FAQ
Status: 11/17/2021 2:32 p.m.
Overburdened in the pandemic and underfunded for years: the situation of the hospitals is difficult. You are demanding a rescue package beyond the end of the year. How is the clinic financing currently working?
How are hospitals financed?
Financing is a very complicated matter. Roughly speaking, the clinics receive tax revenues, money from the health insurance companies and – very little – private payments. It is regulated by law that the investment costs such as new buildings or new equipment are financed by the federal states. The operating costs, which include the salaries of the employees, are paid for by the health insurance companies. In very rare cases, patients go to hospital for treatment in private and then pay accordingly themselves.
What treatments do hospitals get?
The health insurance companies calculate with the hospitals on the one hand so-called Diagnosis Related Groups, DRG for short – in German: flat rates per case. On the other hand, the health insurances reimburse the personnel costs that arise for the care of the patients.
The flat rate per case includes medical services, material costs such as medication, bandages or artificial joints, expenses for infrastructure and administration. They are calculated annually by the institute for the hospital remuneration system based on the average costs of model clinics and then set at a flat rate for everyone. The care costs, however, negotiate between the health insurances and the clinics individually, depending on the actual expenses of the individual houses.
Flat-rate per case and care costs are not limited in amount or amount, the health insurers pay the amount that is incurred at the hospitals. For the clinics, this means that those who provide more services earn more money. The health insurance companies pay more and more for inpatient care every year. In 2008 it was 52 billion euros, but that figure rose to 81 billion euros in 2020.
Why are costs rising so rapidly?
There are many reasons for that. It certainly plays a role that Germany is an aging society. Older people are more likely to be ill or need medical help, so more patients come to the hospital. The general inflation rate, technical and medical advances and rising personnel costs also have an impact. The health economist Reinhard Busse from the Technical University of Berlin sees the main reason in the fact that too many hospital beds are kept in this country: “The clinics are paid when they occupy these beds. And then they do it too.”
In addition, say many experts, the remuneration system creates incentives for the clinics through flat-rate case fees to settle as many cases as possible. Everything will be reimbursed. And there are diagnoses that are particularly worthwhile. According to data from the Federal Statistical Office, the number of knee surgery operations has increased by around half within twelve years, and the number of hip operations by around a quarter. According to the criticism, clinics that specialize in certain interventions made profit. Houses that provide basic services that are less economically viable would run into deficits.
The health insurances deny that basic care is not worthwhile: case-based flat rates represent the average costs of all hospitals in Germany and the care costs incurred are paid, they say.
Why do many clinics complain about underfunding?
The clinics lack the funds for which the federal states should actually pay. You are responsible for the investment costs, i.e. for construction work or the purchase of expensive equipment. The Federal Court of Auditors complains that the federal states have “not adequately met their investment obligations in hospital financing for years”. Funding is stagnating “at a consistently low level”. The countries are also positioned differently. Bavaria, for example, is one of the frontrunners with a funding rate of around 60 percent. 100 percent is legally anchored.
In 1993, the federal states paid 3.9 billion euros, in 2019 only around 3.2 billion euros – despite inflation and general cost increases. The federal states’ investment quota fell from 25 percent in 1972 to around three percent in 2019.
The German Hospital Association is sounding the alarm: “The chronic underfunding that has persisted for decades, especially due to the lack of sufficient investment cost financing by the federal states, threatens to jeopardize the hitherto good hospital care,” said its President Gerald Gass.
Where could still be saved?
There are currently around 2000 hospitals in Germany. A broad alliance of health economics, health insurance companies, medicine and politics sees enormous savings potential here. Many clinics are not even equipped to provide high quality care. Patients would be better off in treatment centers. Smaller, less well-positioned hospitals would then be superfluous. They could be closed. There is then no threat of undersupply, says health economist Reinhard Busse: “We currently have inadequate quality in many places and at the same time blatantly oversupply in terms of the number of houses: On average, only 64 percent of the beds are occupied, almost two out of five beds are pending an average day empty. “
Hospital-free regions are not to be feared in sparsely populated areas such as in Mecklenburg-Western Pomerania or on islands, for example. There are already so-called security surcharges that help finance houses with a basic supply.
The German Hospital Society is not closing itself to the discussion either, but sees politicians as having an obligation. “People expect answers: How much hospital do politicians want in the future, how much centralization, how close to home? These are difficult questions that politicians have to face,” said President Gaß.
What influence does Corona have on hospital financing?
In the past year, the federal government reimbursed the clinics for loss of income because they kept beds free for corona patients and postponed other treatments. In addition, many people had voluntarily decided not to go to hospital, which was not urgently required. Ten billion euros therefore flowed to the hospitals. This year there was such a reimbursement, so far about five billion euros.
The German Hospital Society is now calling for such a commitment from the federal government for the coming year as well. “As long as the hospitals cannot be sure that their economic survival is secured in the regular system even with falling case numbers, they have to withstand the difficult balance between Covid supply and plannable services. We therefore need an effective rescue package for all hospitals beyond the end of the year “, explained Gass at the German Hospital Congress.
The health insurances see this critically. They fear that the clinics could collect money twice. In 2020 and 2021 costs were claimed for beds that existed in 2019. But many of them would not have been used in normal operation at the moment because there was a lack of staff. In addition, many treatments were financed: 2020 with over one billion euros more than in 2019 – despite Corona and the problems mentioned. Instead, the health insurers suggest reimbursing the clinics only for losses actually incurred or any additional costs.