Hospital reform 2024: What funds and financiers need to know now

The traffic light coalition is planning to reform hospital care. The federal and state governments agreed on key points on July 10, 2023. Of the 16 states, 14 voted in favor. Schleswig-Holstein abstained and Bavaria voted against. The starting point for the key points paper is the preliminary work from North Rhine-Westphalia. Federal Health Minister Karl Lauterbach is aiming to draw up a concrete draft law with the participation of the states over the summer. The reform is to come into force on January 1, 2024.

Hospital planning is a matter for the states

The competence for hospital planning lies with the states. The obligation of the states to provide a needs-based hospital structure and financing remains unaffected by the regulations. However, federal and state funds are to be used to supplement the financing of hospital structure funds.

The central goals of the hospital reform are

• Ensuring security of care (provision of general interest),
• safeguarding and improving the quality of treatment, and
• reducing bureaucracy.

Hospital closures shall be avoided and high-quality care is to be ensured throughout the country, even in rural regions.

This is also to be achieved by ending the system of flat rates per case. According to the key points plan, lump-sum payments per case are to be replaced by retention payments, which are also to be granted to hospitals with comparatively few treatments. The retention payment is temporarily independent of actual utilization and is intended to ensure nationwide coverage. However, it will only be granted to clinics that meet the quality criteria.

Quality criteria for financing

Financing is to be based on quality criteria, each of which is to apply to more precisely defined service groups. These service groups are to ensure uniform quality specifications with regard to equipment, personnel and treatment experience. The existence of the quality criteria of the service groups will be regularly checked by the medical service (MD) according to uniform national specifications. The development of a system of service groups, a more comprehensible reference to services and better service management are intended to counteract oversupply or undersupply and create transparency.

Categorization into care levels

Furthermore, hospitals are to be assigned to certain care levels. These levels are intended to indicate whether a hospital is primarily responsible for basic medical care or also provides complicated treatments. The hospital network is to be classified into levels. The catalog ranges from basic care close to the patient's home, to a second level with clinics offering additional services, to maximum care providers such as university clinics.

Criticism of the reform

However, the key points paper is met with criticism. The German Medical Association's main criticism of the paper is the wording for continuing medical education, for which there is still no coherent concept. All hospitals must be held accountable, especially the large hospitals and clinics that receive specialized care assignments. Contrary to what is envisaged in the key points, the clinics in the lowest care level (Level II clinics) can make a contribution, but cannot play the central role in the context of continuing medical education. Funding issues also remained largely unresolved.

Disappointment among hospitals

Gerald Gaß, Chairman of the Board of the German Hospital Federation (DKG), described the result as disappointing. The major hospital reform, which had been announced as a revolution, had turned into a "key point paper full of declarations of intent and test orders". He criticized the fact that the federal and state governments are accepting uncontrollable hospital closures instead of ensuring an orderly transition to the new hospital world. Until the financing reform takes effect in 2027, there would be gaps in care in Germany. In addition, it remains completely open which funds will be made available for the restructuring of hospitals. This lack of planning certainty affects people in rural areas in particular. In addition, there is a lack of central regulations to combat bureaucracy, which is made even more obvious by the lack of personnel. The occupational demographic development is also striking: In the hospital sector, every third nurse is over 50 years old. It is clear that younger personnel are needed and that savings should not be made in this area.

Conclusion and recommendation

It is true that the key points show good approaches in the medium and long term, which also support the hospitals. Nevertheless, many statements are too vague and do not provide hospitals with a reliable basis for planning.

After the summer break, the federal government intends to present its own law on transparency, which will be based on the key points paper. The reform is intended to give patients an overview of the quality of services.

Hospitals should already be preparing for a business challenge. Depending on their categorization, hospitals will face financing challenges. Consolidation considerations could also be a way forward.

If you have any questions about the potential consequences of hospital reform, please do not hesitate to contact the authors.