Last post I noted that many Austrians assume that public healthcare is a guaranteed public good. Today I will examine how this mentality endangers the continued functioning of the system. While I will only examine Austrian healthcare, Austria can serve a proxy for similar scenarios in other countries.

Healthcare is financed in Austria primarily through government subsidies and compulsory nationalized health insurance. Funding is raised through various taxes and health insurance contributions deducted directly from wage earnings. As such healthcare has a capacity limit. The total volume available is constrained by the government’s ability to levy taxes and charge insurance premiums.

Unfortunately, healthcare costs are exploding. In 2018, two years before COVID-19, experts warned of impending collapse. Most alarming is that over 42% of capital outlays are spent on treating chronic, yet preventable, conditions such as Type II diabetes and high blood pressure.

Too little focus is placed on prevention and personal responsibility. Individuals are allowed to neglect their health over years subsequently reaching critical conditions where they require dialysis and/or hospital care because of strokes or cardiovascular emergencies.

Annual Austrian healthcare expenditures are 1,000 euros higher per capita than the EU average, although average Austrian life expectancy is not significantly above the EU average. On average Austrians suffer approximately 20 years from preventable chronic illnesses before dying at extreme costs to the healthcare system. The situation is dire. Critical medical infrastructure is undeniably at risk.

Austria has some of the steepest taxes in the EU regardless of category – sales, labor, consumption, capital gains, etc. – as well as some of the highest social security contributions. Increasing healthcare system availability while maintaining current quality is unlikely feasible by levying additional taxes or raising insurance premiums. Any expansion of services can only be achieved through:

  • budget reductions elsewhere. Such cutbacks, however, would limit the ability of the government to provide other critical services such as education, national defense, or public transportation. These tradeoffs would not be without societal costs.
  • reducing overhead. Overhead optimization, however, can only achieve limited gains. At some point, further optimization is no longer possible without reductions in service quality.
  • decreasing demands placed on the healthcare system.

It is the third course of action that the government has taken with ongoing COVID-19 lockdowns. Are these actions justifiable? Can they be extrapolated to address demands placed on the system by preventable chronic illness? Leave a comment.

Image by Myriams-Fotos from Pixabay

2 thoughts on “Chronic illness and healthcare availability

  1. Have a read up on anchor institutions, and the civic duty of the public, private, and voluntary sector in working together to combat social challenges.

    I was privileged to attend a small meeting of ten or so people a few years back in which the formidable Hazel Blears (a Cabinet Minister to Tony Blair’s Govt) gave an outstanding presentation on how she pulled together the different anchors within society to work together to help tackle Dementia.

    Too many organisations who rely on their place (hospitals, universities, municipal councils) hand wring about the problems they face, believing the answers should come from somewhere else. I’m a proponent of forcing any organisation, that receives a penny of public money, to meaningfully collaborate with others in their locality to tackle just one major issue facing their community.

    If they work in a cooperative fashion they might figure out that social issues can’t be tackled by one policy change by central Govts, more so it requires hundreds of small decisions taken by many organisations who have a deep understanding of their locality and the problems facing those people.

    For argument’s sake, if one, albeit fairly large, city set its strategic focus on solving the obesity crisis …they could pull together R&D from private sector organisations & from Higher Education…they could pool the collective knowledge of HE & healthcare in their area to provide high-quality nutrition & physical activity programmes…the councils could supplement this work by targeting funding in the areas that have high levels of obesity. Really there a multitude of actors that could join in, and in many different ways.

    This type of work would be impactful and certainly contribute towards the ‘prevention is better than the cure’ principle.

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