Start of the Care Reform Process

Based on a broad participation of affected persons, relatives, long-term care workers and long-term care service providers, the Austrian Federal Government launched a long-term care reform process in the summer of 2020. WIFO is part of a "Long-term Care Task Force" and coordinates the working group "Foresighted Planning and Design".

According to WIFO's long-term care expert Ulrike Famira-Mühlberger, the proportion of people in need of long-term care will multiply in the coming decades and the cost increases for long-term care services in particular will develop accordingly.

At present, Austria is in the lower third of the Western European comparison in terms of long-term care expenditure as a percentage of GDP. Scandinavian countries – or even the Netherlands – already spend as much on care today as is forecast for Austria only in 2050.

However, expenditure on long-term care is not only a cost factor: calculations on the economic impact of public expenditure on long-term care services show that for every euro spent on long-term care services there is a domestic value added of 1.7 euros and 70 cents in taxes and social security contributions. The economic multipliers of long-term care services are relatively high due to the high share of wages and salaries. This rapidly growing economic sector is becoming an increasingly important economic factor in an ageing society.

Which issues should be addressed in the reform of the care system from WIFO's point of view?

1. The different conditions for people in need of long-term care in the Länder should be reconsidered. It cannot be explained rationally and economically why, for example, the co-payments for mobile services or the personnel key in nursing homes differ between the Länder. There is a need for action here.

2. There is a need for improved cooperation between the Federal Government, the Länder and local communities. In a recently published study, WIFO has shown that municipalities hardly benefit from the Länder's demand and development plans. The municipalities prefer to establish regional long-term care information centres with monitoring functions. In this way, local citizens in need of long-term care would have a regional contact point and a systematic survey of care needs in a region would be possible. This would improve regional planning.

3. Due to the large number of financial flows between state units, the financing structures of long-term care are extremely complex. What is needed here is an unbundling that allows financing from one source.

4. Probably the biggest challenge in long-term care will be to be able to recruit the necessary staff. Both mobile and inpatient long-term services are already struggling with staff shortages. Measures must be taken here that go beyond traditional school-based training. Financed further training and financially supported retraining opportunities for women returning to work must be further expanded. And finally, one thing is clear: without migration, it will not be possible to meet the personnel requirements in some regions.

© Hans Hofer