State action is constitutionally urgently required
25.05.2023 13:02
Waiting for a cold structural adjustment violates the professional freedom and entrepreneurial freedom of non-profit, church and private hospital providers. State action is constitutionally urgently required to prevent a wave of hospital insolvencies. This is the result of a report on the constitutionality of hospital remuneration regulation by Professor Huster, from the Ruhr University Bochum on behalf of the German Hospital Association (DKG).
According to the report, the explosive economic situation of hospitals and the high risk of insolvency are proven. The reasons for the risk of insolvency are the difficulties in precisely calculating per-case flat rates (DRG) due to fluctuations in the number of cases, some of which are caused by the pandemic, coupled with crisis-related cost increases with no possibility of compensation through, for example, price increases. In addition, there would be insufficient investment financing. The expert states that professional freedom ensures participation in competition, but not economic success. Hospital operators are of course required to undertake economic planning with foresight, which also creates a certain level of economic resilience.
30 percent of locations are at risk of insolvency
However, the report also confirms that the existing legal system for hospital financing is not able to respond adequately to the current crises and the resulting short-term and rapid price increases due to the lack of appropriate financing instruments. If the hospital financing system no longer guarantees the economic existence of hospitals, then the minimum financing limit will be fallen below. What is crucial is that the hospital operators in our system do not have the entrepreneurial scope to adjust their prices for patient treatment to the increased costs due to inflation. It is therefore imperative that the state acts to prevent bankruptcies and gaps in supply. “The highly explosive and tense economic situation of hospitals and the associated high risk of insolvency is widely recognized. Even the Federal Minister of Health publicly describes the economic plight of hospitals and puts the proportion of locations at risk of insolvency at 30 percent. “Based on this, the report examines the constitutional necessity of legislative action based on one of the central principles of the Hospital Financing Act – the economic security of hospitals,” said the Chairman of the Board of the German Hospital Association (DKG), Dr. Gerald Gass.
Prevent cold structural change
It is also important for the expert that the welfare state principle in accordance with Articles 20 Paragraph 1 and 28 Paragraph 1 of the Basic Law also creates a constitutional requirement to prevent cold structural change. The welfare state principle requires ensuring equal access for all people in this country and a minimum subsistence level of hospital care. A cold structural change could lead to this access being jeopardized by a large number of bankruptcies in a regional area.
“If inflation-related costs are not fully financed, hospitals will be massively restricted in their entrepreneurial activities and exposed to disorderly, cold structural change. This not only violates the constitutionally required entrepreneurial freedom of hospitals, but also massively endangers the security of patient care,” warns Gaß.