Emergency Hospital: Clinic survey: More than two thirds are in the red

According to an industry survey, the financial distress of hospitals is getting worse. More than half of the 650 hospital managers surveyed saw their own hospital’s liquidity as “endangered” or even “seriously endangered” in the second quarter, according to a survey by management consultancy Roland Berger. On average, according to this self-assessment, 28 percent of hospitals could face insolvency by the end of the year.

70 percent make a loss

“It’s not just the small hospitals, there are also very, very, very many large hospitals, including maximum care hospitals and university hospitals,” said hospital expert and partner of the Munich-based consulting firm, Peter Magunia. “Public hospitals in particular are under even greater pressure.”

Last year, 70 percent of hospitals were in the red. “We believe that there will be further closures in the very short term if we look at the economic and liquidity situation,” said Magunia.

Municipal clinics also in need

Contrary to popular belief, it is not only small hospitals in rural areas that are in trouble. “The challenge is sometimes a little greater in cities,” said Janes Grotelüschen, co-author and also a partner at Roland Berger. “In terms of bed density, we are usually better equipped in cities than in rural areas. That is why there are sometimes even greater capacity utilisation problems in cities.”

Another major problem is a lack of staff because nurses and other hospital employees do not have very high incomes: “In the cities, it is sometimes even more difficult for hospitals to find staff because the cost of living does not match the rates so well,” said Grotelüschen.

New bankruptcy record possible

The survey is essentially in line with the pessimistic assessment of the German Hospital Association, which spoke in the spring of an economic imbalance never seen before. According to the hospital association, 40 hospitals nationwide filed for bankruptcy in 2023, so a new negative record could be looming this year.

The federal government has promised to put hospital financing on a solid footing. The reform is due to come into force at the beginning of 2025. But at the moment there is uncertainty in hospitals, as Magunia said. “At the moment no hospital can calculate the effects of the hospital reform and, so to speak, break it down to its own hospital. There is no model, neither one that is made available nor one that you could set up yourself, so to speak.”

Rescue through merger?

In the medium and long term, according to the two clinical experts, many hospitals will have to rely on mergers. “50 percent of all managers are thinking about mergers,” said Magunia. “Many hospitals will not be able to survive on their own, but only as part of a group.” There are already some hospital groups – “but they definitely have to get bigger.”