So it’s no wonder that every tenth clinic is facing bankruptcy
Germany has a dual hospital financing system, the financial resources come from two sources. The federal states are responsible for construction, maintenance and investments. The running costs for personnel or material are borne by the health insurance companies. Both pillars of funding have been grotesquely neglected and undermined for years, so that a process of destruction in the hospital landscape is the inevitable result.
The federal states are dismantling the first pillar of financing. While the inflation trend from 2000 to 2020 would require an increase in investment of more than a third, investment financing by the public sector has halved in the last 20 years!
What can the hospitals do in this struggle for survival? You have to afford the lack of investments by yourself, you have to take out loans. As a result, the hospitals’ balance sheet burden from debt services has quadrupled over the past 20 years. This is the direct route to bankruptcy.
At the same time, around the turn of the millennium, a reform of the second pillar of financing took place, which at first received little attention. Until then, hospitals financed themselves through reimbursement: the hospital received a certain lump sum, the daily rate, for each day of hospital stay. The legislature gradually replaced this time-based system between 1999 and 2002 with the diagnosis-related flat-rate fees, the Diagnosis Related Groups (DRG). From then on, hospitals were paid based on the number and severity of cases treated. The result was a reduction in the length of stay and an increase in the number of cases in order to be able to bill a maximum of cases and a maximum of serious diagnoses in the same period. The number of patients rose by a fifth despite massive job cuts. At the same time, the work pressure increased.
The case mix index is derived from the DRG system. The Case Mix Index is the average of all DRGs that a hospital bills the health insurers. The higher the Case Mix Index, the higher the remuneration. If a department does not achieve the case mix index specified by management, it is threatened with closure. If an entire hospital fails to break even, it runs the risk of being closed or sold. This leads to enormous pressure from management on the medical and nursing professions. All employees are forced to think in terms of profit and loss categories and, in the process, inevitably lose sight of the actual medical and nursing tasks.
Only the hospital that can treat as many sick people as possible in the shortest possible time at the lowest possible cost makes a profit. Anyone who engages in time-consuming, empathic medicine makes losses. Business consultants are suddenly everywhere. They do not ask: what do the sick need? Or: How many doctors and nurses are needed for good medicine? You are interested in: What do patients bring in? And: how many places can you delete? The fatal thing about the payment system is the connection between the medical activity and diagnosis and the amount of the payment. Since the diagnosis alone generates the hospital’s income, it becomes the central target of the economists. Thousands of coding specialists and medical controllers: since the introduction of the DRGs, hospitals have been fighting with thousands of coding specialists and medical controllers for every euro.
The failure of dual hospital financing had two far-reaching consequences: closures and the increase in privatizations. What matters are the balance sheets, not medical necessities. Because the DRG system completely underestimates pediatric activities, many children’s clinics closed because of red numbers. Obstetrics took a similar development, which has never been adequately represented in the DRGs, so that one delivery room after another is closed to this day. More and more municipal clinics are falling victim to the red pen, because the deficits can no longer be compensated by the municipalities. A wave of privatization among publicly run hospitals hit the country. There were desperate sales, for example in Offenbach, where the clinic was “sold” to the Sana Group for one euro, but the debt remained with the city. Privatization has now reached such proportions that Germany is now the world leader in terms of the number of privatized hospital beds, ahead of the USA.
Hospital closings are nothing more than the destruction of common property. This happens completely haphazardly, not as required, but according to the balance sheet. Hospital privatizations are squandering and dividends are the theft of common property.
What should be done? Profits have to stay in the system and be reinvested. Hospitals have to be funded according to their mandate. They have to be part of the public service, their legal form has to be a charitable one. Concrete bedside medicine must be freed from economic dictates. Only when these requirements are met can hospital planning worthy of the name be tackled.
More on this at www.gemeingut.org
Dr. med. Bernd Hontschik is a surgeon and publicist. Currently in the book trade: “No place. Nowhere. ”Westend Verlag, 2020, 16 euros.
