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Berlin The authors of the Hospital Rating Report assume that the hospital reform currently planned by the federal and state governments will significantly change the hospital structure in Germany.
With the resources of the transformation fund, the hospital landscape could be restructured in such a way that the number of locations decreases by 184, or eleven percent, according to the report, which was presented today in Berlin at the Capital Congress.
The number of beds would decrease by 25 percent. The authors assume that this target could be achieved in the course of the 2030s.
The Hospital Rating Report is prepared by the RWI Leibniz Institute for Economic Research and the Institute for Healthcare Business GmbH (hcb) in cooperation with the Bank im Bistum Essen (BIB). It is based on the analysis of 488 hospital annual financial statements from 2021 and 489 financial statements from 2022.
Much fewer primary care providers with emergency rooms
For their forecast, the authors of the report divided the country’s hospitals into different levels of care, which the Government Hospital Commission had proposed at the end of 2022.
The number of Level 3 hospitals providing comprehensive care could increase by 14 percent from 164 to 187 hospitals as a result of hospital reform. The number of Level 2 hospitals providing extended care could increase by 33 percent from 261 to 348.
The number of Level 1n clinics, which offer basic care with emergency room, would fall from 648 to 350. Instead, 348 Level 1i clinics, which are intended to provide cross-sectoral care, would be newly established. Most of the specialist clinics are to be retained.
However, following talks between the federal and state governments, the level classification was not included in the draft of the Hospital Care Improvement Act (KHVVG). The KHVVG was discussed in the first reading in the Bundestag today.
Construction of central clinics
In many regions there is potential to merge several small clinics into a new, larger clinic and to choose a location that is easily accessible for the population, according to the Hospital Rating Report. The transformation fund from the KHVVG is intended to provide investment funds specifically for the construction of such central clinics. In many cases, old locations could continue to be used for health care.
The authors of the report assume that around 40 billion euros will be needed to finance the new buildings and extensions as part of the centralization, especially Level 2 clinics. The costs for converting old sites to Level 1i clinics could amount to seven billion euros and the costs for closing sites that are no longer needed could amount to almost two billion euros, the report says.
The transformation fund would thus be almost completely exhausted. The KHVVG provides a sum of 50 billion euros for the fund, which according to current plans is to be raised half by the statutory health insurance and half by the federal states.
Restructuring improves profitability
However, once the hospital landscape has been restructured, hospital revenues could increase. Since the restructuring would result in larger clinics, this could also improve profitability, write the authors of the report. Accordingly, the aggregate annual result of all hospitals in the target scenario could be more than one billion euros higher than in the status quo.
With new structures and reduced capacities, the annual investment requirement to maintain the substance could also be smaller, depending on the assumptions, by 355 to 670 million annually. In addition, investments in existing buildings could initially be dispensed with as part of the centralization, which would also have a positive impact.
Elimination of aid payments
Every year, the Hospital Rating Report presents the economic situation of hospitals in the previous year. According to it, the earnings situation in 2022 was similar to the previous year: around 30 percent of hospitals posted an annual loss at group level. The earnings situation in 2022 deteriorated compared to the previous year for all types of providers. This deterioration was particularly high for non-profit hospitals.
The elimination of aid payments such as corona aid, energy aid and the hardship fund was a key factor in the worsening economic situation of the hospitals, explained Boris Augurzky from RWI, one of the authors of the report. This aid previously stabilized the situation of the hospitals. If it is now eliminated, things will go downhill. Many hospitals are now feeling this.
Bed occupancy remains low
The occupancy rate of hospital beds remains low, although it has recently increased again. According to the report, bed occupancy was 77.2 percent in 2019 and 67.3 percent in 2020. By 2023, it has risen again to a forecast 70.6 percent.
But that’s still 11.4 percent less than in 2019, said Augurzky. However, the case mix index, which indicates the severity of the case, is only 5.4 percent lower than in 2019. So the simple cases no longer end up in the hospital, said Augurzky.
The authors of the Hospital Rating Report assume that the number of cases will increase again in 2024. In the medium term, however, it will continue to decline as a result of increasing outpatient care and despite the aging of society.
Non-profit organizations in particular are affected by bankruptcies
The report examined 47 hospital bankruptcies between June 2022 and March 2024 in more detail. Two thirds of these bankruptcies were at locations run by non-profit organizations. A quarter were at public-sector organizations and only a few were private. 63 percent of the locations for which insolvency proceedings were opened had an emergency level – most of them had emergency level 1, which describes basic emergency care.
Insolvency typically affects smaller companies, the report says. So far, seven of the 47 locations that are in insolvency proceedings have been closed. Augurzky expects around 60 bankruptcies in 2024.
Reform improves economic situation of the houses
The authors of the report assume that without the measures planned in the KHVVG, the proportion of hospitals with an increased risk of insolvency will rise from 14 percent in 2023 to 48 percent in 2030. The proportion of hospitals with annual losses would reach around 70 percent as early as 2024 and remain at around this level until the end of the decade.
If the KHVVG measures planned until the end of April 2024 are taken into account, the situation will be better in the medium term, the report says. Various types of allowances are planned, as well as extensive investment funds from the planned transformation fund. If this triggers structural optimization, the profitability of the hospitals would improve.
By 2030, only 24 percent of hospitals could be in the red rating area and 75 percent of hospitals could again post a positive annual result. This could be achieved through centralization by merging locations and by setting priorities by combining service groups.
Bridging aid prevents structural change
Hospitals are currently calling for bridging aid to offset inflation increases until the hospital reform takes effect. According to the report, a total of 14 billion euros would be needed for this by 2030, especially in the period from 2024 to 2026.
If I fill in all the gaps with transitional aid, there will be no structural changes, Augurzky pointed out. I know my fellow citizens in the district councils who then say: If there is financial help, I don’t need to make any changes. That’s just human nature: If there is no pressure, there will be no changes.
Investment funds increased slightly
The Hospital Rating Report also shows the investment funds that hospitals have received from the federal states. In 2022, they were eight percent higher than in the previous year at 3.6 billion euros.
We estimate the annual eligible investment requirement of the planned hospitals to maintain their assets at at least 5.9 billion euros, including university hospitals at a total of 6.7 billion euros, write the authors.
Hospitals are only partially able to close the gap between demand and the funding provided through their own efforts; this leads to a loss of assets. This was particularly pronounced in East German hospitals, which, having started from very good corporate assets, are now increasingly approaching the low level of West German hospitals.
Number of medical staff stagnates
The number of people employed in hospitals, converted into full-time employees, increased by eleven percent between 2015 and 2022. The proportion of part-time employees increased slightly. In the medical service, it increased from 22 percent to 32 percent between 2015 and 2022.
The annual increase in the number of full-time medical staff was 2.0 percent between 1999 and 2022, the report continues. In 2022, the increase was only 0.1 percent, meaning that for the first time since 2000 there was no growth. This low value is likely due to the sharp drop in the number of services provided since 2020. If the number of services provided remains at a low level, a reduction in the number of medical positions could even be expected in the following years.
Time-stable patterns
An analysis of available annual financial statements from 2007 to 2022 in the report shows time-stable patterns: The rating is significantly better in eastern Germany, and worst in Bavaria and Baden-Württemberg, it says. Non-profit and privately run clinics perform significantly better in terms of rating and earnings than public clinics.
One exception are public hospitals in poorer districts. They perform significantly better than those in richer districts. This could indicate that the lack of prospect of subsidies from poorer local authorities forces a more efficient approach.
Larger clinics, hospitals in hospital chains, hospitals with a medium and high degree of specialization, and facilities with a high case mix index also had a significantly better rating and better profitability.
In terms of digitalization, it is generally evident that hospitals that belong to a large chain are more advanced in terms of digitalization. They are most likely to benefit from the centralization and standardization of their IT strategy and infrastructure at the group level. © fos/aerzteblatt.de
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