inpatient and ambulatory care permitted per federal state ("Länder").

To allow for more flexibility at lower levels of government, detailed planning is done by federal states ("Länder") and is guided by principles of integrated regional provision. Basic planning principles include:

• Ensuring horizontal equity in access
• Promoting quality of care encompassing structural-, process,- and outcome quality
• Assuring technical efficiency of care provision
• Enhancing allocation efficiency by balancing capacity across health care settings.

Main points

Main objectives

The main objective of the OSG 2008 is to deliver a consistent framework for planning of health and social care services, to be detailed and implemented on the level of regions and/or on the level of individual settings, i.e. rehabilitation and cross-over-points to long-term care. In particular, integrated regional planning aims at:

• Ensuring needs-based  provision of effective services, equally accessible subject to the whole range of services available in the supply region at stake
• Enhancing better coordinated care delivery for patients crossing sector border when navigating through the system
• Better matching of planning in all areas on the level of supply regions 
• Improved supra-regional coordination through the national plan (OSG)
• Seeking to ensure a minimum number of cases to be treated per specialty
• Assuring re-allocation of capacity to accommodate changing needs

Type of incentives

Already throughout 2000, legislation envisaged that non-compliance of the "Länder" to gradually adjust capacity according to benchmarks as detailed in respective plans will be sanctioned by withholding federal money (in the order of about 120 million Euros). While these sanctions may still be imposed according to stipulations in the current legislation, they were never executed. Rather, they were occasionally used as a threat to encourage compliance. In the context of the OSG 2008 it is also foreseen to expand the possibility to sanction non-compliance to ambulatory care outside hospitals but there are no detailed agreements as yet.

Groups affected

Federal States, Hospital Providers, Patients

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

While planning activities on the basis of service volumes are surely innovative, the degree of controversy about implementation likely remains high. There appears to exist a common agreement that planning of capacity is necessary. But many hospital owners, who are also often local politicians are bound by local interest to expand supply - even in areas with a high density of providers, where activity is low and where safe care cannot be guarenteed. Controversy is expected to increase when regional plans incorporate all sectors of care including doctors working in solo-practices. Discussions around the  endorsement of the regional plan in Wien gave a taste of this.

Once planning of volumes and services really has diffused and provision is balanced across care sectors, the systemic impact will be high. At the best, allocation efficiency improves along with an optimal level of capacity. However, for better performance of the health care sector to fundamentally emerge from planning, responsibilites for planning of supply needs to be consolidated across health care sectors. Even more importantly, cost and quality data need to be fitted into planning models and incentives need to be developed to have actors in all care sectors to adhere to capacity needs.

Public visibility is rarely high on a national level, even though envisaged changes of capacity on lower level of government often meets fierce opposition through public channels and the media. Local opinion leaders often utilize these channels to resist those changes. Thus, talking about shutting down hospitals or to rededicate their use is frequently done behind closed doors.

Political and economic background

As everywhere, planning of health care capacity reflects government efforts to combat over- and under-provision of services or erroneous provision, which likely arises in response to market failures when health care markets are unregulated. The Austrian Structural Health Sector Plan (Österreichischer Strukturplan Gesundheit - OSG 2008) is developed on the level of the central government. It is legally binding for regional health plans to be developed at lower territorial units. Since 1997 planning of hospital capacity along with partial budget caps for public hospitals became the most important policy tool of the central government to ensure financial sustainability and quality care provision. This was accompanied by structural changes, i.e. implementation of state led "treasuries" (health funds) to govern activity based financing of hospital services. While these "treasuries" remained active, the 2005 health reform in addition to that had set-up "state health platforms" that are to ensure co-operative governance and organization of supply of inpatient and outpatient care, as well as ambulatory care services at the level of the federal states ("Länder") (Hofmarcher et al 2007). While during the 1990ies other countries began to experiment with regulated competition between insurers, e.g. in Germany or in Switzerland,  Austria´s regulatory efforts remained strictly bound to the supply side in attempts to prepare for regulated competition between hospitals (Hofmarcher/Rack 2006).

 

Capacity planning: the glue between governance roles in the health sector

Supply of capacity in the Austrian health and social sector reflects the architecture of governance of a decentralized but cooperative Federal State. While central government authority is high in many areas of the health system, the provision of hospital care is delegated to lower levels of government, and that of ambulatory care outside hospitals to social health insurance. In addition, social care is also mainly in the responsibility of federal states ("Länder"). Essentially the central government only resumes oversight and supervision roles in these areas (Hofmarcher/Rack 2006). While hospital care is in the responsibilities of the "Länder", the cost of provision is jointly financed from social health insurance and from federal states ("Länder") after social security legislation was unified in the mid 1950ies.

As everywhere, the health sector began to develop rapidly in the 1970ies with double-digit cost growth in hospitals throughout the late 1980ies and early 1990ies, requiring policy makers and stakeholders to better align service provision with fragmented responsibilities.  While efforts to plan hospital capacities date back to the late 70ies, the first binding "Austrian Hospital and Major Equipment  plan"  (ÖKAP/GGP: "Österreichisches Krankenanstalten- und Großgeräteplan") was implemented in 1997. Binding in this context required the federal states ("Länder") to adhere to a maximum number of beds per specialty as prescribed by the central government. Non-compliance was to be sanctioned via withholding federal money. However, sanctions were never executed towards an individual "Land". On the contrary, commentators have observed that hospital capacity in the 2000 and successor plans were partly even increased even though overall hospital capacity has come down in the last 10 years (see below). 

The judicial anchor of planning activities in Austria is legislation coming out of a public contract  (Agreement Art. 15a Bundes-Verfassungsgesetz - B-VG) between the central government and federal states ("Länder"). The need for this regulatory instrument emerges from public task sharing between all involved stakeholders on the basis of the constitutional act (Art 15 a B-VG). The first agreement of this kind was implemented in 1978 mainly aiming at bringing expenditure of social health insurance in line with revenues ("Einnahmenorientierte Ausgabenpolitik") .

The current and ninth Agreement Art. 15a B-VG is valid for the period 2008 through 2013.  As a rule, the renewal of this contract is synchronized to legislation about fiscal equalization across territorial units (Finanzausgleichsgesetz - FAG 2008). Thus, provisions in this law and the attached Art 15a B-VG contracts define the content and the scope of mutual responsibilities for care provision as well as fiscal relations. This includes a valorised cap of money that finances about half of hospital cost on the basis of an activity based prospective DRG-model (LKF-Leistungsorientierte Krankenanstalten-Finanzierung). Most of this budget which mainly comes from social health insurance is centrally allocated on the basis of fixed population quotas per federal state ("Land") and flows into a specified fund per state (for more details see Hofmarcher/Rack 2006) to be used for paying individual hospitals, i.e. generally called "Fund-Hospitals" which range from providing services on the technical frontier of medicine including teaching hospitals to small hospitals specialized in certain treatments.

 

Performance-based financing of hospital care has enhanced the capacity to regulate supply

One merit of activity based financing of hospital care in Austria has been that it helped to re-fine planning methods and to finally switch from planning physical infrastructure, i.e. the number of beds per hospital per specialty, to define quantities of services delivered in a certain region:

• First, the refinement of planning has benefited from ongoing adjustments in data quality and monitoring of documentation. While in the OSG 2008 the core regulatory prescriptions still target the hospital sector, planning activities have been extended to other areas of the health care system in recent years, encompassing essentially all service areas.
• Second, the definition of the scope of services needed is to some extent based on population data about morbidity originated in the respective catchment area.
• Third, while structural quality has always been integrated in planning, indicators of process quality were rarely used. Since recently, minimum frequencies for surgical service provision have been defined to be adhered to by individual hospitals. This has proven to be necessary as - in line with experiences in other countries, e.g. MEDPAC 2009  - unexplained regional variation in clinical practice raised concerns about the quality of care provided.
• Finally, catchment areas and the level of activity of individual providers have been framed using benchmarks for technical efficiency of hospital operation.

Does capacity planning advance technical efficiency?

While efforts to plan capacity intensified in the late 1990s, cost efficiency appears to have increased considerably in acute hospital care:

• First, owing to the incentive to increase activity built into the prospective payment scheme used for paying acute care hospitals in Austria since 1997, average length of stay came down considerably and is now below or at the OECD-average, even though the level of this indicator was clearly above this reference point in 1997.
• Second, this trend was accelerated by hospital capacity planning which -  by then mandatory to stick to the level of the "Länder" - helped, at least to some degree, to bring the number of beds down.
• Third, reflecting the degree of capacity utilization the occupancy rate in acute hospital care is higher than in the OECD as a whole and the value for 2007 (79%, 1995: 77%) has increased more when compared with 1995 than the respective average value for the OECD (1995: 74%, 2007: 75%), (OECD 2009). 
• Fourth, statistical estimates of technical efficiency within the Austrian hospital sector have shown improvements over time. However, the level of efficiency varies across owner-groups. Hospitals owned by non-profit religious orders perform superior when compared to their public peers in particular to those (public) hospitals owned by the "Länder" (Hofmarcher et al 2003).
• Finally, labour productivity appears to have risen. Between 1998 and 2008 the number of hospital employees per bed grew at a lower annual rate (+ 1,7%) than cases per bed (+3,3%). Moreover, cost per hospital employee (+3,6% per year) grew less than cost per bed (+ 5,4% per year).

 

Table 1: What drives cost in the Austrian hospital sector? 

In € at current prices	Total Operating Cost		Total Operating Cost without imputed additive cost*		Imputed additive cost*
	2008  per capita	AAGR** 98-08	2008  per capita	AAGR**  98-08	2008 per capita	AAGR** 98-08
Burgenland	708	4,9	649	4,6	59	8,7
Kärnten	1.220	3,5	1073	3,2	147	6,6
Niederösterreich	957	5,4	867	5,2	90	8,1
Oberösterreich	1.205	5,3	1020	4,6	185	10,2
Salzburg	1.196	4,5	1062	4,1	134	7,9
Steiermark	1.172	4,7	1041	4,5	130	6,5
Tirol	1.155	3,9	972	3,4	182	7,4
Vorarlberg	920	3,4	840	3,4	80	4,1
Wien	1.830	2,5	1580	2,3	250	4,0
Total	1.245	4,1	1088	3,7	157	6,6
Memorandum item
Total expenditure on health	3,543	4,2
Capital Stock per health employee***	89.365	2,4
Gross Domestic Product	33,833	3,7

 *Imputed additive cost: "Kalkulatorische Zusatzkosten", Kostenartengruppe 08

** AAGR: Average Annual Growth Rate

*** Net capital stock of the "health and social" branch, at current prices per employee of this respective branch (Nettokapitalstock in der Wirtschaftsklasse Gesundheit und Soziales (ÖNACE Rev. 1.1) zu laufenden Preisen pro beschäftigter Person in derselben Wirtschaftsklasse)

Sources: BMG, Statistik Austria, OECD Health Data, June 2009, own calculations

 

There is excess capacity in the hospital sector but only when viewed in isolation

By international comparison, the Austrian hospital sector is large and appears to even expand:

• First, a high number of inpatient and acute care beds per capita is accompanied by a high number of admissions, putting Austria first when ranked within all OECD countries (OECD 2009). Austria also ranks high with the density of high-end technology available.
• Second, this may reflect a generally high level of health investment per employee in the health and social care sector in Austria when compared to other EU-countries. In particular, labour intensity measured as the number of health sector employee per capita is relatively low whereas capital intensity proxied by investment per employee is high (see Figure 1). 
• Third, while between 1998 and 2007 annual per capita operating cost in acute hospital care grew practically in line with overall annual per capita health spending and only slightly more than per capita GDP, a sharp rise could be observed in 2008. In particular, imputed additive costs which mainly reflect cost of depreciation ("Kalkulatorische Zusatzkosten") grew visibly more than other per capita operating cost (see Table 1).
• Finally, and in line with this observation capital intensity measured as accumulated capital per employee in the health and social sector increased between 1998 and 2008, while the comparable value for the service sector as a whole declined. In addition, the health sector specific capital stock as a share of the economy-wide capital stock even increased slightly from 3,0 percent in 1998 to 3,1 percent in 2008. These developments may indicate that the capitalization of the hospital sector is high and even slightly expanding. 

While Figure 1 (see below) only suggests that high capital intensity is weakly related to a low level of labor intensity it does not automatically indicate excess capacity in the Austrian health sector when viewed as a whole. Moreover, the optimal mix of labour and capital is unknown unless causal effects of this mix on outcomes are investigated across countries. In particular, ambulatory care sectors in Austria may have remained relatively undercapitalized when compared to inpatient care:

• First, most doctors work in single headed practices and opportunities to team-up in bigger entities have been limited so far (Eichwalder et al  2008, Hofmarcher et al. 2010). Not least because of widespread resistance from doctors to accept other institutional settings rather than solo-practices. Health insurance funds as contractual partners for doctors are allies in this respect as they fear cost inflation emerging from bigger entities. In particular they are concerned about "supplier induced-demand"  through fee-for-service schemes largely applied in these settings.
• Second, entry of ambulatory care providers to contracts with health insurance funds is restricted with regulation developed on the level of health insurance funds and doctors.
• Third and in this context, the regulatory instrument ("Stellenplan") used for this purpose hardly takes account of other supply factors, nor does it consider sociodemographic aspects. In addition, it is regionalized with regional medical associations and regional health insurance funds developing the individual rules and the scope of practice with only few interference from the respective central bodies.

Those factors have contributed to capacity rationing in the area of ambulatory care outside hospitals. This is largely reflected by patterns of utilization. For example, demand for primary care physicians has not changed much in recent years while data show that utilization of outpatient care in hospitals has grown as well as demand for technical specialists, e.g. radiology. This may indicate a yet uncorrected level of erroneous provision and unbalanced supply of capacity across the health care sector rather than excess capacity in the hospital sector. Thus, it appears that the issue in Austria is underutilized capacity in inpatient care and inflexible work-time arrangements of all health professionals in all sectors, both preventing optimal utilization of existing capacity from emerging.  

 

Table 2: Predominate provider payment schemes in care sectors in Austria, 2010

xxxx= approximately 100%	Fee for Service	Per case flat rate	Per diem rate	Per capita flat rate	Global budget	Wages	Points on a diminishing scale
Ambulatory care
Primary Care	xx	xx*
Specialist care	xxx	x*					in some schemes for the number of patients
Outpatient care clinics		xx			x	x**
Outpatient care in hospitals				xxx	x
Inpatient Care
Acute inpatient care	xx	x			x		for lower bound lenght of stay tresholds
Long-Term Care			xxxx

 

* per case throughout the billing cycles, usually three months

** if integrated providers, e.g. outpatient clinics owned by sickness funds

Source: Authors compilation 2010

 

Figure 1: What is the right mix between labour and capital in the health sector?

Purpose and process analysis

Current Process Stages

	Idea	Pilot	Policy Paper	Legislation	Implementation	Evaluation	Change
Implemented in this survey?

Origins of health policy idea

In the mid 2000, policy makers and experts have come to recognize that non-aligned payment incentives and unresolved governance issues across the health care sector have exacerbated the imbalance in the supply chain. This largely emerged as a result of the introduction of the performance-based hospital financing in 1997. At the same time payment schemes in ambulatory care including those for outpatient care in hospitals remained essentially unchanged (see Table 2 above). Fragmented responsibilities in care sectors have so far prevented the alignment of payments of providers on the basis of care episodes.

As a consequence central government stakeholders and representatives of federal states have put forward proposals to better integrate health care planning into all care sectors in the context of regular meetings of the Federal Health Agency ("Bundes-Gesundheits-Kommission-BGK). The BGK was established in 2005 and is the supreme body on the level of the central government in charge of developing policies (see for further details Hofmarcher 2004, Hofmarcher/Rack 2006). 

The federal planning and research institute "Gesundheit Österreich GmbH" was commissioned to develop concepts to better integrate health planning with the aim to provide a framework plan, e.g. OSG 2008  to be detailed and specified on the level of federal states in so-called "Regional Structural Plans" - RSG.  In line with basic principles in the framework, plan specific objectives and planning principles for each care sector are elaborated (BMG 2009) to adhere to when regional plans are developed. By now all "Länder" have begun to develop regional plans but the degree of progress differs. To date, only two "Länder" (Wien and Styria) have finalized regional plans according the framework plan OSG.  In any case, these plans are to be endorsed on the level of regional "health platforms" where all stakeholders across care sectors are required to co-operate. Approvals are being made on the central level and compliance with the framework plan OSG is evaluated.  

Initiators of idea/main actors

• Government

• Providers

Actors and positions

Government
Central government	very supportive		strongly opposed
Federal States	very supportive		strongly opposed
Social Health Insurance	very supportive		strongly opposed
Municipalities	very supportive		strongly opposed
Providers
Doctors associations	very supportive		strongly opposed
Hospital providers	very supportive		strongly opposed

Actors and influence

Government
Central government	very strong		none
Federal States	very strong		none
Social Health Insurance	very strong		none
Municipalities	very strong		none
Providers
Doctors associations	very strong		none
Hospital providers	very strong		none

Positions and Influences at a glance

Adoption and implementation

On the level of the central government, the development of the OSG is widely supported by medical expert groups coming from all specialties. Their main job is to inform administrators about the development of need in the respective medical area and about changes in technology to be considered. In addition, the development of the OSG is guided by a conceptual framework ("Public Health Action Cycle") where it is suggested that health goals inform planning which is implemented and which feeds into reporting. Reporting about health and utilization is to feed-back into health goals.

By now detailed planning of capacity is done on the level of the federal states ("Länder"). They are required to do so and to adhere to volumes of services as elaborated in the OSG 2008. For example, in November 2009, Wien endorsed the regional plan valid until 2015 and encompassing inpatient care and ambulatory care including outpatient care in hospitals. With regard to inpatient care the plan emphasises an expansion of day care by stipulating a percentage corridor of inpatient stays to be treated as day care cases with the time line until 2015. In this context hospitals are required to submit proposals in spring 2010 how to achieve these targets.

Planning of ambulatory care is based on full-time equivalents per specialty. Reference point is the national average (without Wien) of supply density in 2006. In a second step these values have been adjusted using various variables, e.g. metropolitan factors, demographic factors and structural factors including shifting patient from inpatient care to care settings outside hospitals and interregional migration, the latter being an important factor for metropolitan areas with a high density of university medical centres.

Further, estimates made on the basis of OSG volumes show an increase in future utilization in several areas including radiology. In this context, major restructuring is planned in this area (RSG Wien). By 2015 radiology will be concentrated in specified number of locations without options for doctors and health insurance funds to deviate from this. Successful implementation of these provisions would essentially require many solo-practice doctors to shut down their business or integrate their buisness within certified providers. 

Monitoring and evaluation

The current OSG 2008 foresees assessments about compliance with regulations as put forward. This evaluation aims at helping to further develop the framework plan by focussing on following aspects:

• Monitoring wether regional plans are under way and if so how they comply with the OSG provisions.
• Evaluation wether service provision on the level of individual hospitals is synchronized with given volume benchmarks in the respective region.
• Comparison of the number of actual inpatient stays to benchmarks.
• Up-dating of information about density of providers and utilization of care sectors to be used for refinement of OSG planning.
• Compliance with quality benchmarks.

By the end of 2010 a comprehensive revision of the OSG is foreseen and capacity across care sectors will be planned with the timeline 2020.

Results of evaluation

While not yet published, a preliminary version of the monitoring report indicates that OSG targets as stipulated are probably only partly reached and that heterogeneity of capacity and utilization across the "Länder" has not diminished.

 

Expected outcome

In Austria planning of capacity has changed considerably in recent years and in concert with activity based financing cost-efficiency of hospital care was probably enhanced by planning efforts. A recent review showed that while by now many countries have switched to performance based financing of hospitals, planning is still mostly done on the basis of bed capacity with only England and France forming an exception (Rechel B et al 2009).  With its focus on service volumes and activity of providers and the attempt to elevate capacity regulations to all care sectors the central government efforts are in line with internationally recommended strategies concerning capacity planning in health care (Rechel B et al 2010). In spite of this "front-runner" position Austria is taking in this respect, a number of challenges remain to be tackled:

First, capacity and utilization needs to be better balanced across care sectors. In particular, hospitals appear to absorb more demand than is medically justified. This is largely resulting from compartmentalized regulation activities with the central government and the "Länder" being in charge to provide capacity plans in the area of inpatient care and with health insurance regulating care provision outside hospitals. The current provisions in the OSG 2008 aim at targeting this inefficiency but meet resistance from many actors including doctors.

Second, possibilities for the central government to sanction non-compliant behaviour of regional hospital providers appear to be too weak. For example, data show that strong hospital cost growth in recent years appears mostly driven by capital cost (see Table 1 above). In addition, these cost increases are observed everywhere regardless of the initial per capita level. Thus, there is probably no convergence in this respect although overall service provision became more balanced than it was prior to the introduction of the activity based financing. This suggests that investment strategies are often not aligned with stipulated capacity needs and that the central government lacks effective regulatory tools to intervene in spite of intensified efforts. For example, one federal state ("Land") only recently announced to newly construct two hospitals in proximity to each other without justified planning considerations.  

Third, government efforts to balance utilization and/or to increase utilization of existing capacity may need to be intensified. Both, activity and cost in sectors outside acute hospital care appear to develop moderately which likely reflects non-aligned incentives and governance issues to be detrimental for a balanced supply of services. For example, fees per case in out-of-hospital ambulatory care grew slower in recent years than cost per case in hospital outpatient care. This appears to result mostly from hesitant growth of the number of cases in solo-practices with providers who substitute diagnostic services forming an exemption, e.g. radiology. Yet, the number of patients in outpatient hospital care grew at a faster rate than in all other ambulatory care sectors. However, the frequencies per patient declined considerably, probably reflecting some cost-saving substitution between care settings. In particular, in the last four years per capita cases in specialist care grew slightly more when compared with case growth in outpatient hospital care. At the same time, the annual growth of cost per case in this setting was more than two times higher than the cost growth per case in ambulatory specialist care.

Finally, and in this context routine postponement of administrative reforms to tackle fragmented responsibilities in governance have been impeding health planning efforts to effectively translate into a optimally balanced supply of services. It further hampers the development of care models to better accommodate what already happens behind veils. For example, excess capacity in hospitals appears to be increasingly utilized to care for an ever increasing number of day care patients. At the same time these patients are financed as hospital cases. However, essentially they are ambulatory day care cases but treated as such "in secret" because they have no "medical home". Thus, health reform efforts must acknowledge this and are to ensure that future care settings combine existing capacity with reasonable episode-based payment models to improve patient-centred care inside and outside hospitals. 

Impact of this policy

Quality of Health Care Services	marginal		fundamental
Level of Equity	system less equitable		system more equitable
Cost Efficiency	very low		very high

Once process and outcome indicators will be fully phased-into capacity plans the level of quality of care is likely to increase. In particular, care likely becomes safer as minimum activity thresholds are specified for each specialty. Ongoing planning efforts may also have helped to decrease the risk of dying. For example, by comparison with other OECD countries mortality due to stroke has declined considerably during a period where the creation of stroke units on the basis of capacity plans was pushed.  

No particular impact on equity is expected even though a better balanced supply chain across care sector may have potential to catch those people who are most in need for ongoing preventive surveillance.

Even though improvements of cost-efficiency in the past were possibly leveraged by enhanced capacity planning it is not expected that it will improve further unless excess capital investment comes to a halt and is better coordinated within hospital care and across the care sector. The current planning tools are too weak to deliver this. In particular, in 2009 hospital cost growth has reached an annual rate of six percent after being at 8 percent in 2008 (at current prices). The 2009 growth rate was about four times higher than the nominal annual growth rate reported for the economy as a whole (-1,8%).

References

Sources of Information

BMG, Ed (2009):  OSG 2008, Österreichischer Strukturplan Gesundheit 2008, Gesundheit Österreich GmbH, Wien, www.bmg.org.

Eichwalder, Stefan and Maria M. Hofmarcher. "Failure to improve care outside hospitals". Health Policy Monitor, April 2008. Available at http://www.hpm.org/survey/at/a11/2.

Fülöp, G. (2009): Gesundheitsplannung im Kontext des Public Health Action Cycle, Vorlesung MBA Health Care Management, Medizinische Universität Wien, Wien.

Gesundheit Österreich GmbH (2009): gög*Magazin Edition 3-5 (2009), Wien: www.goeg.at.

Hofmarcher M.M., Lietz Ch., Schnabl, A. Weichselbaumer, M (2003): Effizienzanalyse im intramuralen Bereich II, Institut für Höhere Studien, Juli 2003.

Hofmarcher, M.M.: "Austrian Health Reform 2005: Agreement reached". Health Policy Monitor, November 2004. Available at http://www.hpm.org/survey/at/a4/1.

Hofmarcher, M.M., H. Rack (2006): Gesundheitssysteme im Wandel - Österreich, Medizinisch Wissenschaftliche Verlagsanstalt, Berlin.

Hofmarcher, M.M., G. Röhrling, D. Walch. "Integration of care - follow up". Health Policy Monitor, April 2007. Available at http://www.hpm.org/survey/at/a9/2.

MEDPAC (2009): Measuring Regional Variation in Service Use, Report to the Congress, December 2009, Washington D.C..

OECD (2009), Health at a Glance 2009, Paris.

Rechel B et al (2010), Even in tough times: investing in the hospitals of the future, Euro Observer, Volume 12, Number 1.

Rechel B., et al (Ed) (2009), Capital investment for health: case studies from Europe, Copenhagen: World Health Organization.

RSG Wien (2009), Regionaler Strukturplan Wien: http://www.wien.gv.at/gesundheit/einrichtungen/gesundheitsfonds/rsg.html.

Vereinbarung gemäß Art. 15a B-VG über die Organisation und Finanzierung des Gesundheitswesens für die Jahre 2008 bis einschließlich 2013.

Author/s and/or contributors to this survey

Maria M. Hofmarcher

The author is greatful for many valuable comments received by various experts coming from:

Gesundheit Österreich GmbH

• Andreas Birner
• Gerhard Fülöp
• Petra Paretta

Ministry of Health

• Clemens M. Auer, Director General

Wiener Gebietskrankenkasse

• Jan Pazourek, Direktor

Suggested citation for this online article

Maria M. Hofmarcher. "Excess Capacity and Planning: Kain tortures Abel". Health Policy Monitor, April 2010. Available at http://www.hpm.org/survey/at/a15/2