Hospitals: why the clinics are facing a wave of bankruptcies – politics

How do you put into words a situation that is getting worse and worse? The German Hospital Society (DKG) launched a campaign in autumn to draw attention to the plight of the clinics. It was called “Red Alert”. There were complaints about the exploding energy costs, which pushed many houses to the brink of ruin. The echo was limited. Health Minister Karl Lauterbach announced that the federal government would step in when it came to spending on electricity and gas. At the same time, he hinted that overall hospital spending would not increase due to the tight budgetary situation. In this respect, it is logical that the hospital company is now reporting that a wave of bankruptcies is rolling in among the clinics.

The prognosis is based on a study by the German Hospital Institute, which is also supported by the DKG. Its hospital barometer, an annual survey, showed for 2022 that only six percent of the clinics in Germany rate their current economic situation as good. Only every fifth clinic expects to be in the black for the current year, more than half assume that the operating result will continue to deteriorate in the coming year. In particular, the large hospitals with more than 600 beds rate their situation as negative. The numbers clearly showed “that we have reached a low,” summarizes a spokesman for the hospital association.

In the DKG’s view, federal compensation payments for higher energy costs are far from enough to end the misery. The clinics still have to cope with many other expenses that would have increased due to inflation, by an average of about ten percent. The prices for the treatments, on the other hand, which you can settle with the health insurance companies, have only increased by two percent. According to the DKG, this deficit “leads to economic upheavals that are increasingly bringing hospitals close to bankruptcy”.

The structural deficit of the hospitals will add up to 15 billion euros in 2023, predicts Gerald Gass, chairman of the German Hospital Association.

(Photo: Marcus Brandt/DPA)

They hit the clinics in a situation in which – after three years of the pandemic – they have lost a lot of substance. Health Minister Lauterbach has announced that he will reform the financing of hospitals. But the clinics still have to calculate on the basis of flat rates per case, and that means: The more interventions they perform, the better they are rewarded.

During the pandemic, however, hospitals were able to treat significantly fewer patients because politicians repeatedly instructed them to provide beds for the admission of corona patients. The federal government also paid compensation for this. However, industry insiders argue that these payments were not enough to cover all costs. Hospitals in particular with many corona cases would have been left behind because the treatment of these patients was just as costly as it was labor-intensive.

There are fewer and fewer clinics

How many houses are acutely threatened? For 2023, the DKG expects that ten to 20 percent could be at risk of insolvency. The number of clinics has been shrinking for years anyway, according to the Federal Statistical Office, 1,791 general hospitals were in operation across Germany in 2007, and only 1,558 in 2020.

In the past, municipalities and the federal states have repeatedly saved houses from sinking. But their scope for action has also decreased, inflation and the pandemic have torn deep holes in their budgets. In addition, the hospital company suspects that a market shakeout in the clinics could be politically desired: the number of hospitals is high in international comparison, a few bankruptcies would have the pleasant effect that the federal and state governments could provide the other facilities with more money and staff .

The DKG chairman Gerald Gass has repeatedly criticized this “cold structural change”. Anyone who simply lets the process run like this endangers the supply in many regions of Germany. Especially the small clinics in the countryside have a hard time covering their costs in the world of flat rates per case. However, they are often the last point of contact for the population. The outpatient structures that Lauterbach plans to replace inpatient treatment in the clinics no longer exist in many places.

The structural deficit of the hospitals will add up to 15 billion euros in 2023, predicts DKG boss Gass. The federal government must step in here. Otherwise, all of Lauterbach’s promises to take the economic pressure out of the system and to give medicine priority over the economy again are invalid. There still seems to be a glimmer of hope at the DKG that things will turn out differently: Their current statement only says that politicians have “almost missed” the time when the wave of bankruptcies in the clinics can be stopped.

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