Hospital Rating Report 2019: German hospitals are doing worse again

22.05.2019 11:50

The economic situation of German hospitals was worse in 2017 than in the previous year. 12 percent were in the “red zone” with an increased risk of insolvency. Their earnings situation has also deteriorated, probably also due to the number of inpatient cases falling for the first time. The associated pressure to act is likely to continue to increase in the next decade. It is time to strive for holistic reimbursement models instead of the existing outpatient and inpatient reimbursement systems. However, the path taken to cover costs is a wrong path. These and many other results come from the fifteenth edition of the “Hospital Rating Report”, which was presented to the public as part of the “Capital Congress 2019 – Medicine and Health” in Berlin. It was created jointly by RWI, the Institute for Healthcare Business GmbH (hcb) in cooperation with Deloitte and HIMSS.

The most important results:

Status quo
The economic situation of German hospitals worsened in 2017. 12 percent of the hospitals were in the “red zone” with an increased risk of insolvency, 81 percent were in the “green zone”. The year before, 7 percent were in the “red zone” and 84 percent were in the “green zone”. The earnings situation also deteriorated in 2017: 28 percent of hospitals posted an annual loss at group level, compared to only 13 percent in 2016.  
The decisive factor for the worse economic situation was probably the decline in the number of inpatient cases by 0.5 percent in 2017. The reasons for this are, among other things, increasing outpatient care, the shortage of personnel, an already high level of saturation in cardiological and orthopedic services, among other things, and more intensive MDK examinations.
Large hospitals typically have a better rating than small ones, and a high degree of specialization also has a positive influence on the rating. Non-profit and private clinics perform better than public clinics.
The hospital structures are still unfavorable in many regions, particularly due to high location density, many small units and low specialization. The rating is worst in Lower Saxony/Bremen, Bavaria, Hesse and Baden-Württemberg, and significantly better in East Germany.

Investments
The structural funds essentially achieve their goals, but the resources of the structural funds are not sufficient to achieve an optimal hospital structure in Germany.
In this respect, its increase and continuation make sense. However, it has room for improvement. In terms of regulatory policy, it would be correct to use tax resources instead of resources from the health fund. In addition, competitive elements could achieve a more efficient distribution of the scarce fund resources.

staff
If the status quo continues, demand for skilled workers in health and social services is expected to reach 4.9 million full-time employees by 2030. This would mean a job offer of 3.6 million full-time employees.
In order to close this discrepancy, the demand for health services should be curbed and the high part-time quota in health and social services as well as the increasing number of early retirements in the economy as a whole should be reduced.
In addition, the nursing profession must become more attractive. To achieve this, the nursing profession must be given more responsibility and nurses must be equipped with expanded skills. In the long term, modern technology such as robotic assistance and artificial intelligence should also relieve the burden on healthcare workers.
In addition, the shortage of skilled workers could be reduced through qualified immigration. Asia, South America and, in some cases, Eastern Europe have particularly great migration potential. It's not just about Germany recognizing foreign nursing professionals, but also about them recognizing the job profile in Germany.

projection
The outpatientization of medicine is likely to accelerate. No major growth in the number of inpatient cases is expected in the short and medium term. In the long term, it is likely to continue to increase due to demographic developments, by around 5 percent by 2025.

If the status quo continues, the basic wage rate remains high and wages grow as in the past, the proportion of hospitals in the red rating area would increase moderately to 18 percent by 2025. If, on the other hand, one assumes a significantly lower growth in the number of cases in the future, a falling basic wage rate and sharply rising wages, 40 percent of hospitals would be in the red rating area by 2025. In this scenario, if optimization of hospital structures, improvements in hospital productivity - especially as a result of greater digitalization - and the outpatientization of medicine were promoted, only 21 percent of hospitals could be in the red rating area by 2025.

compensation
One of the central reform areas is changing the reimbursement systems in the healthcare system. The path now taken to covering costs is a wrong path. Rather, the goal must be to achieve long-overdue cross-sector care and greater outpatient medicine. For this purpose, morbidity-oriented regional budgets could be set for defined regions in so-called capitation models, which at least cover outpatient and inpatient acute care. The region's service providers then decide independently how to use the regional budget. The population can visit service providers from other regions if they are dissatisfied with local care.

It is also important to expand entrepreneurial freedom of action and strengthen openness to innovation in the healthcare system. Instead of increasing regulation, for example, responsibility for health care could be transferred to local actors through capitation models. Hospitals would thus develop into healthcare companies that assume overall responsibility for the health of the population in their regions.

“We need new cross-sector compensation models,” says RWI health expert Boris Augurzky. “In addition, the existing gap in investment financing for hospitals must be closed, ideally with investments in sustainable hospital structures,” said Augurzky. “Without digitalization and immigration, the need for skilled workers in the German healthcare system cannot be met,” adds Sebastian Krolop (HIMSS, Healthcare Information and Management Systems Society).

The data basis for the “Hospital Rating Report 2019” are 466 annual financial statements of hospitals from 2016 and 84 from 2017. They include a total of 877 hospitals with a market share of 70% measured in terms of sales.