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Executive Summary
Healthcare spending in Austria, according to the System of Health Accounts, (SHA) totaled $45.4 billion (10.4% of GDP) in 2017. Public payers cover 75% of the total. Viewed over time, healthcare spending in Austria has been increasing at a rate of 4.9% annually over the past twenty years.
The Austrian healthcare system includes 271 hospitals and clinics with around 64,800 available beds (7.4 beds/thousand population). Around 64% of hospital beds are in general hospitals, with 26.6% in specialized clinics and rehabilitation centers, and 7% in sanatoriums or long-term care facilities. In 2017, there were around 45,600 medical doctors practicing in Austria (5.16 doctors/thousand population). The number of available beds has been declining since the 1980s in line with attempts to trim budgets and move care out of hospitals. Despite this trend, Austria still has one of the highest bed/patient ratios in Europe.
Austria has a statutory national healthcare insurance program that covers 99% of the population through 21 different carriers. One of the signature reforms of the most recent coalition government was an attempt to reduce the complexity and administrative cost of healthcare financing by consolidating and merging the many individual carriers to only five.
The healthcare ecosystem in Austria is further characterized by a rift between inpatient and outpatient care. While outpatient services are primarily financed and controlled by the social insurance carriers that maintain contracts with physicians and other providers, hospital-based treatment is provided at public and private facilities and financed through a complex system of payments and reimbursements that is shared by regional governments (funded through federal taxes), the social insurance carriers, and private insurance companies. Most treatments deemed necessary and effective by the insurance carriers are covered, with modest to significant co-payment for dental and vision care as well as health aids.
There are four main drivers in Austria’s medical device market: 1) the aging population and accompanying increasing burden of disease, 2) universal health insurance, 3) the rapid pace of technological development, and 4) poor lifestyle choices, including high smoking and alcohol consumption rates.
The most significant constraints on the market are public healthcare payers working to rein in spending and the European Union (EU) Medical Device Regulation (2017), which established new, much stricter registration, certification, and auditing requirements for all medical devices.
Best prospects are products and medications for an aging population, products/methods that help cut costs, dental care, and health IT.
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Market Entry
Market entry strategies depend on the nature of the product. Most products will need to be reimbursable to be competitive; however, some fields (cosmetic treatments and alternative medicine) are popular despite being paid out of pocket. If the product or therapy is approved for reimbursement, distribution flows either through distributors, direct sales to healthcare providers and purchasing groups, or through the Austrian or European tendering process. For products designed to be used outside the parameters of the statutory health insurance system, market entry can be organized through partners who sell to health aid sellers, drug stores, physicians’ offices, health food stores, pharmacies or similar.
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Current Market Trends
There are four main drivers in Austria’s healthcare market:
- Aging population. In 2017, 19.2% of the population was over 65 and by 2030, projections put the number of people over 65 at 23% of the population. Should this prove to be accurate, the country will experience an unprecedented squeeze on healthcare resources as an increasing number of elderly people with chronic illnesses depend on a shrinking number of active individuals paying into the social insurance systems. One important element of the resource crunch will involve the healthcare workforce. Another element is the move toward sustainability, which will attempt to reduce costs by strengthening both prevention programs and primary care while also improving the integration of care to manage chronic diseases more efficiently.
- Nearly 100% of Austrians have statutory health insurance that affords free access to general practice and specialist physicians who have a contract with public insurance providers. That coverage also extends to (medically necessary) hospitalizations and surgeries, and includes basic dental, vision, and orthopedic care. Co-pays are charged for reimbursed pharmaceuticals, higher-end dental, vision, and orthopedic care, elective surgery, mental health therapies, etc.
- The high level of innovation in the healthcare sector has led to a flood of new technologies in diagnostic procedures, personalized medical treatment, and health IT. With increasing patient and physician awareness about the options available, investment in these advances is gaining momentum. High price tag items have created a dilemma for Austrian public health insurance agencies, namely, how they will finance universal access to state-of-the-art equipment and advanced personalized therapies with limited resources. Health IT advances are another element of this transformation, spanning the gamut from sophisticated clinical decision support and Artificial Intelligence programs to shareable electronic health records and telemonitoring solutions to apps that help patients track their steps and keep track of vaccinations.
- As in much of the developed world, Austrians are making unhealthy life decisions that contribute directly to the primary causes of death. Though life expectancy is higher than the EU average at 81.3 years, Austria’s disability-free life expectancy (DFLE) of 57 years of age at birth, is well below the EU average of 64 for women and 63 for men. Despite explicit warnings on the packages and high taxes, 24% of Austrians still smoke cigarettes. Rates of alcohol consumption are above the European average, 20% of the adult population is obese and the reported diabetes rate is 6%.
The most important constraints on the market are cost-cutting measures and the MDR certification bottleneck:
- The largely public healthcare system is concerned with sustainability, thus has a focus on reining in costs.
- The EU Medical Device Regulation (2017) created much stricter certification and auditing requirements for medical devices and is being implemented on a very short timeline. The lack of notified bodies that are qualified to certify under the new regulations (at this writing, there are only two) has created a massive bottleneck that is expected to have a significant impact on the availability of smaller series medical devices. The new regulations are also expected to hurt companies that do not have the resources to invest in required upgrades of their production, processes, and recordkeeping, nor the financing for the certification/recertification process itself. Experts predict that up to 30% of Austria’s medtech companies will be put out of business. However, this new regulation may open new opportunities for exporters from the United States (U.S.) that have high-quality devices and want to establish themselves in the European market.
Another interesting trend that deserves mention is the popularity of natural remedies and plant-based or homeopathic products, which is among the highest in Europe. According to the Federation of Holistic Medicine, around 80% of Austrians use at least one type of alternative treatment per year to treat issues such as pain, sleep disorders, depression, and gastrointestinal problems.
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Market Size
Market Size (2018)
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Healthcare spending (including investment)
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$45.5 billion
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… as percent of GDP
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10.3%
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… of which spent on inpatient services (including long-term care)
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38.5%
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… of which spent on pharmaceuticals/consumables
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15.8%
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… of which spent on long-term care
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8.8%
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… of which spent on outpatient services
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22.8%
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Hospitals, Procedures, Healthcare Professionals (2017)
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Number of hospitals
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271
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Number of hospital beds
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64,805
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… available beds per capita
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7.35/1,000
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…of which in general hospitals
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64%
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…of which in specialized clinics and rehabilitation centers
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26.6%
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Number of surgical procedures
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1.27m
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…of which orthopedic
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23.6%
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…of which births/urological procedures
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20.7%
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Physicians
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45,596
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…of which GPs
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13,745
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…of which internal medicine specialists
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4,480
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…of which anesthesiologists/intensive care physicians
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2,940
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Dentists
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4,954
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Demographics (2017 est)
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Population
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8.8m
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Life expectancy men/women
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78.5/83.4
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Infant mortality
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2.9/1000
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Percent of population older than 65
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19.2%
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…projection, 2030
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22.8%
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Annual deaths
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83,270
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…caused by heart disease
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40%
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…caused by cancer
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24%
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Prevalence of diabetes
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6.4%
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Main Competitors
Austria imports most of its medical devices. Major suppliers are Germany (around 31% of the market), the U.S. (15%), as well as Switzerland, South Korea, the Netherlands, China, and Japan.
There are currently around 550 companies in Austria that produce or sell medical technologies, of which 171 are manufacturers and 383 are distribution or service companies. Austria’s medical manufacturers include a mix of large national companies with global operations such as MedEl (cochlear implants), Greiner Bio One (diagnostics) and Semperit (surgical and examination gloves), as well as medical Small to Medium size enterprises (SMEs), and the subsidiaries of multinational corporations such as GE Healthcare and Siemens Healthineers. Local production in 2017 reached approximately $2.3 billion with exports of just under $2.2 billion. A directory of life science companies active in Austria can be found at http://www.lifesciencesdirectory.at/.
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Current Demand
Austrian imports of medical equipment were valued at $2.27 billion in 2017, with a continued upward trend projected. While Germany supplies around 33% of Austria’s medical technology, the U.S. is the second most important supplier with a market share of 15% and a leading role in orthopedics and prosthetics. Other major players include Switzerland, the Netherlands, China, and Japan.
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2016
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2017
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2018 (est)
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2019 (est)
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Total Market Size
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2,211
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2,376
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2,641
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2,783
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Total Exports
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2,066
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2,191
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2,344
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2,298
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Total Imports
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2,108
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2,266
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2,334
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2,404
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Imports from the US
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316
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338
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355
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380
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Local Production
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2,169
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2,301
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2,653
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2,677
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Units: USD million
Exchange Rate 2018 1€ = $1.18/$1 = €.85
Sources: fitchsolutions.com, Austria Medical Devices Report Q3 2019; Statistik Austria; estimates based on growth rates and other factors
Technologies for treating age-related ailments: Austria’s aging population predicts growing demand for technologies that are associated with advancing age, including dental consumables, screening and diagnostic technologies, cardiovascular diagnosis and treatment, bone health, orthopedics, cancer diagnosis and treatment, dementia diagnosis and care, mobility solutions, artificial joints, and palliative and hospice care.
Technologies that can help cut costs: Reducing waste and improving efficiency are growing increasingly important as administrators work to reduce the high cost of healthcare. Examples include health IT solutions, preventive medicine, minimally invasive surgical methods and products, and cheaper and more efficient screening and diagnostic technologies.
Dental Products: Popular expectations for both cosmetic and functional dental health are rising, creating new demand for orthodontics, whitening products, professional cleaning products, implants, etc.
Health IT (HIT): HIT solutions are estimated to make up around 1.5% of total healthcare spending, which in Austria translates to around $675 million. One part of that is the national infrastructure for electronic health records (ELGA), which has been under construction for many years. Its aim is to allow healthcare providers to share patient information and provide better integration of care. The program has faced massive resistance from both physicians and data protection groups. As a result, the roll-out has stalled multiple times, patient records currently contain little or no useful information, gaining access is tedious, and at this point it is scarcely being used. There is currently an effort underway to relaunch the program and roll out an electronic prescription record (which still requires a paper prescription that is brought to the pharmacy by hand), but the fate of ELGA as a “patient portal” remains uncertain.
While all hospitals and clinics have non-medical IT systems in place, the penetration of systems that record or share clinical data is uneven. It is estimated that most hospitals have at least some form of clinical information system in place in one or more wards, and that this will spread to include all units of all hospitals over the next decade. Practitioners, especially small offices, are less likely to keep electronic patient data or use other HIT solutions; estimated penetration is around 70% but quickly rising. The increasing penetration of HIT also has broader implications for the market, as interoperability issues arise, data protection and security become more important, and advanced communications options become standard requirements for a whole range of medical devices.
Cutting-edge HIT, including artificial intelligence, clinical decision support, big data applications, telemedicine, and telemonitoring, are attracting interest and there are scores of pilot programs running through insurance providers and hospitals. In the private sector, physicians, diagnostic institutes and hospitals are starting to invest in online patient portals, registration and appointment-making systems, and other HIT services. The widespread use of smartphones, online shopping and other internet and mobile services forecasts quick adoption of various health apps, and the Austrian startup scene includes scores of promising HIT applications.
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Registration Process
For medical devices, EU certification and approval is required. The type of certification and registration required depends on the class of the device. This classification process has recently (2017) been updated and made significantly stricter. For guidance, please see:
https://ec.europa.eu/growth/sectors/medical-devices/regulatory-framework_en
Registration in Austria is required if 1) Austria is the initial European market in which the product will be sold, and 2) the seller/reseller has a presence in Austria. Registration is also required for testing labs and certifying bodies. For all other circumstances, registration is voluntary. There is no cost associated with the registration, which is done online. For more about the medical device register in Austria, please see:
https://www.medizinprodukteregister.at/draft/de/english-version#1a
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Reimbursement
Austria’s statutory national health insurance program covers 99% of the population (over 8.5 million) and is built around 21 different statutory insurance carriers, each with somewhat different fee and coverage structures. Membership is mandatory and based on geographic or professional status, and fees are a function of income/salary. All carriers are members of a powerful national umbrella organization called the Hauptverband der oesterreichischen Sozialversicherungstraeger (Main Association of Austrian Social Insurance Carriers) that coordinates various coverage decisions and plays an important role in deciding which therapies are reimbursed.
After passing legislation in December 2018, the new structures were expected to be in place in January 2020; however, the government underwent abrupt change in early 2019with snap elections leaving the future of these reforms uncertain.
Generally, treatment deemed necessary and effective by insurance carriers is covered, with modest to significant co-payment for dental and vision care as well as health aids. With very few exceptions, products designed to be used in a hospital setting must be officially recognized as a reimbursable treatment option under the Austrian LKF (Austria’s disease-related group points system) to be viable in this market. The reimbursement decision is based on a determination by a commission organized by the Ministry of Health that includes various stakeholders, including physicians, insurance carriers, and public administrators. This is a long and arduous process, and it often takes two years or more until the device is officially recognized as a reimbursable treatment option under the LKF.
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Barriers
While there are no specific barriers to market entry, gaining access to reimbursement can present a significant challenge for companies with innovative therapies. Another challenge is the certification according to the 2017 Medical Device Regulation, which presents a set of issues: bottleneck for certification due to lack of notified bodies (a real threat to the existence of around 30% of the smaller companies on the market, including potential distribution partners) and a general wariness of new projects and partnerships among distributors of medical devices (until they fully understand how the new regulations will impact their businesses).
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Procurements and Tenders
The central procurement agency in Austria is the “Bundesbeschaffung GmbH”, a limited liability company owned by the Ministry of Finance. Follow this link for more detailed information: http://www.bbg.gv.at/english/about-the-fpa/
There are three thresholds to keep in mind when considering public tenders:
- Procurements worth less than €100,000 are not subject to tendering regulations and can be purchased directly by the healthcare provider/holding company
- Procurements worth more than €100,000 but less than €209,000 are subject to Austrian tendering regulation
- Procurements that exceed a value of €209,000 must be tendered through the EU. EU tenders can be found in the TED database: http://ted.europa.eu/TED/main/HomePage.do
There are no restrictions barring U.S. companies from participating in these tenders, but expect to be asked to demonstrate the capacity to reliably fulfill the contract. The most common way to establish this is to have your company’s eligibility assessed by the Austrian Register of Tenderers (ANKÖ) and be included in their database:
https://www.ankoe.at/en/homepage.html
While there are no special regulations for the procurement of healthcare related goods, procurements and tenders of healthcare related services may be subject to very specific laws under the “Bundesvergabegesetz” appendix IV:
https://www.ris.bka.gv.at/GeltendeFassung.wxe?Abfrage=Bundesnormen&Gesetzesnummer=20007693
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Trade Events
Currently the European Congress of Radiology is Austria’s most important international event in the healthcare sector: https://www.myesr.org/congress
Austrian buyers attend the large German shows; here is a list of German shows that are supported by the U.S. Commercial Service:
https://www.auma.de/en/exhibit/find-your-exhibitions
Vienna is also a lively conference location, and every year there are numerous medical conferences. Follow this link for a current list of conferences planned in Vienna: http://conferences-in-vienna.info/en/conference-calendar.html
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U.S Commercial Service Contact Information
Name: Marta Haustein
Position: Senior Commercial Specialist and Health IT Team Lead for Europe
Email: marta.haustein@trade.gov
Phone: +43 1 31339-2205
