Emergency Hospital - Clinic Survey: More than two-thirds write red numbers
The financial situation of Hospitals is worsening according to an industry survey. Over half of the 650 hospital management executives surveyed by consulting firm Roland Berger saw their own institution's liquidity as "threatened" or "seriously threatened" in the second quarter. On average, 28% of clinics could be at risk of insolvency by the end of the year.
70% in the Red
"It's not just small hospitals in rural areas that are struggling, it's also very, very, very many large hospitals, including maximum care providers and university clinics," said Peter Magunia, a hospital expert and partner at the Munich consulting firm Roland Berger. "Public hospitals are under even more pressure."
According to the survey, 70% of hospitals reported losses in the previous year. "We believe that there will be further closures in the short term if we look at the economic and liquidity situation," Magunia said.
City Hospitals in Distress
Contrary to popular belief, it's not just small hospitals in rural areas that are in trouble. "The challenge in the cities is even a bit greater," said Janes Grotelüschen, co-author and also a partner at Roland Berger. "When it comes to bed density, we are usually better equipped in the cities than in rural areas. Therefore, there are often greater utilization problems."
Another major problem is a lack of staff, as nursing staff and other hospital employees do not have high enough salaries: "In the cities, it's even more difficult for hospitals to find staff, because living costs do not match the wages," Grotelüschen said.
New Insolvency Record Possible
The survey aligns with the pessimistic assessment of the German Hospital Association, which spoke of an unprecedented economic crisis in the spring. According to the Hospital Association, 40 hospitals had filed for insolvency nationwide in 2023, and a new negative record could be possible this year.
The federal government has promised to stabilize hospital financing. The reform is expected to take effect at the beginning of 2025. However, there is uncertainty in the hospitals, as Magunia noted. "Currently, no hospital can calculate the effects of the hospital reform and thus adjust its own budget accordingly. There is no model, neither one that would be made available nor one that could be set up on one's own."
Rescue through Merger?
According to the two hospital experts, many hospitals will need to merge in the medium and long term. "Half of the business managers are thinking about mergers," Magunia said. "Many hospitals will not be able to survive alone, but only in a group." There are already some hospital alliances - "they must, however, become much larger".
- Despite being based in Munich, Roland Berger Consulting has highlighted the critical financial situation of hospitals across Bavaria and Germany as a whole, with 70% reporting losses last year.
- Roland Berger Partner Peter Magunia emphasized that not only small hospitals in rural areas are struggling, but also large hospitals, including university clinics, and public hospitals are under significant pressure.
- The financial woes of hospitals extend to urban areas as well, with partner Janes Grotelüschen noting that there are often greater utilization problems due to bed density and higher living costs making it difficult for hospitals to find staff.
- The German Hospital Association shared a pessimistic outlook, stating that 40 hospitals had filed for insolvency in 2023, and a new negative record could be possible this year.
- As a potential solution, Magunia suggested that many hospitals may need to merge in the medium and long term to survive, as half of the business managers are considering mergers, and hospitals will likely not be able to survive alone.
