Opinion of the Advocate-General

Opinion of the Advocate-General

1. In the present proceedings, the Verwaltungsgerichtshof (Administrative Court, Austria), seeks a ruling from the Court concerning the compatibility with Community law of national rules which make the establishment and operation of a health institution subject to obtaining prior administrative authorisation based on an assessment of the health needs of the population.

2. Under the Austrian legislation, authorisation to establish and operate a health institution in the form of an independent outpatient clinic is granted only if there is a need for the services offered by the proposed health institution. That assessment is carried out at provincial level and takes into account the existing provision of care offered by service providers working on a contractual basis with sickness funds, whether those are public or private non-profit-making health institutions, establishments owned by the sickness funds or independent dentists.

3. This reference has been made in proceedings between a German undertaking, Hartlauer Handelsgesellschaft mbH, (2) and the Wiener Landesregierung (Government of the Province of Vienna), on the one hand, and the Oberösterreichische Landesregierung (Government of the Province of Upper Austria), on the other. Hartlauer had applied for authorisation to establish private health institutions in those provinces in the form of independent outpatient dental clinics. The Wiener Landesregierung, by decision of 29 August 2001, and the Oberösterreichische Landesregierung, by decision of 20 September 2006, decided not to grant that authorisation (‘the first contested decision’ and ‘the second contested decision’ respectively) on the ground that, in their view, there was no need for the services which Hartlauer proposed to offer.

4. The referring court asks whether the Austrian legislation is compatible with the principle of freedom of establishment enshrined in Article 43 EC.

5. In this Opinion, I will show that national rules which make the establishment and operation of a health institution subject to obtaining prior authorisation based on an assessment of the health needs of the population constitute a restriction on the freedom of establishment.

6. I will also show that, although a Member State may validly impose restrictions on the exercise of that freedom with the aim of maintaining the financial balance of its social security system and of ensuring provision, in its territory, of a balanced, high-quality medical service open to all insured persons, the measure in question must none the less be appropriate for the purpose of achieving that objective and must not go beyond what is necessary for that purpose. Against that background, I will examine the proportionality of the legislation at issue, inasmuch as the establishment in Austria of a group dental practice may be authorised without it being necessary to undertake an assessment of the health needs of the population. In the absence of sufficient information, I will suggest that the Court refer back to the national court the task of assessing whether those two entities are active in the same market.

I – Legal background

A – Community law

7. The first paragraph of Article 43 EC prohibits restrictions on the freedom of establishment of nationals of one Member State in the territory of another Member State. In accordance with the second paragraph of Article 43 EC, freedom of establishment includes the right to take up and pursue activities as self-employed persons and to set up and manage undertakings.

8. Pursuant to the first paragraph of Article 48 EC, companies or firms formed in accordance with the law of a Member State and having their registered office, central administration or principal place of business within the European Community are also to enjoy the rights conferred by Article 43 EC.

9. Article 47(3) EC provides that, in the case of the medical and allied and pharmaceutical professions, the progressive abolition of restrictions on the freedom of establishment is to be dependent upon coordination of the conditions for their exercise in the various Member States. Dental care was the subject-matter of Directives 78/686/EEC (3) and 78/687/EEC. (4)

10. The Council of the European Union and the Commission of the European Communities have acknowledged that the direct effect of Article 43 EC, recognised in the Reyners judgment (5) with effect from 1 January 1970, the end of the transitional period, also applied to healthcare professions. (6) Moreover, medical and allied and pharmaceutical professions have been the subject of co-ordinating directives. (7)

11. In accordance with Article 46(1) EC, Article 43 EC does not preclude restrictions justified on grounds of public health.

12. Finally, in accordance with Article 152 EC, the Community has only limited competence in respect of public health. Community action is thus fully to respect the responsibilities of the Member States for the organisation and delivery of health services and medical care.

B – National law

13. The Republic of Austria has organised its health system and the provision of medical care in its territory on the basis of the areas of competence reserved to it.

1. The legislation relating to the establishment and operation of heath institutions

14. Pursuant to Article 12(1)(1) of the Federal Constitutional Law (Bundes‑Verfassungsgesetz; ‘B-VG’), the legislation relating to health institutions is enacted at federal level. The implementing measures of the B-VG are then adopted by the provinces.

a) The federal legislation

15. When the first contested decision was adopted, the establishment and operation of health institutions was governed, in Austria, by the Federal Law on hospitals (Krankenanstaltengesetz). (8) That law was amended in 2006 – the year during which the second contested decision was adopted – by the Federal Law on hospitals and sanatoriums (Krankenanstalten- und Kuranstaltengesetz). (9)

16. The provisions applicable to the present disputes, that is to say, Paragraphs 1 to 3 of the KAG and of the KAKuG, are worded almost identically. For the sake of clarity, I will refer only to the provisions of the KAKuG, in the version in force when the second contested decision was adopted. (10)

17. Paragraph 1 of the KAKuG defines health institutions as establishments intended to ascertain and monitor the state of health of patients by means of examinations, to carry out surgery, to prevent and cure illnesses by means of treatments, to provide services relating to childbirth and medically assisted conception and to provide medical and palliative care to patients suffering from chronic conditions.

18. Under Paragraph 2(1)(7) of the KAKuG, independent outpatient clinics (radiology centres, outpatient dental clinics and similar establishments) are health institutions. These are establishments which are independent in terms of their organisation, used to examine or treat persons whose condition does not require admission to a hospital. The intended use of an independent outpatient clinic is not altered by the fact that that clinic has an appropriate number of beds, necessary for short-term stays for the purposes of diagnostic and therapeutic outpatient treatment. (11)

19. Pursuant to Paragraph 3(1) of the KAKuG, the establishment and operation of a health institution requires prior authorisation from the provincial government. The application for authorisation must give precise details of the purpose and services of the proposed health institution.

20. In accordance with Paragraph 3(2)(a) of the KAKuG, that authorisation may be granted only in the event that, having regard to the purpose of the institution stated in the application and the range of services envisaged and to the health institutions plan of the province concerned , and having regard to the existing provision of care by public, private non-profit-making health institutions or other institutions contracted to the sickness funds and, with regard to the establishment of a health institution in the form of an independent outpatient clinic, also having regard to the provision of care offered by the outpatient departments of those health institutions and by established doctors working on a contractual basis with sickness funds, institutions owned by sickness funds and institutions contracted to sickness funds and, with regard to dental outpatient clinics, also having regard to dental practitioners and established ‘Dentisten’ working on a contractual basis with sickness funds, there is a need for such a clinic.

b) The implementing measures adopted by the provinces

21. At the time material to the dispute concerning the Wiener Landesregierung, the applicable federal law was the KAG. From the decision for reference, (12) I understand that that law was implemented in that province by the Viennese Law on health institutions 1987 (Wiener Krankenanstaltengesetz 1987). (13)

22. In accordance with Paragraph 4(2) of the Wr. KAG, authorisation to establish a health institution, such as an independent outpatient clinic, may be granted only if:

‘…

(a) in accordance with the stated purpose of the institution and the services proposed to be offered, having regard to the already existing care offered by public, private non-profit-making, and other health institutions with contracts with sickness funds, and, in the case of the setting-up of a health institution in the operational form of an independent outpatient clinic, having regard also to the care offered by established doctors contracted to sickness funds, establishments owned by sickness funds and establishments contracted to sickness funds, and, in the case of outpatient dental clinics, having regard also to established dentists (Dentisten) contracted to sickness funds, there is a need;

…’

23. At the time material to the dispute concerning the Oberösterreichische Landesregierung, the applicable federal law was the KAKuG. From the decision for reference, (14) I understand that that law was implemented by the Upper Austrian Law on health institutions 1997 (Oberösterreichisches Krankenanstaltengesetz 1997). (15)

24. Paragraph 5 of the Oö. KAG states as follows:

‘(1) Authorisation to set up an institution is to be granted … if

1. there is a need within the meaning of subparagraph 2,

…

(2) The need for a health institution with the stated purpose and the services proposed to be offered is to be assessed, taking into account the maximum number of beds classified under the health institutions plan of Upper Austria …, having regard to the already existing care offered within a reasonable distance by public, private non-profit-making, and other health institutions with contracts with sickness funds, and, in the case of the setting-up of a health institution in the operational form of an independent outpatient clinic, having regard als o to the care offered by outpatient clinics of those health institutions and by established doctors contracted to sickness funds, establishments owned by sickness funds and establishments contracted to sickness funds, and, in the case of outpatient dental clinics, having regard also to established dentists (Dentisten) contracted to sickness funds. …’

25. The relevant legislation for the purposes of reviewing the second contested decision thus differs from that in force at the time of adoption of the first contested decision to the extent that, since the adoption of the KAKuG, verification of the need must take account of the provision of care offered by the outpatient departments of the public or private non-profit-making health institutions and other health institutions owned by the sickness funds covered by the law.

2. The legislation governing the exercise of the profession of dental practitioner

26. Exercise of the medical profession is governed in Austria by the Law on doctors (Ärztegesetz) of 10 November 1998. (16) That law was adopted after the accession of the Republic of Austria to the European Union in order to introduce, inter alia, a new system of training for access to specialisation in dental medicine. Since 1 January 2006, practice of the profession of dental practitioner is regulated by the Law on dental practitioners (Zahnärztegesetz). (17)

27. A group practice, within the meaning of Paragraph 52a of the Law on doctors, as amended, and Paragraph 26 of the Law on dental practitioners, as amended, may be established only in the legal form of a partnership. (18) That may comprise only partners who are personally liable and authorised to practise independently as dental practitioners. Employment, on a salaried basis, of other doctors or dental practitioners, unlike in outpatient clinics, is not permitted.

3. The legislation governing the social security system

28. The Republic of Austria has, in its national legislation, laid down the modus operandi of its social security system and has established, for each risk, the level of services and their method and level of financing.

29. The Republic of Austria has organised a compulsory sickness insurance scheme managed by the sickness funds. It is financed from contributions paid by insured persons and employers and an annual payment made by the State, from the public purse, to the general sickness insurance fund.

30. The Austrian social security system is mixed. (19) It uses, on the one hand, a system of benefits in kind, under which the social security scheme pays on behalf of the patient for all or part of the medical and hospital care which he receives and, on the other, a reimbursement scheme, under which the social security scheme reimburses the patient for all or part of the expenses which he has incurred for that care.

31. The scheme of benefits in kind is set out in the General Law on social security (Allgemeines Sozialversicherungsgesetz). (20)

32. That scheme is based on a system of framework agreements concluded between the national federation of social security organisations and the respective bodies legally representing the service providers.

33. The content of those framework agreements is laid down, as follows, in Paragraph 342 of the ASVG:

‘…

1. Determination of the number and local distribution of doctors and group practices under contract to sickness funds in order to ensure, taking account of local and transport conditions and population density and structure, adequate medical care within the meaning of the first sentence of Paragraph 338(2) for insured persons and members of their family; as a rule, there must be a choice between at least two doctors under contract to sickness funds or one doctor and one group practice under contract to sickness funds accessible within a reasonable period of time;

2. Selection of doctors and group practices under contract to sickness funds, conclusion and termination of the agreements to be concluded with them (individual agreements);

3. Rights and obligations of doctors and group practices under contract to sickness funds, in particular with regard to their rights to payment for medical care;

…’

34. Under Paragraph 338(3) of the ASVG, those provisions are applicable mutatis mutandis to the rules governing the relationships between the social security bodies and health institutions. The sickness funds conclude agreements with health institutions and independent medical practitioners in which they determine in advance the extent and quality of the services to be provided and the financial contribution the fund will make.

35. Under the Austrian legislation, if the insured person does not consult a medical practitioner under contract to the sickness fund but sees a doctor of his choice, he receives reimbursement of the treatment costs incurred up to 80% of the amount which the sickness fund would have had to pay if he had seen a contractual practitioner. (21)

II – Facts

36. By the first contested decision, the Wiener Landesregierung refused to grant Hartlauer authorisation to establish, in Vienna’s 21st District, a private health institution in the form of an independent outpatient dental clinic. That decision was based on Paragraph 4 of the Wr. KAG.

37. The Wiener Landesregierung based its decision on an expert’s report submitted by the administration. That report concluded that the provision of dental care in Vienna was covered sufficiently by public health institutions, private non-profit-making institutions and other health institutions contracted to sickness funds, independent doctors contracted to sickness funds, institutions owned by sickness funds and those contracted to those funds, and ‘Dentisten’ contracted to sickness funds, offering comparable services. That assessment was made on the basis of the ratio of the number of inhabitants to the number of dental practitioners (1 practitioner per 2 207 inhabitants in Vienna in 1999). On the basis of the expert’s findings, the Wiener Landesregierung reached the conclusion that the establishment of a health institution would not facilitate, accelerate, intensify or otherwise substantially improve the dental care of the inhabitants of Vienna and that there was therefore no requirement for the proposed outpatient dental clinic.

38. For identical reasons, by the second contested decision, the Oberösterreichische Landesregierung refused to grant Hartlauer authorisation to establish an independent outpatient dental clinic in the town of Wels. That decision was based on Paragraphs 4 and 5 of the Oö. KAG.

39. For the purposes of its investigation, the Oberösterreichische Landesregierung relied on the observations of the Council of the Austrian Order of Dental Practitioners. That investigation was carried out on the basis of a criterion based on the waiting time for an appointment with the care providers listed in Paragraph 5(2) of the Oö. KAG, including those working in the outpatient departments of the health institutions concerned. The Oberösterreichische Landesregierung reached the conclusion that there was no need for the outpatient clinic in question, since, in its view, waiting times were not unacceptable and patient care in the health district to be covered by that clinic was adequate.

40. Hartlauer therefore appealed against each of those decisions to the Verwaltungsgerichtshof, which joined the two procedures.

III – The questions referred for a preliminary ruling

41. The Verwaltungsgerichtshof has doubts as to the compatibility of the legislation at issue with the freedom of establishment guaranteed by Article 43 EC. Although that legislation does not discriminate against undertakings established in other Member States, the national court asks whether it is not liable to impede or render less attractive the exercise of that basic freedom.

42. In a judgment of 7 March 1992, the Verfassungsgerichtshof (Constitutional Court, Austria) has already stated that the legislation at issue constitutes a disproportionate obstacle to the freedom to exercise professional activities guaranteed in Article 6(1) of the Basic Law on the general rights of citizens (Staatsgrundgesetz über die allgemeinen Rechte der Staatsbürger) when it has the effect of protecting for-profit private health institutions from competition.

43. However, in a judgment of 10 March 1999, the same court held that medical care of the population provided by non-profit-making institutions took priority. Those institutions, which carry out their activities as part of their public service duties, constituted an essential element of the medical care system, thus ensuring protection of public health. It was therefore appropriate to ensure their economic existence. In those circumstances, legislation which tended to protect those institutions from competition was compatible with Article 6 of the Basic Law on the general rights of citizens, provided, however, that it was not disproportionate. The Verfassungsgerichtshof took the view that the disputed legislation helped to maintain the balance in the Austrian sickness insurance scheme, which worked on the basis that care is provided as a priority by independent doctors under contract to the sickness funds.

44. It is in the light of those considerations that the Verwaltungsgerichtshof decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling:

‘(1) Does Article 43 EC (in conjunction with Article 48 EC) preclude the application of national legislation under which authorisation is required to set up a private health institution in the operational form of an independent outpatient clinic for dental medicine (outpatient dental clinic) and authorisation is to be refused if, according to the stated purpose of the institution and the services proposed to be offered, having regard to the existing provision of care by established doctors contracted to sickness funds, establishments owned by sickness funds and establishments contracted to sickness funds and by established dentists (Dentisten) contracted to sickness funds, there is no need for the planned outpatient dental clinic?

(2) Is the answer to Question 1 any different if the existing provision of care by outpatient departments of public, private non-profit-making and other health institutions contracted to sickness funds is also to be included in the examination as to need?’

IV – Assessment

A – Preliminary observations

45. As I have stated, the Community has only limited competence in the area of public health. It can therefore act only to complement the actions of Member States and its actions must fully respect the responsibilities of those States as regards the organisation, planning and provision of health services.

46. Nevertheless, the Court has accepted that that restriction on the Community’s legislative power does not call into question the obligation on the Member States to comply with Community law and, in particular, the provisions relating to the freedoms of movement when exercising the powers reserved to them. (22) Achievement of the fundamental freedoms guaranteed by the Treaty therefore inevitably requires the Member States to adapt the organisation of their health systems.

47. Application of the principle of free movement of goods and services may, for example, affect the homologation procedures for medical equipment or the conditions of supply of medicinal products to hospitals. (23) The implementation of that principle has also led the Community legislature to unify procedures for marketing authorisations in respect of medicinal products and to regulate treatment of waste.

48. The Court has also defined a number of fundamental principles relating to the mobility of patients within the Community and the financing of the cross-border provision of medical services. I am thinking, inter alia, of the judgments in Kohll , (24) Smits and Peerbooms , Müller‑Fauré and van Riet , (25) Watts (26) and Stamatelaki . All those cases arose against the particular background of the coexistence of different national health systems within an internal market common to 27 Member States. They have given the Court the opportunity of stating the conditions on which patients may, under Article 49 EC, receive medical treatment in another Member State and be reimbursed for the costs incurred for that treatment by the national sickness insurance funds of which they are members.

49. With regard to the mobility of health professionals within the Community, the Court has ruled on many occasions on the conditions for taking up and pursuing the profession of doctor or dentist from the point of view of the mutual recognition of diplomas. (27)

50. However, it appears to me that the Court has never been asked to rule on the compatibility of national legislation which, like that at issue in the main proceedings, makes the establishment of health professionals in the host Member State subject to economic and social considerations relating to the market in the provision of healthcare.

51. In that regard, it is important to keep in mind that, although healthcare remains a service which is ‘public’ in nature, it entails a cost which the Member States seek to identify and control as far as possible.

52. The provision of healthcare, in all those States, is, in essence, paid for by public funds, which gives rise to specific conduct and renders the financing mechanisms complex.

53. The financial relationship between the patient and the healthcare provider requires the intervention of various parties which collect the resources, bring them together and allocate them. Those steps must enable the financing system to ensure equal access for all members of the scheme to quality care. They must also enable efficient use of limited public resources.

54. To that end, the Member States try to find new sources of financing by calling on the private sector. The introduction of market mechanisms in the health sector has transformed the frontier between the public health sector and the private health sector and new types of health institutions are emerging with new financing mechanisms. Public health institutions are thus no longer the only ones active in the public health service since private institutions may also be associated therewith. (28) Private institutions may carry out activities for profit, such as clinics, or may be non-profit-making, such as institutions owned by foundations, religious orders or mutual societies. The fact of belonging to one or the other of those sectors affects the legal system applicable to those institutions and their financing system.

55. Healthcare is therefore a service offered in an increasingly diversified manner and the opening of that market to service providers established in other Member States accentuates that trend.

B – The first question referred

56. By its first question, the national court asks essentially whether Articles 43 EC and 48 EC are to be interpreted as precluding a Member State’s legislation which makes the establishment and operation of a health institution, in the form of an independent outpatient dental clinic, subject to obtaining prior administrative authorisation based on an assessment of the health needs of the population.

57. As I have stated in my preliminary observations, Community law does not harmonise the provision of health services. Member States are therefore entitled to organise their health system and arrange the provision of medical care in their territories in accordance with the health priorities which they have set. In the absence of common or harmonised rules, the Member States remain, furthermore, free to decide the level at which they intend to ensure protection of public health and the means by which that level is to be achieved, while complying with the principle of proportionality. (29)

58. Nevertheless, it is apparent from established case-law that, when exercising that power, Member States must comply with Community law, in particular the provisions on the freedoms of movement guaranteed by the Treaty. (30)

59. A hospital, medical or paramedical action, such as the provision of dental care, constitutes an economic activity which must be subject as such to the rules of the internal market. That analysis is corroborated by the terms of Article 47(3) EC with regard to freedom of establishment.

60. Thus, the measures taken by a Member State to regulate the provision of hospital or medical care must not infringe the rules of the Treaty relating to the freedoms of movement, including the freedom of establishment. (31)

61. It is in the light of that freedom that the compatibility of the Austrian legislation must be examined, since, in a situation such as that at the origin of the disputes in the main proceedings, an undertaking lawfully established in Germany is seeking to establish itself in Austria in order to offer dental care there.

62. The freedom of establishment laid down in Articles 43 EC and 48 EC confers on companies or firms formed in accordance with the law of a Member State the right to pursue an independent activity in another Member State and to exercise that activity permanently under the same conditions as companies or firms whose registered office is in that State. That fundamental freedom extends to the forming and management of undertakings and to the establishment of agencies, branches and subsidiaries. Article 43 EC thus requires the abolition of discriminatory measures.

63. It is also clear from settled case-law that all measures, even those applicable without distinction, which prohibit, impede or render less attractive the exercise, by Community citizens, of the freedom of establishment constitute restrictions contrary to the Treaty. (32)

1. The existence of a restriction on the freedom of establishment

64. In accordance with the Austrian legislation, the establishment and operation of a health institution in the form of an outpatient dental clinic are authorised only if there is a need for the services which that institution proposes to offer. That legislation applies without distinction to all entities seeking to establish and operate a health institution, without distinction as to their State of origin.

65. Under Paragraph 3(2)(a) of the KAG, which was the provision applicable at the time the first contested decision was adopted, the existence of a need is to be assessed, inter alia, having regard to the care already offered by public health institutions, private non-profit-making institutions and other health institutions contracted to sickness funds, independent medical practitioners contracted to sickness funds, institutions owned by the sickness funds and those contracted to those funds, and ‘Dentisten’ contracted to sickness funds.

66. In accordance with Paragraph 3(2)(a) of the KAKuG, which was the provision applicable at the time the second contested decision was adopted, the existence of a need is also to be assessed having regard to the care offered by the outpatient departments of those health institutions.

67. In the context of that assessment of need, the competent authorities therefore take account only of the care offered by persons under contract to the sickness funds.

68. According to the national court, a need exists if the establishment of the outpatient clinic would facilitate, accelerate, intensify or otherwise substantially improve the medical care of the inhabitants.

69. Accordingly, no need exists if the existing provision of care can meet the existing demand in the healthcare area of the proposed institution.

70. Assessment of the health needs of the population is carried out at a local level, by the province concerned, using various methods. Thus, in the Province of Vienna, that assessment was made on the basis of the ratio of the number of inhabitants to the number of dental practitioners in the healthcare area of the proposed clinic. It is apparent from documents in the file that that number is not fixed in advance. The medical report in question found that the needs were ‘already covered by existing institutions of the same type’ and that the situation was ‘good overall’. (33) However, in the Province of Upper Austria, the existence of a need was determined on the basis of the waiting time for an appointment. The assessment was made having regard to the answers provided by dental practitioners practising in the healthcare area of the proposed outpatient clinic.

71. In the context of the present disputes, it seems evident to me that the legislation at issue constitutes an obstacle to the right guaranteed by Article 43 EC, (34) notwithstanding the absence of discrimination on grounds of the nationality of the professionals concerned. (35)

72. By instituting a procedure of prior authorisation for the establishment and operation of a health institution, the very object of that legislation restricts the freedom of establishment.

73. Although it does not prevent undertakings established in another Member State from establishing in Austria, that legislation requires administrative authorisation to be obtained which is not granted unless there is a health need for the population. That need is assessed in the light of economic and social considerations connected to the healthcare market.

74. As the Republic of Austria itself recognises, the legislation at issue tends to limit the number of healthcare providers on its territory, in order better to protect from competition those providers already established on the market and contracted to sickness funds. (36) Thus, if the provision of care offered under the aegis of the sickness funds is sufficient, establishment of a health institution, such as a clinic, is refused. That was the situation in the main proceedings. Such legislation therefore makes it more difficult or, in any event, less attractive to establish and operate a health institution within Austria. (37)

75. In the light of the foregoing, I therefore consider that national rules which make the establishment and operation of a health institution subject to obtaining prior authorisation based on an assessment of the health needs of the population constitute a restriction on the freedom of establishment guaranteed by Article 43 EC.

2. Justification of the restriction found on the freedom of establishment

76. A restriction such as that laid down by the Austrian legislation may, nevertheless, comply with Community law if it meets the following four conditions. First, it must be applied without discrimination. Next, it must be justified on legitimate grounds or by an overriding reason in the public interest. Finally, it must be appropriate for securing the attainment of the objective pursued and must not go beyond what is necessary in order to attain it. (38)

a) The Austrian legislation is applicable without distinction

77. As I have shown, the legislation at issue applies to all entities wishing to establish and operate a health institution, without discrimination as to their State of origin.

b) Protection of public health and maintenance of the financial balance of the social security system may justify measures which restrict the freedom of establishment of health institutions

78. According to settled case-law, the health and life of humans rank foremost among the assets or interests protected by the Treaty, thus permitting the Member States to restrict the freedoms of movement. (39)

79. The Court has had occasion to state the grounds which can be relied on by the Member States to justify barriers to freedom to provide services in the field of the provision of medical and hospital care. (40)

80. The Court has held that it is possible for the risk of seriously undermining the financial balance of the social security system of a Member State to constitute an overriding reason in the general interest capable of justifying an obstacle to the principle of freedom to provide services.

81. The Court has likewise acknowledged that the objective of maintaining on grounds of public health a balanced medical and hospital service open to all may also fall within the derogation provided for in Article 46(1) EC, in the interests of safeguarding public health, in so far as it contributes to the attainment of a high level of health protection.

82. Finally, the Court has repeatedly held that Article 46 EC permits Member States to restrict the freedom to provide medical and hospital services in so far as the maintenance of treatment capacity or medical competence on national territory is essential for public health, or even the survival of the population.

83. As regards hospital medical services, the Court has recognised that the number of hospitals, their geographical distribution, the way in which they are organised and the facilities with which they are provided, and even the nature of the medical services which they are able to offer, are all matters for which planning by a Member State must be possible. (41)

84. In the view of the Court, that planning is designed to satisfy various needs.

85. On the one hand, it makes it possible to ensure that there is sufficient and permanent access to a balanced range of high-quality hospital treatment in the Member State concerned.

86. On the other, it seeks to control costs and to prevent, as far as possible, any wastage of financial, technical and human resources in a context where the demand for hospital treatment is constantly rising and the supply is necessarily limited by budgetary constraints.

87. In that regard, the Republic of Austria submits that the legislation at issue constitutes an instrument of planning and control of the supply of healthcare.

88. The requirement for prior authorisation based on an assessment of the health needs of the population is intended to maintain the level of medical and hospital care offered through the sickness funds system and also helps to maintain the financial balance of the Austrian social security system.

89. According to the Republic of Austria, too large an increase in the number of service providers on the market could cause the displacement of service providers contracted to the sickness funds. Private health institutions would concentrate more on providing the more profitable services, while the healthcare providers contracted to the sickness funds would be required to offer a very full range of services, certain of which are not attractive from an economic point of view. The latter healthcare providers could therefore disappear from the market or be induced to leave certain areas, in particular rural areas, for urban areas, which would limit the medical cover of patients living outside conurbations. The legislation at issue, by controlling the number of healthcare providers in the territory, thus seeks to protect health institutions contracted to sickness funds from excessively fierce competition and allows excess capacity and imbalance in the provision of medical services to be avoided.

90. I am of the opinion that the arguments put forward by the Republic of Austria for circumscribing the establishment and operation of health institutions within its territory constitute, in the light of the case-law which I have cited, valid grounds on which to restrict the freedom of establishment.

91. First, I take the view that that case-law, developed in the context of the application of Article 49 EC, applies equally to the system of freedom of establishment. Article 46(1) EC, referred to by the Court and containing the reservation based on the safeguarding of public health, is a provision common to the freedom of establishment and the freedom to provide services. (42)

92. Second, I consider that the reasoning adopted by the Court in the context of the provision of hospital care may be extended to the provision of dental care, since dental care not limited to basic services, such as radiography or preventive care (plaque control, polishing), but also takes the form of actual surgery, such as extractions, the elimination of aesthetic deformations or certain orthodontic care, which requires qualified staff. (43) Thus, certain dental care can be provided by a practitioner in his surgery or in a medical centre, whereas other dental surgery requires a short hospital visit, for example to an outpatient department which has a wide range of equipment. It can thus be difficult to draw a distinction between hospital and non-hospital care offered in this field. (44)

93. Next, it is necessary to point out that the assessment of the health needs of the population, laid down by the legislation at issue, is a tool used in the implementation of the ‘plan for health institutions’. That plan is an instrument of healthcare planning, drawn up at provincial level, in the light of guidelines laid down by the Republic of Austria.

94. That plan permits the future provision of hospital and medical care and its geographic spread to be determined both quantitatively and qualitatively. It must thus allow development of a provision of care appropriate to the state of health of the population and to the efficiency of the existing cover. The plan must guarantee access to high-quality care and ensure that healthcare is organised in such a way as to permit maintenance and expansion of local care. Finally, it must provide for a fair balance with regard to the size, capacity and equipment of health institutions.

95. The implementation of that plan and the achievement of the objectives which it pursues depend on the financial viability of the social security system. In the context of a national health system such as that at issue, financed largely by public funds and in which financial resources are, by definition, limited, financing of healthcare is handled according to the balance of supply and demand. Planning of the provision of healthcare and the conclusion of agreements between sickness funds and care providers thus allow better control of expenditure by adjusting it to the needs of the population, according to the priorities laid down by the national authorities.

96. In the light of the foregoing, I therefore find it to be justified for a Member State to circumscribe the establishment and operation of health institutions within its territory by making prior checks on the needs of the market in order to protect public health and to maintain the financial balance of its social security system.

c) Suitability of the legislation at issue to achieve the aims which it pursues

97. It is now appropriate to consider whether the Austrian legislation is suitable effectively to protect public health and the financial balance of its social security system against the risks connected with an uncontrolled expansion of the provision of dental care.

98. It is therefore necessary to ascertain whether the conditions which must be met for the grant of the prior administrative authorisation at issue are justified in the light of the requirements set out above and whether, consequently, they satisfy the requirement of proportionality.

99. First, I consider that the prior administrative authorisation scheme laid down by the Austrian legislation lawfully circumscribes the discretionary power of the competent national authorities.

100. As the Court has held in cases relating to the reimbursement scheme for cross-border healthcare, I believe that a scheme of prior administrative authorisation for the establishment of a health professional cannot legitimise discretionary conduct on the part of the national authorities. That would have the result of negating the effectiveness of provisions of Community law relating to a fundamental freedom. (45)

101. In the view of the Court, such a scheme must be based on objective non-discriminatory criteria known in advance, in such a way as to circumscribe the exercise of the national authorities’ discretion. Furthermore, it must be based on a procedural system which is accessible and capable of ensuring that a request for authorisation will be dealt with objectively and impartially within a reasonable time. Finally, refusals to grant authorisation must be capable of being challenged in judicial or quasi-judicial proceedings. (46) To that end, refusals to grant authorisation, or the advice on which such refusals may be based, must refer to the specific provisions on which they are based and be properly reasoned in accordance with them. Likewise, courts or tribunals hearing actions against such refusals must be able, if they consider it necessary, to seek the advice of wholly objective and impartial independent experts. (47)

102. With regard to the disputes in the main proceedings, Paragraph 3 of the KAG and the KAKuG and the implementing measures adopted by the Provinces of Vienna and Upper Austria (48) set out the conditions under which authorisation to establish a health institution may be granted. That legislation is published in the Bundesgesetzblatt für die Republik Österreich , (49) so that those conditions are known in advance. With regard to the assessment of the health needs of the population, those provisions set out the criteria which are to be taken into account, that is to say, the purpose of the institution, the services which it proposes to offer, the health institutions plan of the province concerned and, finally, the existing provision of care. Furthermore, it is apparent from the decision for reference (50) that the first and second contested decisions referred to the provisions on which they were based (51) and stated the reasons why the authorities took the view that there was no need for the care services which Hartlauer proposed to offer. Finally, as shown by the main proceedings, it was possible for those two decisions to be the subject of proceedings before the Verwaltungsgerichtshof under Article 131(1)(1) of the B‑VG.

103. Second, I am of the opinion that the assessment of need which the competent national authorities are to carry out before authorising the establishment and operation of health institutions is, in many respects, an appropriate means by which to attain the objectives pursued by the Republic of Austria.

104. It seems to me that that assessment of need does indeed have the effect of organising the provision of healthcare in the territory. Carried out at a local level and taking into account the existing provision of care, it enables avoidance of a situation where certain geographical areas, such as rural areas, have insufficient cover, unlike other areas where there is a very high concentration of dentists, such as urban areas. That assessment is therefore necessary in order that the provision of medical and hospital services may meet, at a high level of quality and within a reasonable time, the demand for healthcare.

105. The assessment of need also enables effective prevention of the negative effects which could result from an uncontrolled expansion of the provision of healthcare, in particular on the economic situation of the contractual providers of services. As the Verfassungsgerichtshof stated in its judgment of 10 March 1999, cited above, that assessment protects the existence of persons and institutions which carry out their activities as part of the public service task of the sickness insurance system.

106. Under schemes such as that at issue in the main proceedings, which provide insured persons with benefits in kind, the sickness insurance bodies manage their budget by concluding agreements with medical practitioners and hospital institutions. Under those agreements, the parties determine the services contracted for and specify the availability of the services and the financial contribution which the sickness funds undertake to make. Provision is thus made in advance for the financing of all the healthcare insured persons may need, whether as outpatients or in hospital, in order to ensure that the funds do not in principle have to bear any additional expenditure.

107. In those circumstances, it appears to me legitimate that, in a social security system providing in advance not only the means by which care can be provided but also the practitioners and health institutions to provide it, the national authorities should seek to protect the contractual care providers from excessively fierce competition.

108. Furthermore, the Court has accepted that, if patients were at liberty, regardless of the circumstances, to use the services of hospitals with which their health insurance fund had no agreement, whether those hospitals were situated in the Member State or in another Member State, ‘all the planning which goes into the system of agreements in an effort to guarantee a rationalised, stable, balanced and accessible supply of hospital services would be jeopardised at a stroke’. (52) In my view, that reasoning may be transferred to the provision of care offered by outpatient clinics.

109. Thus, by taking into account, in the examination of the existing provision of care, only the services offered by practitioners contracted to the sickness funds, that assessment of the health needs of the population ensures the preservation of the contractual system and the scheme of benefits in kind. It must be recalled that that scheme enables the insured person not to pay the costs of the care he has received. Those costs are paid directly by the sickness funds. The scheme thus enables poorer patients to have access to high-quality medical and hospital care.

110. Consequently, it appears to me that national legislation which makes establishment and operation of a health institution subject to a prior assessment of the health needs of the population is appropriate to guarantee provision of a balanced, high-quality medical service open to all and to ensure the financial balance of the social security system. Such a measure is, therefore, in my view, appropriate to protect public health.

111. However, I would point out that the legislation at issue in this case does not apply to group practices, even though that type of establishment may also have the effect of competing with institutions contracted to sickness funds and already established on the market.

112. I therefore wonder whether a scheme such as that which follows from the legislation at issue in the main proceedings is suitable to ensure achievement of those objectives, since the setting-up of group practices on the market is authorised without there being a requirement to carry out an assessment of the health needs of the population. It therefore seems to me that that scheme contains an inconsistency. Be that as it may, the information supplied during the written procedure and at the hearing does not enable me to understand the reasons for such a distinction between those two types of establishment.

113. Accordingly, I consider that it will be for the national court to assess the proportionality of legislation such as the Austrian legislation, where it is such as usefully to meet the objectives which it is intended to pursue, in the light of the observations which I shall make.

114. I know that a group practice is not, under the Austrian legislation, a health institution. It may be established only in the legal form of a for-profit partnership. (53) That partnership may comprise only partners who are personally liable and authorised to practise independently as dental practitioners, unlike in outpatient clinics where salaried employment is the most usual situation.

115. With regard to the organisation and equipment of those establishments, the information which I have available in that regard is contradictory. Thus, at the hearing, the Republic of Austria denied any ‘covert discrimination’ between those entities, pointing out that tight limits are set for the expansion of group practices, in terms of their organisation, staffing, equipment and premises. (54) Those characteristics significantly distinguish group practices from outpatient clinics. However, the referring court points out that it is entirely possible for the standard of premises and equipment of group practices to approach those of outpatient clinics. That therefore means that a patient wishing to obtain medical treatment would not, in many cases, see external differences between an outpatient clinic, regarded from a legal point of view as a health institution, and a group practice.

116. In addition to the differences of legal form or of employment status of the staff, I consider that, in reality, it is appropriate to take into account the nature of the work carried out by the two entities in order to determine whether the legislation at issue is proportionate.

117. In that regard, I consider that an outpatient dental clinic and a group dental practice are likely to carry out their activities on the same market.

118. Under Paragraph 2(1)(7) of the KAG and the KAKuG, an outpatient dental clinic is intended for the examination or treatment of persons whose conditions do not require hospitalisation, and may have an outpatient treatment centre. That institution can therefore offer a wide range of care, including not only basic dental care but also outpatient care, including day surgery, such as fitting dental implants, repairing broken teeth, inlays, or extracting wisdom teeth.

119. A group practice in which dental surgeons practise may also have a wide range of equipment enabling it to offer certain forms of dental surgery. Although those operations are less onerous than those which an outpatient dental clinic may be able to offer, that does not alter the fact that those two entities can offer a certain number of services of the same nature. In that regard, Paragraph 153(3) of the ASVG states that dental care (dental surgery, preventive care and maxillodental orthopaedics) and the provision of dental prostheses are to be offered, in the form of benefits in kind, by dental practitioners, ‘Dentisten’, group practices or hospitals specifically equipped therefor, such as outpatient clinics.

120. A dental group practice can therefore be in competition with contractual providers of services in the same way as an outpatient dental clinic. Furthermore, it is not impossible that the establishment of one or several group practices, in which a large number of dentists are partners, could upset the balance provided for by the organisation and planning of the provision of care in an area.

121. Consequently, it appears to me that the appropriateness of rules such as those laid down in the legislation at issue in the main proceedings for ensuring the attainment of the objective of protection of public health may be open to discussion if it is shown that group dental practices and outpatient dental clinics have the same purpose and, in reality, offer care of the same nature.

122. Since I do not have available sufficient information regarding the nature of the medical services carried out in a group dental practice, I propose that the Court refer that question back to the national court for examination.

123. The national court should first ascertain whether those two entities actually carry out their activities on the same market. If that is the case, the national court will then have to assess whether the Austrian legislation is such as usefully to meet the abovementioned objectives, since the establishment of group practices is authorised without it being necessary to carry out a prior assessment of the health needs of the population.

124. In the light of the foregoing, I am therefore of the opinion that Articles 43 EC and 48 EC must be interpreted as not precluding legislation of a Member State w hich makes the establishment and operation of a health institution, in the form of an independent outpatient dental clinic, subject to obtaining prior administrative authorisation based on an assessment of the health needs of the population.

125. Nevertheless, I consider that, in the context of legislation such as that at issue in the main proceedings, it is for the national court to assess whether that legislation is suitable to achieve the objectives which it pursues, in that the establishment of a group dental practice in the Republic of Austria is authorised without it being necessary to carry out an assessment of the health needs of the population.

C – The second question referred

126. By its second question, the Verwaltungsgerichtshof asks the Court whether the fact that, in their assessment of the health needs of the population, the competent national authorities take into account the care offered by the outpatient departments of the public or private non-profit-making health institutions or other health institutions contracted to the sickness funds affects the answer which I propose to give to the first question referred.

127. It is apparent from the decision for reference that the relevant legislation for the purposes of review of the second contested decision is different, since, after the entry into force of the KAKuG, the assessment of the needs must also take into consideration the care offered by the outpatient departments of those institutions.

128. I take the view that the amendment of the legislation does not affect my proposed answer to the first question referred.

129. In the same way as outpatient clinics, public or private non-profit-making health institutions, including, in particular, hospitals, may have an outpatient department. To that end, they have technical equipment, whose cost is particularly high and which must be written off. As I have shown, there is an increasing number of alternatives to hospitalisation. An increasing number of patients, whose hospitalisation for medical reasons is not or no longer necessary, are treated in hospital outpatient departments, with the aim of transferring the care of certain groups of patients from ‘in-house’ care to ‘external’ care, (55) without having to do without the medical care offered by the relevant specialist departments of those institutions.

130. As the Republic of Austria has pointed out, nowadays those outpatient departments form an integral part of the organisation of the national health system. The competent national authorities can therefore legitimately take them into account in the context of the existing provision of care if they wish effectively to organise and plan the supply of health services in such a way as to maintain the financial balance of the social security system and to ensure medical care for the population in the form of a balanced, high-quality medical service open to all.

131. Moreover, with regard to the suitability of the legislation at issue to achieve the objectives which it pursues, the problem which I have highlighted in my examination of the first question referred arises in the same terms, since a group practice is liable to provide outpatient care.

132. Consequently, I consider that the fact that the competent national authorities take account, in their assessment of the health needs of the population, of the care offered by the outpatient departments of the public or private non-profit-making health institutions or other health institutions contracted to the sickness funds does not affect my proposed answer to the first question referred.

V – Conclusion

133. In the light of the foregoing considerations, I propose that the Court reply as follows to the questions submitted for a preliminary ruling by the Verwaltungsgerichtshof:

Articles 43 EC and 48 EC must be interpreted as not precluding legislation of a Member State which makes the establishment and operation of a health institution, in the form of an independent outpatient dental clinic, subject to obtaining prior administrative authorisation based on an assessment of the health needs of the population.

In the context of legislation such as that at issue in the main proceedings, it is nevertheless for the national court to assess whether that legislation is suitable to achieve the objectives which it pursues, in that the establishment of a group dental practice in the Republic of Austria is authorised without it being necessary to carry out an assessment of the health needs of the population.

(1) .

(2)  – ‘Hartlauer’.

(3)  – Council directive of 25 July 1978 concerning the mutual recognition of diplomas, certificates and other evidence of the formal qualifications of practitioners of dentistry, including measures to facilitate the effective exercise of the right of establishment and freedom to provide services (OJ 1978 L 233, p. 1).

(4)  – Council directive of 25 July 1978 concerning the coordination of provisions laid down by law, regulation or administrative action in respect of the activities of dental practitioners (OJ 1978 L 233, p. 10). That directive, together with Directive 78/686, was repealed and replaced by Directive 2005/36/EC of the European Parliament and of the Council of 7 September 2005 on the recognition of professional qualifications (OJ 2005 L 255, p. 22).

(5)  – Case 2/74 [1974] ECR 631.

(6)  – Thus, the first recital in the preamble to Council Directive 75/362/EEC of 16 June 1975 concerning the mutual recognition of diplomas, certificates and other evidence of formal qualifications in medicine, including measures to facilitate the effective exercise of the right of establishment and freedom to provide services (OJ 1975 L 167, p. 1), states that, pursuant to the Treaty, all discriminatory treatment based on nationality with regard to establishment and provision of services is prohibited as from the end of the transitional period.

(7)  – See, inter alia, with regard to the activities of doctors, Directive 75/362 and Council Directive 75/363/EEC of 16 June 1975 concerning the coordination of provisions laid down by law, regulation or administrative action in respect of activities of doctors (OJ 1975 L 167, p. 14). The directives adopted in respect of those fields were repealed and replaced by Directive 2005/36.

(8)  – BGBl. I, 5/2001; ‘the KAG’.

(9)  – BGBl. I, 122/2006; ‘the KAKuG’.

(10)  – In the present Opinion, the amendments made by the KAKuG to the provisions of the KAG are shown in italics.

(11)  – Outpatient treatment is treatment which does not require hospitalisation and permits the patient’s admission and discharge on the same day without any increased risk.

(12)  – Paragraph 2.1.

(13)  – LGBl. 23/1987. Law as amended in 2001 (LGBl. 48/2001; ‘the Wr. KAG’).

(14)  – Paragraph 2.2.

(15)  – LGBl. 132/1997. Law as amended in 2005 (LGBl. 99/2005; ‘the Oö. KAG’).

(16)  – BGBl. I, 169/1998. Law as amended in 2006 (BGBl. I, 122/2006). The provisions which interest us in the context of the present disputes have not undergone substantial amendment. I will indicate them.

(17)  – BGBl. I, 126/2005. Law as amended in 2006 (BGBl. I, 80/2006).

(18)  – The rules for the establishment and management of a partnership are laid down in Paragraph 105 of the Companies Code (Unternehmensgesetzbuch (BGBl. 219/1997), as amended in 2006 (BGBl. I, 103/2006)).

(19)  – As Advocate General Ruiz‑Jarabo Colomer observed in point 46 of his Opinion in Case C‑157/99 Smits and Peerbooms [2001] ECR I‑5473, there are, within the European Union, three types of scheme, that is to say, wholly public schemes under which the financing is wholly public and care is provided free of charge, private insurance systems under which care is paid for directly by the patient who is then reimbursed by his sickness insurance fund and, finally, hybrid systems such as that at issue in the main proceedings.

(20)  – BGBl. 189/1955. Law as amended in 2006 (BGBl. I, 133/2006; ‘the ASVG’).

(21)  – Paragraph 131(1) of the ASVG.

(22)  – Case C‑444/05 Stamatelaki [2007] ECR I‑3185, paragraph 23 and the case-law cited. That case-law also applies in matters of direct taxation (Case C‑196/04 Cadbury Schweppes and Cadbury Schweppes Overseas [2006] ECR I‑7995, paragraph 40); in criminal matters (Case 186/87 Cowan [1989] ECR 195, paragraph 19); and in matters of public security (Case C‑285/98 Kreil [2000] ECR I‑69, paragraphs 15 and 16).

(23)  – See, inter alia, my Opinion in Case C‑141/07 Commission v Germany , pending before the Court, with regard to the scheme for the supply of medicinal products to hospitals.

(24)  – C‑158/96 [1998] ECR I‑1931.

(25)  – C‑385/99 [2003] ECR I‑4509.

(26)  – C‑372/04 [2006] ECR I‑4325.

(27)  – See, inter alia, with regard to the profession of pharmacist, Case C‑221/05 Sam McCauley Chemists (Blackpool) and Sadja [2006] ECR I‑6869 and Case C‑39/07 Commission v Spain [2008] ECR I‑0000; with regard to the profession of dental practitioner, Case C‑437/03 Commission v Austria [2005] ECR I‑9373; and, with regard to the medical profession, Case C‑232/99 Commission v Spain [2002] ECR I‑4235.

(28)  – These are ‘private non-profit-making institutions’.

(29)  – See, to that effect, Joined Cases C‑1/90 and C‑176/90 Aragonesa de Publicidad Exterior and Publivía [1991] ECR I‑4151, paragraph 16, and Case C‑322/01 Deutscher Apothekerverband [2003] ECR I‑14887, paragraph 103 and the case-law cited. It is in the context of justification for legislation that the Court takes the Member States’ discretion into consideration (see, inter alia, with regard to restrictions on the freedom of establishment and the freedom to provide services, Joined Cases C‑338/04, C‑359/04 and C‑360/04 Placanica and Others [2007] ECR I‑1891, paragraph 48).

(30)  – See, inter alia, Watts , paragraph 92 and the case-law cited.

(31)  – See, to that effect, Case C‑260/89 ERT [1991] ECR I‑2925, paragraph 12.

(32)  – See Case C‑442/02 CaixaBank France [2004] ECR I‑8961, paragraph 11 and the case-law cited; Case C‑299/02 Commission v Netherlands [2004] ECR I‑9761, paragraph 15; Case C‑140/03 Commission v Greece [2005] ECR I‑3177, paragraph 27; and Case C‑500/06 Corporación Dermoestética [2008] ECR I-0000, paragraph 32 and the case-law cited.

(33)  – Order for reference, paragraph 1.1.

(34)  – See Case C‑255/04 Commission v France [2006] ECR I‑5251, paragraph 29.

(35)  – As the Republic of Austria points out in paragraphs 26 and 27 of its observations, Paragraph 3 of the KAKuG makes no distinction according to whether the service provider is an Austrian national or a national of another Member State.

(36)  – Paragraph 38 of its observations.

(37)  – Furthermore, and purely on an indicative basis, I would like to point out that a measure which makes the granting of authorisation subject to proof of the existence of an economic need or market demand was recently given a strict framework by Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36). Although that directive is not applicable to the provision of healthcare (see recital 22 in the preamble and Article 2(f)), I wish, nevertheless, to point out that, pursuant to Article 14(5) of the directive, Member States are not to make access to, or the exercise of, a service activity in their territory subject to compliance with the case-by-case application of an economic test. In accordance with recital 8 in the preamble to the directive, that type of measure constitutes a barrier to the freedom of establishment of service providers in the Member States.

(38)  – See, inter alia, Case C‑170/04 Rosengren and Others [2005] ECR I‑4071, paragraph 43, and Corporación Dermoestética , paragraph 35 and the case-law cited.

(39)  – Deutscher Apothekerverband , paragraph 103 and the case-law cited.

(40)  – See the case-law cited in point 48 of the present Opinion concerning the reimbursement scheme for cross-border healthcare. See, in particular, Stamatelaki , paragraphs 30 to 32 and the case-law cited.

(41)  – Smits and Peerbooms , paragraphs 76 to 80.

(42)  – See Corporación Dermoestética , paragraph 37.

(43)  – Orthodontics is part of dental medicine devoted to the prevention and correction of ill-positioned teeth and deformations of the jaw, in particular in children.

(44)  – In that regard, I wish to point out that, in its proposal for a directive of the European Parliament and of the Council of 2 July 2008 on the application of patients’ rights in cross-border healthcare, the Commission proposes a Community definition of the concept of ‘hospital care’. Under Article 8(1)(a) and (b) of that proposal, that concept covers not only ‘healthcare which requires overnight accommodation of the patient in question for at least one night’, but also healthcare that requires use of highly specialised and cost-intensive medical infrastructure or medical equipment or treatments presenting a particular risk for the patient or the population.

(45)  – See Watts , paragraph 115 and the case-law cited.

(46)  – Ibid., paragraph 116 and the case-law cited.

(47)  – Ibid., paragraph 117 and the case-law cited.

(48)  – See Paragraphs 4 of the Wr. KAG and 5 of the Oö. KAG respectively.

(49)  – Federal Official Journal of the Republic of Austria.

(50)  – Paragraphs 1.1 and 1.2.

(51)  – That is to say, Paragraph 4 of the Wr. KAG and Paragraphs 4 and 5 of the Oö. KAG respectively.

(52)  – See Smits and Peerbooms , paragraph 81; Müller‑Fauré and van Riet , paragraph 82; and Watts , paragraph 111.

(53)  – Under Paragraph 105 of the Companies Code, as amended.

(54)  – Oral observations submitted by the Republic of Austria at the hearing on 26 February 2008.

(55)  – Patients are cared for outside the hospital by a team of medical professionals under local care systems and in various locations (place of work, school, home).