Hospital study 2023: How Germany’s hospitals see their future

Hospital study 2023: How Germany’s hospitals see their future

September 28, 2023

Hospital executives face the need for crisis management and strategic repositioning

How do Germany's hospital managers see the future? Will the financial situation improve in the foreseeable future and what trends will shape developments in the upcoming years? As part of our annual hospital survey, we polled the opinions of the managing directors and medical directors of Germany's 600 largest hospitals. The results show that the crisis is far from over. But there are developments that offer hope – and many managers who are now making their hospitals fit for the future.

Germany's hospitals remain in poor financial condition. Structural change in the hospital landscape is in full swing.
Germany's hospitals remain in poor financial condition. Structural change in the hospital landscape is in full swing.
"Many managers understand that what they need to do now is get their hospital in shape to compete in the market and position it for the future."
Portrait of Peter Magunia
Senior Partner
Stuttgart Office, Central Europe

Financial situation: Majority of hospitals were loss-making in 2022

The latest figures show that the financial condition of most hospitals has deteriorated in recent months. While about one-third of hospitals generated profits in 2021, more than half (51%) of hospitals were in deficit by 2022, including a large number of public hospitals. Only just under a quarter of the facilities will finish 2022 in the black.

Survey respondents do not expect any fundamental improvement in their financial situation in the upcoming years. Expectations for the planned hospital reform were also not particularly high at the time of our survey in May. The hospital executives we surveyed do not expect to see any relief until 2028. Efficiency gains from increased digitalization also play an important role.

The pressure to act is intense, as evidenced by managers' estimates of the future number of hospitals in Germany: While there were still almost 1,900 hospitals in 2021, 51% of respondents anticipate that there will be no more than 1,250 hospitals in 2033. A further 38% of respondents expect the number of hospitals to fall to a maximum of 1,500 hospitals, and 11% believe there will be up to 1,750 hospitals in ten years' time. The largest decline is expected to come between 2028 and 2033. This is primarily due to the shift from inpatient to outpatient care.

The key trends: Mergers, the shift to more outpatient care, and artificial intelligence

Structural change in the German hospital landscape is in full swing. This now seems to be the consensus among Germany's hospital managers. The results of this year's Hospital study show that a large proportion of executives have decided to actively shape this development – with different objectives depending on their starting point.

One strategic option that has been discussed for many years has taken on new relevance: cooperation with other hospitals. But now that the potential of mere collaboration seems to have been exhausted, this development is going a step further. Survey respondents expect to see more hospital mergers and acquisitions. In fact, M&A is cited as one of the most important strategic options in the latest hospital survey, along with collaboration and specialization.

As more and more services will have to be provided on an outpatient basis in the future, there will be major changes over the next ten years. Smaller, less specialized healthcare providers are at risk of financial collapse. But even maximum care providers face the challenge of diversifying their portfolios to compensate for declining inpatient revenues. Expanding the outpatient infrastructure and implementing innovative care concepts are important starting points for positioning a hospital for an outpatient-based future.

Artificial intelligence is making its way into hospitals' everyday activities

Telemedicine and the use of robotic systems in surgical practice are no longer the stuff of the future. However, there is one area where the views of the survey participants have changed significantly since the last survey: Artificial intelligence (AI) has become highly relevant in the last year. When asked which technologies will change the hospital landscape the most in the coming years, hospital executives now rank AI second. Image recognition and decision support are the areas where respondents expect AI to have the greatest impact. In administration, AI is also expected play an important role in process optimization and efficiency gains, for example in invoice verification or human resources.

Time for hospitals to define their position

Germany's hospitals are facing a Herculean task. While they must do everything in their power in the short term to stay on course financially and not lose sight of important trends such as the shift towards more outpatient care, long-term goals such as the comprehensive digitalization of all hospital processes are no less pressing.

To make matters worse, some trends are difficult to reconcile, such as the demand for a better work-life balance among staff and the need for improved financial performance. Managers must decide which goal should take priority for their hospital when weighing the various strategic options.

However, we firmly believe that the critical success factor in the coming years will be the strategic positioning of each hospital within the emerging ecosystem of connected healthcare providers. Germany's hospital landscape will continue to consolidate. Hospitals that want to shape the future must know what role they want to play in it.

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