German hospitals face record insolvencies due to rising staff costs

Photo taken on Nov. 25, 2021 shows an entrance of the Charite University Hospital in Berlin, Germany. (Xinhua/Shan Yuqi)

Germany's hospitals face a dire situation, reaching a critical point with insolvencies expected to hit record levels in 2024, warns the German Hospital Federation.

BERLIN, Dec. 27 (Xinhua) -- The situation in Germany's hospitals is "worse than ever before," with insolvencies expected to reach record levels in 2024, the German Hospital Federation (DKG) warned on Wednesday.

Following almost 40 insolvencies this year, the number of hospitals filing for insolvency could double "due to the foreseeable strong development in staff costs," DKG Chairman Gerald Gass said.

Eighty percent of the country's hospitals expect a negative result in 2023, with almost as many fearing that the economic situation will deteriorate further next year, according to a survey conducted by the German Hospital Institute (DKI) and also published on Wednesday.

"Almost no hospital can cover its expenditure from current income anymore," Gass said. In addition to the fact that hospitals had been underfunded for decades in terms of investment funding, the main reason for this development was the continued lack of inflation compensation.

Hospitals in Germany are not allowed to freely adjust their prices while being exposed to the same inflationary pressure as the rest of the economy. "This imbalance is increasingly leading to insolvencies and closures," Gass warned. German hospitals would be 10 billion euros (11 billion U.S. dollars) short by the end of this year.

A health worker collects a swab from a man at a COVID-19 test station in Berlin, capital of Germany, on March 24, 2022. (Photo by Stefan Zeitz/Xinhua)

While there were still just under 1,900 hospitals in Germany in 2021, a majority of hospital managers believe that the number will dwindle to around 1,250 in 2033, according to a survey published by business consulting firm Roland Berger.

Key points of a hospital reform that is currently discussed in detail were already agreed in July. The reform is aimed at "de-economization, ensuring and increasing the quality of treatment and reducing bureaucracy in the system," according to the Ministry of Health (BMG).

As part of this, a hospital transparency law is being developed that will allow patients to see which hospital in their area offers which services and how this hospital performs in terms of quality, and medical and nursing staffing.

"This is about transparency for patients. And it is about financial support for clinics," a BMG spokesperson told Xinhua on Wednesday. The ministry continues to be confident that Germany's federal states will also approve it. (1 euro = 1.11 U.S. dollar)