The economic situation of German hospitals deteriorated in 2017. More than every fourth hospital (28%) recorded a loss on its balance sheet - and around 12% of hospitals are now at risk of insolvency. This is 5% more than in the previous year.

These figures emerge from the current Hospital Rating Report 2019, which was presented at the latest Capital City Congress of Medicine & Health from 21 to 23 May 2019 in Berlin. The annual report is produced jointly by the RWI Leibniz Institute for Economic Research and the Institute for Health Care Business in collaboration with Deloitte and HIMSS, owner of Healthcare IT News.

For the analysis, around 550 annual financial statements of almost 900 German hospitals from 2016 and 2017 were obtained and evaluated. Their turnover accounts for around 70% of the total turnover in the German hospital market.

12% OF GERMAN HOSPITALS ARE AT RISK OF INSOLVENCY

The statistics presented at the session "Krankenhaus Rating Report 2019 - Das Ende des Wachstums?" in Berlin also showed that the number of inpatient cases has fallen by 0.5% with simultaneous outpatient treatment, i.e. fewer inpatient admissions, but all the more outpatient treatment in the German hospital landscape. This could be a possible reason for the lack of profits, the authors of the report speculated at the Capital Congress. But factors such as the shortage of skilled workers also played a decisive role.

GERMAN HOSPITAL STRUCTURE NEEDS MODERNISATION

Boris Augurzky of the RWI Leibniz Institute for Economic Research called for new cross-sector reimbursement models. "We need new models," he said. The RWI health expert explained that the gap in investment financing had to be closed.

Sebastian Krolop, one of the authors of the study and Global Chief Operating and Strategy Officer at HIMSS, also agreed. "Without a patient-centered and result-oriented reimbursement model that takes innovations and investments into account, the established health care providers will not change and will end up being overrun by digital health platform providers," he warned.

"The structural fund was a good first approach, but the path we are now taking towards self-cost recovery unfortunately has the opposite effect,” Krolop added. Instead of self-cost recovery, the speakers advocated so-called region-related capitation models as remuneration models.

DIGITISATION AND IMMIGRATION TO COMBAT SKILLS SHORTAGES

In view of the need for skilled workers, Krolop highlighted digitisation with modern technologies such as AI and robotics, as well as immigration, as possible solutions to relieve the burden.

The authors also suggested a redistribution of funds from the hospital structure fund in order to improve care structures: the fund provides hospitals throughout Germany with an annual volume of €500m from the health fund and promotes investment measures.

THE TREND

This makes one thing clear: the business model of many small, less specialised hospitals must change. Obsolete structures require transformation and investments towards digitalisation must be tackled. "The specialists need virtual support and relief for administration and exchange in order to have more time for patients," emphasised Krolop.

In an international comparison, German hospitals are currently in the last third in terms of key figures such as length of stay, location density and degree of digitisation. However, if it were possible to sustainably optimise hospital structures through restructuring and investments in digital technology and increase the productivity of the hospitals, it would be conceivable to contain the poor economic situation in the German hospital landscape to 21% in the red rating segment by 2025 despite increasing outpatient treatment.

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Anna Engberg is a Wiesbaden-based freelance journalist specialising in health and technology. Healthcare IT News is a HIMSS Media publication.