Brussels, 17/03/2009 (Agence Europe) - In a judgment delivered on 10 March, the Court of Justice of the European Communities ruled that Austrian legislation on setting up private health establishments was not compatible with Community law. The Court ruled that freedom of establishment precluded the requirement of prior authorisation on the basis of an assessment of the health needs of the population where that rule applies to independent outpatient dental clinics, but not to group practices and where the power of national authorities is not “adequately circumscribed”.
Austrian legislation on health institutions requires prior administrative authorisation for the setting up of an independent outpatient clinic, that is, an organisationally independent establishment for the examination and treatment of persons who do not require admission to hospital. Authorisation can only be granted if “there is a need” for a new institution, having regard to the care already available, inter alia from medical practitioners contracted to sickness funds. It is for the provinces to ensure that the legislation is enforced. Thus, the governments of Upper Austria and Vienna rejected applications for authorisation from the German company Hartlauer which wished to set up private outpatient dental clinics in Vienna and Wels, Upper Austria. Both governments argued that dental care was adequately ensured by public and private non-profit-making health establishments and other contractual practitioners offering comparable services. Thus, they concluded that there was no need to set up private outpatient dental clinics. Hartlauer brought proceedings before the Verwartungsgerichtshof (Administrative Court), which then referred questions to the Court of Justice on the compatibility of Austrian legislation with freedom of establishment.
In its judgment, the Court observed that the Austrian legislation constitutes a restriction of freedom of establishment since, firstly, the businesses concerned may have to bear the additional administrative and financial costs of the authorisation and, secondly, the national legislation reserves the pursuit of self-employed activity to certain economic operators who satisfy pre-determined requirements, compliance with which is a condition for the issue of authorisation. In this particular case, application of the Austrian rules had the effect of depriving Hartlauer of access to the market in dental care in Austria.
The Court examined whether the contested provisions might be objectively justified by over-riding reasons in the general interest, such as preventing serious harm to the financial balance of the social security system, an argument advanced by Austria. On this, the Court found an inconsistency: prior authorisation based on the assessment of the needs of the market is required to be able to set up and operate new independent outpatient dental clinics, but not set up new group practices, even though these two categories of service providers may have comparable features and are thus likely to similarly affect the attainment of the planning objectives pursued by national authorities, in particular the prevention of serious harm to the financial balance of the social security system. The Court also found that the assessment of the needs of the market was not based on a condition capable of adequately circumscribing the exercise, by the national authorities, of their discretionary powers. In Vienna and Upper Austria, assessment of need is conducted on different criteria.
Consequently, the Court ruled that the requirement of prior authorisation based on an assessment of the health needs of the population was contrary to the principle of freedom of establishment, since it applies to independent outpatient dental clinics but not to group practices, and is not based on a condition capable of adequately circumscribing the exercise by national authorities of their discretionary powers. (O.L./transl.rt)