The future of hospital financing in Germany

2009

Challenges and recommendations for healthcare players

Hospitals represent the biggest single item in Germany's health service budget. The Federal Statistical Office puts government spending on hospitals at EUR 64.6 bn in 2007. As providers of highly complex, capital-intensive services they also have to invest, just like any other business. Investment spending must be planned and financed for the short, medium and long term, against the backdrop of clear statutory requirements. With public coffers empty, all players must rethink their approach and find new paths.

The Department of Business Administration at Bayreuth University, headed by Prof. Schlüchtermann, and Roland Berger Strategy Consultants have therefore produced this study. It shows what these new methods could be and what action recommendations can be derived from them for hospitals and other players. The estimates and forecasts of industry experts – hospitals, banks and other financial services providers, hospital associations, planning authorities, medical devices providers and builders – were incorporated into the study via a comprehensive survey.

The study assumes that the financing of German hospitals will, in the future, be more varied than before. Although there are many sound arguments for putting more money into the system, it would mean higher taxes, insurance premiums or deductibles to cover the financing needs not currently covered by public subsidies.

In times of global economic crisis, we cannot focus solely on this type of call for help. Given the financial realities, all service providers in the German healthcare market must rethink their investment strategies and thus also consider innovative forms of financing. If they do not, individual players run the risk of a tangible loss of competitiveness and possibly jeopardizing their own fitness for the future.