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Bundestag passes hospital reform - future of hospitals remains uncertain

On October 17, 2024, the German Bundestag passed the biggest hospital reform of the last 20 years.

Over two years ago, Federal Health Minister Karl Lauterbach set out to overhaul the ailing German hospital system: Increasing efficiency and quality, maintaining nationwide care, reducing excess beds and bureaucracy. Everyone involved agreed something needs to happen ASAP and also what should happen. However, there was and still is no agreement on how those things should be accomplished, even though the law passed the Bundestag on October 17:

  • Financing through the flat rates per case will be supplemented by a 60% pre-reimbursement for the clinic’s operating costs.
  • All treatments will be assigned to 65 service groups. Only clinics that have successfully applied for certain service groups and can prove that they meet the equipment and personnel requirements, may perform treatments within these service groups. All other clinics are no longer permitted to offer treatment in those cases.
  • Cross-sector care facilities with inpatient and outpatient services are to ensure the care even in structurally weak areas.
  • A transformation fund of 50 billion euros is planned to provide financial support for the reform between 2026-2035.

But will these measures have the desired success and put hospitals on a sound financial footing? Nobody really seems to know yet. The federal states have been demanding an impact analysis for months to be able to assess the economic consequences for their hospitals. However, the "grouper" for the allocation of services to the new service groups is still not ready, nor is the analysis tool. Without knowing exactly what the new law will mean for them, the approval of the heads of the federal states in the Bundesrat is quite uncertain and the reform could still fail.

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