Berlin Report: German Hospitals Struggling Amidst Financial Strain
Medical Facilities Facing Financial Hardships
German hospitals are battling their worst financial crisis in two decades, according to a recent survey. A staggering 61% reported losses in 2023, while only 9% managed to balance their books and a mere 30% saw a profit.
This grim reality unfolds in a report published in Berlin, commissioned by the German Hospital Association (DKG), among others. These figures represent the worst outcomes since the turn of the century, with the annual hospital performance deteriorating for a whopping 64% of the surveyed institutions.
The gloomy outlook for 2024 is even more disheartening, with 79% of hospitals anticipating a negative balance, 11% expecting a stable year, and merely 10% forecasting a profit.
The primary culprits behind this financial turmoil appear to be escalating personnel and material costs. The head of the German Hospital Association, Gerald Gaß, voiced concerns about the lack of investment promotion and pointed out that hospitals, like other sectors, are dealing with soaring inflation rates. "They are not awarded the flexibility to adjust prices according to inflation, but they must bear the same increased expenses," he lamented.
The German Social Association expressed concern over the numbers, while praising the recently enacted hospital reform as a step in the right direction. However, they emphasized that more action is needed.
The "Hospital Barometer" was prepared by the German Hospital Institute, with the support of the DKG, among others. The survey was conducted among general hospitals with at least 100 beds and involved 366 participating hospitals.
Behind the surface of these financial woes are deeper issues, such as underfunded infrastructure modernization, rising operational costs, and regulatory challenges. The failed promises of digitalization, unsustainable energy obligations, and underfunded mandates are bearing down on our healthcare institutions.
Infrastructure modernization demands, like digitizing patient portals and improving emergency capacities, are met with steep costs that are just a fraction of the €3 billion Hospital Future Act (KHZG) allocation. Green initiatives are appealing due to their long-term savings potential, but the upfront funding required often exceeds state allocations.
Hospitals are also burdened by new IT security requirements and the complexities of healthcare supply chain management, which are driving rapids growth in the healthcare supply chain management market. Moreover, immigration and refugee-related healthcare costs are putting additional strain on hospitals, echoing pressures seen in neighboring regions.
While KHZG addresses critical digitization requirements, its success hinges on bridging the annual €7 billion investment gap and incorporating green technologies to cut energy costs for large hospitals, which could potentially save up to 30%. Ultimately, federal incentives for states that invest in full sustainability projects, and market-driven solutions for supply chain optimization, may hold the key to our hospitals' future survival.
- Despite the grim financial situation of German hospitals, the German Social Association has praised the hospital reform as a step in the right direction, but emphasized that more action is needed in 2023 to address the ongoing financial crisis.
- Infrastructure modernization, such as digitizing patient portals and improving emergency capacities, is a key issue for hospitals, but the costs are steep and only a fraction of the €3 billion allocation from the Hospital Future Act (KHZG).
- Hospitals are facing increased costs in IT security requirements and the complexities of healthcare supply chain management, which are driving rapid growth in the healthcare supply chain management market.
- The failure to modernize infrastructure, soaring operational costs, and challenges in healthcare supply chain management are exacerbating the financial struggles of hospitals in 2023 and beyond, putting additional strain on health-and-wellness services.
