Hospital reform is coming – what patients now need to know

After almost two years of struggle, Health Minister Karl Lauterbach (SPD) has reached his goal: the Federal Council passed the law for a major hospital reform that was passed by the traffic light coalition. The minister speaks of nothing less than a “revolution”. The goals: less financial pressure for the clinics and more specialization in more complex procedures, which should provide patients with better care. However, implementation will only come gradually – and will probably have consequences for the clinic network.

According to experts, Germany has a relatively large number of clinics compared to neighboring countries – and there have been financial difficulties and staff shortages for years. But there is also a lack of efficiency, because according to the Ministry of Health, a third of the 480,000 beds are not occupied.

Lauterbach therefore sees the reform as a kind of emergency brake: without changes there is a risk of clinic insolvencies and poor treatment. It is clear that Germany does not have the medical needs or the staff for 1,700 hospitals. The aim is therefore to ensure that the houses that are really needed have an adequate economic basis.

The remuneration system introduced 20 years ago with flat rates per treatment case is to be fundamentally changed. According to Lauterbach, reaching as many cases as possible in the most cost-effective way possible has so far led to a “hamster wheel effect” – or even to incentives for medically unnecessary interventions. In the future, there should be a fixed base of 60 percent of the remuneration simply for the fact that clinics have a basic set of staff and equipment for certain services.

Countries like Schleswig-Holstein criticize that the future fixed remuneration is also dependent on the number of cases. There should be extra remuneration surcharges for clinics with pediatrics, obstetrics, intensive care and accident medicine, special stroke wards and emergency care.

The new fixed remuneration is to be given to a clinic for “performance groups” that the state assigns to it. They represent medical services in a more precise manner than roughly named specialist departments. The starting point should be 65 groups, which are largely based on a model from North Rhine-Westphalia – such as “spinal surgeries” or “leukemia”.

Uniform quality specifications for specialist personnel and equipment are also defined. Lauterbach repeatedly made it clear that he would not make any compromises. Because it is intended to ensure that cancer treatments, for example, are carried out in clinics with specialist knowledge.

The states responsible for hospital planning should control the change. You could say, for example, whether there are two or four locations for spine surgery in a region, explained Lauterbach. The new fixed remuneration is also intended to further secure the existence of smaller houses in the countryside. The federal states should also be able to declare locations as “cross-sector care facilities” that combine inpatient treatment with outpatient and nursing services “close to home”. Where there are no specialist and general practitioner practices, patients should be able to go to hospital for such treatments in the future. This also means that clinic locations are likely to be eliminated, especially in major western German cities. Not in the country.

The law also provides for financial injections. From this year onwards, cost increases at the clinics, among other things in the collective wages of all employees, will no longer only be half financed by the health insurance companies, but in full. In order to support the change to the new structures, there will also be a “transformation fund” from which up to 25 billion euros could flow from 2026 to 2035 – provided that countries contribute the same amount. The money should come from funds from the statutory health insurance companies and – depending on their share of the treatments – from private health insurance companies.

In the draft, the ministry points to “efficiency gains and reduced spending” through more coordinated, higher quality care. The annual expenditure of the statutory health insurance funds for clinics has recently increased to 94 billion euros. That was a third of all performance expenditure. The health insurance companies support greater specialization for more quality – but warn of a further “cost avalanche” in an already tense financial situation. The clinics and the states are also demanding faster financial injections, as some hospitals would otherwise no longer be able to achieve the reform, which will only take a few years to take effect.

The law is scheduled to come into force on January 1, 2025 – but it will not be implemented all at once, but rather gradually until 2029. The plan is for the states to assign the respective service groups to their clinics by the end of 2026. The financing will then be gradually converted to the new system in 2027 and 2028, as the ministry explains.

Note: This text was comprehensively updated following its adoption by the Federal Council.