Two-thirds of German hospitals operate at a loss: Survey

German hospitals are facing growing financial distress, according to an industry survey.

More than half of the 650 hospital executives surveyed saw the liquidity of their institutions "at risk" or even "highly at risk" in the second quarter of 2024, the survey by the management consultancy Roland Berger showed.

On average, 28% of the hospitals could face insolvency by the end of the year, according to the self-assessment.

Peter Magunia, a hospital expert and a partner at the consulting firm, stated that both small and numerous large hospitals - including maximum care and university facilities - are experiencing significant pressures.

"Public hospitals especially are under further pressure," he added.

Last year, 70% of German hospitals posted losses. "We believe that further closures will occur in the very near future, given the economic and liquidity situation," Magunia said.

The survey is in line with a pessimistic assessment by the German Hospital Association. Earlier this year, the association mentioned an unprecedented economic predicament.

According to the Hospital Association, 40 hospitals nationwide declared insolvency in 2023, and this year could set a new negative record.

The German government has promised to put hospital funding on a solid footing. The reform is to come into force at the beginning of 2025. However, this has not quelled uncertainty in the hospitals, Magunia said.

"At present, no hospital can calculate the effects of the hospital reform and essentially break it down for its own institution. There is no model, neither one that would be made available nor one that could be developed independently."

In the medium and long term, many hospitals will be forced to merge, according to the experts.

"Fifty per cent of all managing directors 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 a few hospital groups - "but they definitely need to get bigger."