Frankfurt The economic situation of German hospitals is worse than it has been for a long time: Around 70 percent of the hospitals expect a loss this year, 96 percent expect things to get worse in the next five years. This is shown by a survey by management consultants Roland Berger among executives of the 600 largest hospitals in Germany, which was previously available to the Handelsblatt.
There has not been such a negative assessment of the situation since the start of the survey series in 2014. In 2021, 62 percent of the clinics had expected a deficit.
“Many hospitals have based their planning for this year on that of the pre-pandemic year 2019 and hoped to get the number of inpatient cases back to the level before the corona crisis. It is now becoming apparent that the patients are not returning to the extent expected. That depresses sales,” says Peter Magunia, Partner at Roland Berger.
There are also other factors that add up to a “toxic mixture”, as the study authors write: on the revenue side, expiring Covid 19 compensation payments and a growing shortage of nursing staff are having a negative impact. At the same time, inflation and energy price increases are driving up costs, according to Magunia: “The situation in the German hospital industry is more dramatic than it has been for a long time.”
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The situation in the houses under public law is particularly difficult. The study shows that 90 percent of the hospitals expect a loss there, after 73 percent in the previous year. In the case of the non-profit hospitals, 53 percent of those surveyed expect a deficit, in the case of privately owned hospitals the figure is 20 percent. If the loss-making houses are not supported by their sponsors, there is a risk of closures.
The health minister faces an enormous task in hospital reform.
(Photo: Reuters)
According to the clinic managers surveyed, the federal government’s compensation payments, which were intended to compensate for the loss of sales and cost increases caused by the pandemic, were only able to partially compensate for the losses last year. A total of seven out of ten respondents do not expect sufficient relief for the current year.
Increases in energy prices put a heavy strain on hospitals
After two years of additional workload in the pandemic, nursing staff are also no longer available to the same extent as before. Many employees have reduced their working hours or changed jobs entirely. Since the number of patients who can be treated as inpatients is tied to minimum staffing levels, hospitals are no longer allowed to accept some patients.
>> Read here: Clinics receive money, project implementation remains difficult
In addition, there are sharply increased costs. According to the German Hospital Society, hospitals are expecting energy price increases of almost 60 percent this year alone, and the costs for medical consumables have climbed by more than 20 percent. Due to the difficult situation in the industry, the German Hospital Society has repeatedly requested immediate financial aid for the clinics.
Because in the capped revenue system with fixed budgets, the clinics cannot pass these price increases directly on to their customers. The Roland Berger survey shows that liquidity is also declining sharply: 62 percent of the hospital managers surveyed expect a decline this year. In 2021 it was still 49 percent.
Structural change in the industry was missed
Beyond the current problems, the industry is increasingly feeling the consequences of missed structural changes. The German hospital market, with around 1,900 clinics and a turnover of more than 114 billion euros, is overcrowded in many metropolitan areas, while there is a lack of supply in rural areas.
The flat-rate system introduced two decades ago has favored inpatient treatment. Since the pandemic, however, many people want to be treated on an outpatient basis if possible. In addition, the high level of bureaucracy and sluggish digitization impair the efficiency of care.
The houses are not helped by state financial injections alone. The industry is waiting for a fundamental hospital reform, which Federal Minister of Health Karl Lauterbach (SPD) has declared as a priority. So-called hybrid DRGs are planned to promote the outpatient treatment of previously unnecessarily inpatient services. These are flat rates per case, which in principle pay for comparable services in practice and hospital at the same price. Hospitals need to adapt to this.
Many hospitals are struggling with staff shortages.
(Photo: dpa)
“It is crucial that the hospitals better tailor their range of services to the demand in their catchment area, especially with regard to the question of which services can be offered on an outpatient basis,” says Janes Grotelüschen, Partner at Roland Berger. “There is no alternative to outpatient treatment, so that the system becomes more efficient.”
>> Read here: Lauterbach continues to come under pressure from expert opinions on hospital reforms
In addition, local hospitals could cooperate more closely and also form alliances. “Not only to achieve economies of scale, for example in purchasing, but also to eliminate duplicate structures and create complementary offers,” Grotelüschen continues.
Hospitals: Digitization must not lose momentum
The hospitals urgently need planning security, “in many ways,” Magunia demands. How will inflation compensation take place? Are new Covid compensation payments coming and when will the new hybrid flat-rate payments be? “The government needs to quickly set the framework for its hospital reform so that hospitals know in which direction they should approach their structural change,” says Magunia.
Despite many pressing issues, it is important that the topic of digitization does not lose momentum. The Hospital Future Act was initiated under Health Minister Jens Spahn (CDU), under which digitization projects are to be financed with up to 4.3 billion euros. “Many initiatives have been triggered by the Hospital Future Act, but the industry also needs a perspective on how things should continue here,” says Grotelüschen.
More: Clinics in the energy price crisis: “Cannot force patients to put on a sweater.”