The Hospital Study 2022 shows: Dealing with COVID-19, shortage of skilled workers and outpatientisation is becoming a question of existence for hospitals and thus entails significant changes and challenges.
The challenges facing hospitals and clinics
Hospitals and clinics are facing major challenges, whether they are in private hands or under non-profit or public ownership. More than half are already in the red, and the Covid-19 crisis has seen the financial situation of hospitals deteriorate further with the loss of revenue from postponed treatments and operations. The sharp rise in the cost of materials and staffing is piling added pressure on hospitals. And yet this is a time when spending is unavoidable: Essential investments in the future, including in digitalization and in modernizing structures and technologies, are vital for the very survival of many hospitals.
In the present environment, hospital managers need to prepare their institutions for both an impending liquidity squeeze and an accelerating wave of consolidation. As advisors to the healthcare sector, our overriding aim is to help our clients keep the focus on their patients, even in a highly volatile environment, and be able to put medical care and treatment quality first, despite the considerable cost pressure. Assisting our clients to meet their business and financial challenges and efficiently deliver upcoming projects is therefore top priority for us.
Our portfolio of services as healthcare consultants includes strategy development on both the medical and financial side of hospital operations, including growth, investment, and research strategies; earnings improvement programs and cost reductions, incl. purchasing optimization; turnarounds and restructuring opinions; liquidity optimization and securing financing; organizational development and medical priority setting; (digital) transformation including digital initiatives in the context of the Hospital Future Act (KHZG); and portfolio management and M&A transactions, incl. post-merger integration (PMI).
With our many years of expertise in the healthcare sector, we have conducted a large number of complex consulting projects for hospitals and in inpatient and outpatient care settings, including homecare. Our healthcare consulting services also benefit from our extensive insight gained from projects with companies in the healthcare, pharmaceutical, and MedTech sectors.
Supporting M&A activities for a university hospital
The strategic acquisition of other institutions in the context of mergers & acquisitions (M&A) offers every hospital the opportunity to leverage synergies and improve their own earnings and cost situation. With our full scope consulting services, we support our clients from the first step in a planned transaction to the full integration of the acquired target.
Case study: Our advisory services for a university hospital began with a commercial due diligence, which involved scrutinizing the acquisition target as well as its markets, customers, and suppliers plus the competitive environment in order to be able to make a fact-based M&A decision. Once the positive buy-side decision had been made, our team of functional and industry experts were on hand to guide the management through the entire transaction process. We also supported the hospital in the subsequent integration process, which included adapting systems, transferring personnel, and consolidating functions such as Finance, HR, and Controlling.
Strategy development and digitalization in a rehab unit
Digitalization or digital transformation offers every hospital and clinic outstanding opportunities to improve their internal processes and reduce costs in both the short and long term. Hospitals that move with the times and adapt their strategy to new market conditions and technologies can benefit from new revenue sources and achieve measurable P&L effects at the same time.
Case study: Our healthcare consulting services were called in to help a rehabilitation unit develop a new strategy that would be digital, sustainable, and future proof. In close cooperation with the client, we analyzed the entire range of services, processes, and systems, from medical care to treatment offerings and nursing provision to the unit's IT infrastructure. On top of the analysis findings, we added in our experience from a wide range of consulting projects and our expertise in the healthcare sector. On this basis, we then jointly defined a holistic corporate strategy including digitalization. As delivery-focused consultants, we also ran the project management office and ensured successful execution of the project, the impact of which will continue to benefit the unit long term.
Protecting liquidity in a hospital
At the present time, liquidity in many hospitals looks better than it actually is. With the special regulations that apply to the current shortened payment terms possibly about to expire, many hospitals are at risk of seeing their liquidity reserves melt away in a very short period of time. This financial hemorrhaging can be prevented with the necessary knowledge and the right expertise.
Case study: When a hospital saw its liquidity deteriorate drastically, the management approached our healthcare consultants to find solutions to the almost hopeless situation as fast as possible. First, our team of experts worked with the managing director to identify the causes of the liquidity squeeze. In close alignment with commercial management, we then took initial steps to optimize liquidity in order to secure the necessary financial leeway for further measures. Then we acted as a moderator between funding agencies, banks, and the hospital in order to coordinate and put in place measures that would ensure a healthy financing structure in the medium and long term. The emergency support provided by our consultants enabled the hospital to get back on a sustainable financial footing.
As one of the leading consultancies in the pharma & healthcare sector, our expertise covers additional topics. Read more in our publications and on the related pages:
- Hospital restructuring
- Outpatient service providers
- Rehabilitation units
- Nursing facilities